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Product Life Cycle

PRODUCT
LIFE
CYCLE

INTRODUCTION:

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Product Life Cycle

The product life cycle describes the sale pattern of a product over
time. After launching the product the management wants the product
to enjoy a long and happy life. Although it does not expect the product
to sell forever, the company wants a decent profit to cover all the effort
and risk that went into launching it. Management is aware that each
product will have a life cycle, although the exact shape and length is
not known in advance.Generally the time span begins with products
introduction in the market and ends with its obsolescence and
replacement. While the form of the life cycle is fairly standard and is
subject to variations.

The product life cycle is based upon the biological life cycle. For
example, a seed is planted (introduction); it begins to sprout (growth);
it shoots out leaves and puts down roots as it becomes an adult
(maturity); after a long period as an adult the plant begins to shrink and
die out (decline).some products may have a short life cycle, whereas
others may enjoy a longer life. Product life cycle refers to the
progression or products sales and profits over its lifetime.

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Product Life Cycle

It’s said that a product has a life cycle is to assert
four things:

1. Products have limited life.

2. Product sales pass through distinct stages, each posing
different challenge opportunities, and problems to seller.

3. Profits rise and fall at different stages of product life cycle.

4. Product requires different marketing, financial, manufacturing,
purchasing, and human resource strategies in each life cycle
stage.

The concept underlying the premises of product
life cycle is that all products pass through the
stages outlined below:

1. Introduction stage.

2. Growth stage.

3. Maturity stage.

4. Decline stage.

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Product Life Cycle

STAGES
OF
PRODUCT
LIFE CYCLE
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Product Life Cycle GRAPHICAL REPRESENTATION OF STAGES OF PRODUCT LIFE CYCLE. Page 5 .

Because it takes time to roll out a Page 6 . The INTRODUCTION stage starts when the new product is first launched. Introduction takes time and the sales growth tends to be slow at this stage. Product Life Cycle BASIC STAGES IN PRODUCT LIFE CYCLE The first and foremost stage of products life cycle is the INTRODUCTION stage.

The life cycle goes on further to assume that each product eventually is replaced by another or that initial rapid growth will end in decline.if the product introduction proved to be successful. Competition is intense because the product must compete for share of an existing market Thai is not experiencing growth. and sales will generally fall short of their potential. INTRODUCTION STAGE Introductory stage is (also called as market pioneering stage)is the first stage in the life cycle of the product. new products are not entering the market and demand levels are falling. Once the market enters the DECLINE stage. the objective is to increase market share to maintain stable sales levels. At this. According to the concept of life cycle. rapid GROWTH stages are reached and sales increase markedly. the market enters the maturation stage. the market for any product is limited. When this point is reached. If a product enters a market that has already moved into MATURE stage. Product Life Cycle new product and fill dealer pipelines . Page 7 .

• Pricing may be low penetration pricing to build market share rapidly. • Distribution is selective until consumers show acceptance of the product. the product is just introduced to the market . There may not be ready market for product. The expenditure on advertising will also be heavy.Sales are low. The profit during this stage may be less due to low sales that also supplemented by heavy production & distribution cost. Marketing communications seeks to build product awareness and to educate potential consumers about the product. Sales revenue begins to grow along with demand but the rate of growth is rather slow. profit seems remote possibility. Sales are low. The impact on the marketing mix is as follows: • Product branding and quality level is established and intellectual property protection such as patents and trademarks are obtained. The profit during Page 8 . & the customers have to be prompted to try out the product. or high skim pricing to recover development costs. demands have to be created & developed. In this stage. the firm seeks to build product awareness and develop a market for the product. • Promotion is aimed at innovators and early adopters. Product Life Cycle During the introduction stage. Consumer will purchase on trail basis. There may not be ready market for the product . demands have to be created & developed. Sales revenue begins to grow along with demand but rate of growth is rather slow. &the customer have to be promoted to try out the product. the product undergoes teething troubles. profit seems a remote possibility. the product undergoes teething troubles.

Introduction stage is characterized by: *Low sales. *Low or no competition if the product is innovative. *High promotional expenditure.Consumer will purchase the product on trail basis. *Loss or negligible profits. *Higher dealer’s incentives. the demand has to be created & developed so the firm has to invest heavily in the promotion & wait for the reward. Product Life Cycle this stage may be less due to low sales that also supplemented by heavy production & distribution costs. The stage poses several problems for the marketer. its technological newness & the consumer’s view of the product. if there is strong competition. its price. The complexity of the problems & the duration of the stage depend upon the nature of the product. GROWTH STAGE: Page 9 . In this stage . The expenditure on advertising will also be heavy . *Survival problems.

the sales and profits of the company keep on increasing. Then when during this stages. The new customers join the existing users of the product. marketing and distribution efficiency becomes decisive factors at this stage. As a result. Similarly. the product is accepted by the consumer and traders. For this. sales promotion measures at consumer level and dealer level should be given consideration. Product Life Cycle Growth stage is the second stage in the life cycle of the product. Competition-oriented pricing is useful during this stage. The introductory may have to alter his product at this stage.The dealers should be encouraged to repeat orders. The profit from the sales also increases. The market demand for the product increase and the size of the market grows and the sales increase with speed. He has to stay ahead of his competitors and persuade the customer to prefer his brand. Page 10 . During the growth stage. during the growth stage. the introductory is setting down with is product. the volume of sale increases with speed. Advertisement should also be made extensively so as to have new customer for the product . In this way. The firm gives special attention to raise the volume of sales. competitors enter into scene with similar or slightly improved version of the product.

* Rise in profits. There is improvement of product quality. Promotion: Increased advertising to build brand preference. Distribution: Distribution becomes more intensive. Product Life Cycle The impact on the marketing mix in growth stage is as follows: Product: New product features and packaging options are introduced and the product is diversified. Trade discounts are minimal if resellers show a strong interest in the product. Price: The price usually remains high due to entry of competitors. Growth stage is characterized by: * Rapid growth in sales. Page 11 .

Demand tends to reach a saturation point. differentiation and development. sales turnover reaches to the highest level. Product Life Cycle * Repeat purchases and brand loyalty. and therefore most of the marketing management deals with the mature products. Additional expenditure is also incurred for product modification. improvement. Along with this. * Introduction of more product models. This maturity stage normally lasts longer than the previous stages and it poses strong challenges to the marketing management. * Increasing competition. Thus special attention needs to be given for raising marketing Page 12 . The marketing expenditure goes on increasing and this brings the margin of profit down. Price competition becomes intense. * Intensive promotional effort. Even broadening of the product line will be necessary in order to face pressure of competition. MATURITY STAGE Maturity stage is the fourth stage in life cycle of the product In maturity stage. special sales promotion measures are necessary in order to stimulate demand and face market competition. Most products are in the maturity stage of the life cycle.

relatively low price.In short. most successful ones are actually evolving to meet consumer needs. product. Efforts are required to be made to maintain the position in the market by facing the competitiors effectively. Maturity stage is characterized by: *Stagnation of sales. Page 13 . keener competition and lesser profits are faced in this stage. *Intense competition. Although many products in the mature stage appear to remain unchanged for long periods. and marketing mix. *Retentive or reminder advertising. This situation continues for some period and this leads to saturation position. Orders are only of replacement orders. increased marketing costs. which is a saturation point. Product managers should do more than simply ride along with or defend their mature product a good offense is the best defense. It’s a stage when sales turnover reaches to a specific level. *Decline in profits. They should consider modifying the market. Product Life Cycle effectiveness. Consumption achieves a constant rate. It is not possible to raise the volume of sales to higher level.

or style to attract new users and to inspire more usage. the company can offer new or improved services to buyers. Finally. features. premiums. and contests. It can launch a better advertising campaign or use aggressive sales promotions trade deals. safety. Page 14 . It can cut prices to attract new users and competitor’s customers. speed. Finally the company can improve the product’s styling and attractiveness. cents-off. reliability. It might add new features that expand the product’s usefulness. Product Life Cycle The company can try modifying the marketing mix improving sales by changing one or more elements. It might improve the product’s quality and performance its durability. The company can also move into larger market channels. using mass merchandisers. or convenience. The company might also try modifying the product changing characteristics such as quality. or taste.

shampoo sachets introduced to make shampoo accessible to lower income groups). The packaging may also change to exploit new segments sometimes (e. Product Life Cycle The company might try to expand the market for its mature brand by working with the two factors that make up sales volume: Volume= number of brand users * usage rate per user It can try to expand the number of brand users: By converting non users By entering into new segments. Page 15 . By winning competitors customers. The impact on the marketing mix in maturity stage is as follows: Product: Products are modified again. this time in reaction to competitor products.g.

prices come down and discounts are more frequent. Promotion: Emphasis on differentiation and building of brand loyalty. Sometimes a product may not reduce prices but increase them to distinguish themselves as a superior product. Distribution: New distribution channels are explored and incentives are provided to resellers in order to avoid losing shelf space to competitors. Product Life Cycle Price: Since sales volumes are high. DECLINE STAGE Page 16 . The promotion budget may be a little lesser than previous stages. Pricing wars break out among competitors as they vie for the ever shrinking new-customer base in a saturating market.

and profit trends. A product’s failing reputation can cause customer concerns about the company and its other products. Page 17 . market shares. For these reasons. shifts in consumer tastes. Then management must decide whether to maintain. Sales decline for many reasons. Management may decide to maintain the brand without change in the hope the competitors will leave the industry. There are many hidden costs. Sales drops severely in due course and the product fail to get support from the market. and increased in competition. It often requires frequent price and inventory adjustments. and not just in profit terms. Keeping weak products delays the search for replacements. A weak product may take up too much of management’s time. hurts current profits. Carrying a weak product can be very costly to a firm. Product Life Cycle Decline stage is the fourth and last stage of product life cycle. costs. The sales of most product forms and brands eventually decline. harvest or drop each of these declining products. The biggest cost may well lie in the future. company need to pay more attention to their highest aging products. entry of new products or due to reduction of the support of customer. and weakens the company’s foothold on the future. It requires advertising and sales force attention that might be better used to make “healthy” products more profitable. including technological advance. The firm’s first task is to identify those products in the decline stage by regularly reviewing the sales. creates a lopsided product mix.

For that the firm has to reduce the price to maintain the support of the customers. • Decreasing the firm’s investment level selectively. In a study of company strategies in declining industries. • Maintaining the firm’s investment level until the uncertainties about the industries are revolved. Page 18 . Expenditure on advertising and sales promotion will have to be bought down as such expenditure is not adequately rewarded. • Divesting the business quickly by disposing of its assets as advantageously as possible. • Harvesting (“milking”) the firm’s investment to recover cash quickly. Kathryn Harrigan identified five decline strategies available to the firm: • Increasing the firm’s investment (to dominate the market or strengthen its competitive position). by dropping unprofitable customer groups. while simultaneously strengthening the firm’s investment to recover cash quickly. Product Life Cycle Management may decide to reposition or reformulate the brand in hopes of moving it back into the growth stage of the product life cycle.

• Prices may be maintained for continued products serving a niche market.Expenditures are lower and aimed at reinforcing the brand image for continued products. • Distribution .Distribution becomes more selective. • Promotion . • Price .The number of products in the product line may be reduced. Rejuvenate surviving products to make them look new again. Page 19 .Prices may be lowered to liquidate inventory of discontinued products. the marketing mix may be modified as follows: • Product . Product Life Cycle In short. Channels that no longer are profitable are phased out.

• Withdrawal or modification in products. Page 20 . • Decline in profits at a rapid pace. Product Life Cycle Decline stage is characterized by: • Entry of substitute. • Decline in sales. • Repositioning of product. • Minimum promotional effort.

Product Life Cycle MARKETING STRATEGIE S Page 21 .

Product Life Cycle INTRODUCTION STAGE The following are the various strategies at the introduction stage:- 1. in order to correct the defects. Page 22 . the firm will concentrate on the single product which is introduced. if need to be more so in the case of consumer durable such as automobiles. 2. the firm may not come up with various models to cater the different market segments. Again. noticed after launching the product. a) Rapid skimming: The product can be launched at high price and with high promotional expenditure. The firm may not go for product line extension. a firm may follow one of the following four strategies. Price and promotion strategies: In relation to price and promotion. Product strategies: Normally. if any. The firm may spend addittional funds on research and development to further improve the product.

• When a large part of the market is unaware of the product and therefore. Product Life Cycle This strategies is suitable: • When the market is large in size. This strategy brings certain benefits: • The firm may generate profit at the introduction stage. • When the buyers are willing to pay a higher price. • Where there is a need to build brand image or preferences as competition are likely in near future. Page 23 . high promotion. • This strategy will enable the firm to build a good brand image which will enable to face competition effectively as and when the competitors enter the market. is required. which will enable the firm to cover up either partly or wholly the development expenses.

Product Life Cycle b) Slow skimming: The product can be launched at high price and with low promotional expenditure. This strategy is suitable: • When the market size is limited • When the potential buyers are aware of the products features. uses. low promotion. and therefore. • It requires less promotional expenditure and as such low marketing overheads. This strategy brings certain benefits: • The firm may generate profits at the introductory stage. etc. • Where buyers are willing to pay a high price. c) Rapid penetration: Page 24 .

This strategy is suitable: • When the market is large in size • When a large part of the market is unaware of the product. so high promotional expenditure to build brand image or preference • Where the company is in a position to achieve economic of large scale production and distribution. • It may build good brand image. • Where there is possibility of strong competition in near future. • Where the buyers are price sensitive. Page 25 . which will enable to face competition effectively as and when the competitors enter the market. This strategy brings certain benefits: • The firm can capture a large market share. Product Life Cycle The firm can launch the product at low price and with high promotional expenditure. and therefore high promotion.

etc and so low promotion. so low pricing. Page 26 . • When the large part of the market is aware of the product’s feature. • When there is possibility of limited competition in future may be due to high development expenditure for new entrants. This strategy brings certain benefits: • It will enable the firm to capture a large share of the market • It requires less promotional expenditure and as such low marketing overheads. This strategy is suitable: • When the market is large in size. • Where the buyers are sensitive. • Where the company is in a position to achieve economies of large scale production and distribution. uses. Product Life Cycle d) Slow penetration: The product can be launched at a low price and with low promotional expenditure.

Distribution efforts are directed to satisfy market segments. even at the national level. Distribution strategies: a) Concentrated distribution strategy: The firm may follow concentrated distribution strategy. Product Life Cycle 3. i. distribution strategy at the introduction stage. Page 27 . b) Mass distribution strategy: The firm may also follow mass distribution strategy i. However it makes sense to go for concentrated.e distribution of the product through specific dealers in a particular market area.e distribution of the product through all the possible dealers over a large market area.

1. quality. and price and promotion may remain the same or may change depending upon demand. profits increase. b) Introduction of new models: The firm may introduce different models of the product. During this stage. targeting to different market segments. Product improvement can be in terms of its features. design. Product strategies: a) Product improvement: The firm may undertake product improvement so as to face the competition effectively. packing. Page 28 . Each model may have different brand name or there may be brand extension with certain addition to the brand name. competition and other market forces. such as model number. sales grow. shape. the firm may follow several strategies to sustain rapid growth as long as possible. etc. Product Life Cycle GROWTH STAGE The growth stage is characterized by the entry of competitors.

The low pricing strategy is followed so as to face the competition effectively. b) Push and pull promotion strategies: The firm. Page 29 . New entrants may find it difficult to compete with low prices. A push promotion strategy requires trade promotion activities (incentives) so as to induce dealers to stock and push the product in the market. such as various sales promotion schemes and advertising so that the consumers demand the product from the dealers. Product Life Cycle 2. A pull promotion strategy requires promotional efforts directed at customers. may adopt push and pull promotion strategy. Price and promotion strategy: a) Penetration pricing: The firm may reduce the price due to economic of large scale production and distribution.

c) New distribution channels: The firm may also introduce new distribution channels to increase its sales. if the is directed mainly as young generation. the firm may also direct it to order generation. b) Increase in distribution converge: The firm may increase distribution coverage from local to regional and from regional to national level. The firm may go for setting up chain stores or enter into franchise agreements to increase the sales. The increase in distribution coverage will enable the firm to have rapid growth in its sales. For instance. Page 30 . Product Life Cycle 3. Distribution strategies: a) New market segments: The firm may look for new segments to increase the sales. as in the case of pepsi and cadbury’s dairy milk.

the sales remain more or less the same. The following are the marketing strategies at maturity stage. longer durability. 1. Product Life Cycle MATURITY STAGE: A majority of the products are in the maturity stage. etc and to generate enhanced customer satisfaction. Price and promotion strategies: Page 31 . At this stage. etc. design. the company has to place a lot of focus on Research & Development for the purpose of product improvement. and marketers have to come up with various strategies to stay in the market. The product modifications are intended to increase product’s performance such as greater speed. Product modification: The marketers may place lot of emphases on product improvement in respect of quality. This stage normally lasts longer as compared to the previous two stages. Therefore. features. 2.

A pull promotion strategy requires promotional efforts directed at customers. New entrants may find it difficult to compete with low prices. and advertising so that the customers demand the product from the dealers. Product Life Cycle The firm may follow the same (price and promotion) strategies as followed during the growth stage.  The firm has to come up with innovative promotion schemes such as: Page 32 .e a) Penetration pricing: The firm may reduce the price due to economies of large-scale production and distribution. such as various sales promotion schemes. b) Push and pull promotion strategies: The firm may adopt push and pull promotion strategy. A push promotion strategy requires trade promotion activities (incentives) so as to induce dealers to stock and push the product in the market. i. The low pricing strategy is followed as to face the competition effectively.

 Extending warranty for longer period. 3. and may exit from unprofitable segments. Page 33 . contest. washing machines etc. This enables the firm to reduce its overheads and increase the profits. exchanging old products with a new one as in the case of TVs. Distribution strategies: a) Focus on profitable segments: The marketers may concentrate on profitable market segment. Product Life Cycle  Exchange offers.  Providing quick and efficient after-sale-services.  Sales on installment facility at low or no interest charges.  Maintaining and enhancing customer and dealer relationship through gift. etc.

and also profits decline considerably. DECLINE STAGE The decline stage is characterized by decline in sales at low level.This would enable the firm to maintain and enhance good relation with important channels of distribution. Product Life Cycle b) Focus on improvement channels of distributions: The firm may have to concentrate on important channels of distributions and discard expensive or unprofitable channels of distribution. c) Exit from un-profitable market areas: The firm may also exit from unprofitable market areas and concentrate on those market areas. which generate good sales and profits. The firm may follow the following strategies at the decline stage: Page 34 . This would enable the firm to maintain and enhance good relation with important channels of distribution.

which has a good potential in the market. Product Life Cycle 1. which generate sales and profits. c) Wait and watch strategy: At times the firm may adopt a wait and watch policy. but wait for other firms who are facing the same problem of lower sales to withdraw the then getting the bigger share of the market. as lowering the price may not be feasible. 2. The firm may not withdraw the weaker brand. Page 35 . Price and promotion strategies : The firm has to maintain the same price. Product strategies : a) Withdrawal of weaker brands: The firm may withdraw weaker brands and concentrates on selectively brands. and market it profitably. The promotional expenditure may reduced depending upon the availability of funds and market situation. b) Introduction of new product: The firm may also introduce a new product.

 Distributions through selective channels. Distribution strategies: The firm may follow the distribution strategies:  Continued focus on profitable segments. Product Life Cycle 3.  Emphasis on selective segments. Page 36 .

especially hi-tech products. Product Life Cycle PRODUCT LIFE CYCLE AS AN EFFECTIVE TOOL IN MANAGING CUSTOMERS. Page 37 . evolve from stage of inexperienced generalist to experienced specialist. Companies who can sense and anticipate this customer experience factor can be ready with suitable strategies to keep the customers with them. Buyers of various products. knowledge of this change would help effective management of customers. The changing expectations and the demands of the customers can be handled through different strategy routes- strengthening the company. Though this change is represented by shifts in the nature of the demand in the PLC stages it is essential for the marketing man to know what actually happens to the consumers has some implication for the” company- consumer relationship” and consequently. as his product moves along its life cycle. the customers of the product is also moving in a certain path in relation to his experience of the product. Customer’s experience with the company changes as the product passes through its product life cycle. augmenting the product. As the experience level of customer’s changes.customer relationship. The seller of the product has to understand when and how a transition is taking place in the experience level of the customer. the benefits they seek from the company also keep changing. improving service support or modifying the pricing approaches. When a product is moving through the various phases of its life cycle. as such PLC can be effective tool managing customers.

stocks and noodles. Maggi noodles are part of the Maggi family. to cater for the health conscious like 'No MSG'. Brazil. In Malaysia. in several countries it is also known as "maggi mee" (mee is Indonesian/Malaysian for noodles). Maggi noodles recently introduced a new variety of its noodles. Sri Lanka . Pakistan and the Philippines. This move helps the brand in India as suburban mothers. a Nestlé brand of instant soups. 'Less Salt' and 'No Tran’s fat'. New Zealand. Nepal. The brand is popular in India. who feed the noodles to children as an afterschool snack. South Africa. Product Life Cycle PRODUCT LIFE CYCLE OF MAGGI NOODLES: INTRODUCTION: Maggi noodles is a brand of instant noodles manufactured by Nestlé. are Page 38 . there are fried noodles made from maggi noodles known as Maggi goreng. Singapore. Wholewheat flour based noodle variation marketed by the name "Vegetable Atta Noodles" has been introduced in India (Atta flour is used in preparing most forms of wheat based breads in India) and caters to health conscious buyers wary of the refined flour used in the regular Maggi noodles. Australia. Malaysia. Bangladesh.

seaweed or lemon can also be added to the noodles for a better flavour. Preparation Maggi noodles take around 2 minutes to cook. In fact. "Maggi" has become a genericized name for instant noodles in India and Malaysia. A new feature is an extra sachet containing dehydrated vegetables. Page 39 . Consumers have not reacted well to the new formulations. the salt content has been increased by 31 percent. carrots. In mid 2008. However. New Zealand supermarkets introduced replacement formulations for its Beef. Product Life Cycle the primary customers of the brand. Oriental and Curry flavours. hence the name "2 minute noodles". Maggi claims the new range contains 88% less total fat and 86% less saturated fat than the average of top-three (unnamed) 2-minute-noodle competitors. Egg. The new Maggi range also has considerably lower fat than its own previous formulation. The Maggi noodle cake and seasoning is added into boiling water for two minutes and it is ready for consumption. complaining that they want the original chicken flavour back. Recently a line of Rice noodles and Whole wheat with pulses. beans and onions has also been introduced in India.

They are: • Original Flavour • Chicken • Curry (a healthier alternative is also sold in supermarkets) • Kari Letup (Extremely Spicy Curry) in Malaysia • Laksa Lemak (discontinued) • Tom yam • Chicken & Corn • Beef • Oriental • Masala • Prawn • Dal Sambar (whole wheat noodles) • Asam Laksa • Cheese • Pizza (only in Saudi Arabia. Page 40 . Product Life Cycle Flavours and Variety Maggi Noodles are available in a large assortment of different flavours. was available for a period of time in Australia) • Sup Tulang (bone soup) (in Malaysia) • Chatpata • Tomato • Stronger Chicken • Vegetable Atta Noodles (whole wheat noodles) mostly in India • Shahi Pulao (rice noodles) • Chilly Chow (rice noodles).

Nestlé SA. NIL successfully managed to retain its leadership in the instant noodles category. an instant noodles product. • Stage at which maggi is in the product life cycle. with its launch of Maggi 2 Minute Noodles. Introductory Stage • High failure rates • No competition • Frequent product modification • Limited distribution • High marketing and production costs • Promotion focuses on awareness and information Nestlé India Ltd. Because of its first-mover advantage. NIL created an entirely new food category . Page 41 . introduced the Maggi brand in India in 1982.instant noodles . • Why Atta noodle was a failure? • Strategies taken to establish new product category • What measures NIL should take to sustain the image of a popular brand image.in the Indian packaged food market. the Indian subsidiary of the global FMCG major. Product Life Cycle ISSUES • Different phase’s product life cycle of maggi. (NIL).With the launch of Maggi noodles.

• Availability in different packages: – 50 Gms.focusing on kids. Atta Noodles. – DalAtta Noodles. Product Life Cycle Market Penetration • Promotional campaigns in school. • New product innovation according to the need of consumers: – Veg. – 100 Gms. – Cuppa Mania. Growth Stage • Increasing rate of sales • Entrance of competitors • Initial healthy profits • Promotion emphasizes brand ads • Prices normally fall • Development costs are recovered Page 42 . • Advertising strategies: .

as consumers did not like the taste of the new noodles. • Like Maggi. was priced aggressively at Rs 5 and had four variants: two chicken options and two vegetarian. NIL reintroduced the old formulation of the noodles. due to growing popularity of Top Ramen. Knorr Annapurna. the sales of Maggi noodles declined. Page 43 . • In March 1999. Product Life Cycle • 10 yrs back it enjoyed around 50% market share in this segment which was valued at around 250 crores. another instant noodles product. Over the years. • However. particularly office-goers. NIL also introduced several other products like soups and cooking aids under the Maggi . NIL changed the formulation of Maggi noodles in 1997. • During the 1990s. called Knorr Annapurna Soupy Snax. after which the sales revived. this proved to be a mistake. • In order to improve sales. Maturity Stage: Many consumer products are in Maturity Stage • Declining sales growth • Saturated markets • Extending product line • Stylistic product changes • Heavy promotions to dealers and consumers • Prices and profits fall • In 2003 Hindustan Lever Ltd was all set to take on Nestle's bestselling Maggi 2-minute noodles by launching a new category of liquid snacks under its food brand. Soupy Snax will be an in-between-meals snack and will be targeted at all age groups. • The new product.

Atta Noodles – Health Conscious. Analysis (why Atta Noodles Failed?) • In 2005 Nestlé India launched MAGGI Vegetable Atta Noodles. Extending the PLC • Change product • Change product use • Change product image • Change product positioning. • Rice Mania – Teenage • Cuppa Mania – Office goers. • Veg. Decline Stage if no product innovation brought: Rate of decline depends on change in tastes or adoption of substitute products • Long-run drop in sales • Large inventories of unsold items • Elimination of all nonessential marketing expenses. Product Life Cycle STPD Analysis Segmentation to Differentiation: • Classic Noodles – (5 – 10 yrs). Page 44 .

The price of atta noodle was little more than maggi 2 minutes noodle 3. C. FAILURE CAUSES 1.Maggi Noodles also contains the additives E150d and E627. Targeted health conscious people. Lack of essential nutrients. Indian psyche. Indian Palate is not too adventurous in terms of trying new tastes. The British Advertising Standards Authority said that it was a false claim.E627 is partly prepared from fish. • Maggi Vegetable Atta Noodles will provide the dietary fiber of whole wheat to facilitate good. Not purely vegetarian. Suggestive Promotional Strategies Page 45 . 2. So a new product with a new taste that too from a different culture will have difficulty in appealing to Indian market. Price. lacked essential vitamins A. Nestle mistakenly aired an advert that noodle "help to build strong muscles and bone". 5. • Extensive Research and Development expertise to develop Maggie Vegetable Atta Noodles.The basic problem the brand faced is the Indian Psyche. 4.In October 2008. Product Life Cycle • Based on consumer needs and evolving trends for more whole grain based products.also the fat content was more then carbohydrates 6.The new maggi atta noodles as can be seen from the fig. False claims.and is thus not suitable for vegetarians.

49. based on twin benefits of “INSTANT” and “HEALTHY”. They should conduct test marketing before launching new product. Current Sales: Approx. Product Life Cycle 1. in India Reasonable competitive pricing. 3. Strengthen the distribution channel of the rural areas within 100 KM of all the metros. 4.000. Page 46 . Conduct promotional campaigns at schools in small towns with population more than 10. 2. 00. Focus on creating distinctive image.000 in Mumbai – 10.000 boxes – 55 cr. Current Scenario of Maggi Leading Brand in India as well as World. 79. – 90000 boxes – Rs. 4.

EARN MORE PROFITS & FACE THE COMPETITION. WHICH WILL HELP TO INCREASE THE SALES. Page 47 . Product Life Cycle CONCLUSION THE PRODUCT LIFE CYCLE CAN HELP THE ORGANIZATION TO KNOW WHERE DOES IT STANDS & HOW ITS PRODUCT IS DOING IN THE MARKET. AS PER THE RESULT THE ORGANIZATION CAN GO FOR ADOPTING DIFFERENT MARKETING STRATEGIES.

org Page 48 . Information has been collected from the below websites: www.en. Product Life Cycle BIBLIOGRAPHY Books referred: Marketing Management Productivity Quality Mgmt.wikipedia.

com www.managementparadise.com Page 49 . Product Life Cycle www.htm www.co.my/en/home.google.maggi.indianmba.in www.com.com www.ask.