BY ESSENCE GROUP

PRODUCT LIFE CYCLE

Refers to the life of the product.A way to determine the stages

of a product's acceptance from its introduction to its decline.

The time a product spends in a stage of the product life cycle may vary from a few weeks to decades depending on the product.

some products when introduced may grow rapidly in the market such as fashion and toys but these decline rapidly also.Some products may also have long maturity stage such as coca cola and kelogg’s.

A tool to help marketers understand where their product is now what may happen which strategies are normally appropriate

Product life cycle depends upon: Type of productLevel of competitionMarket supportCustomer tastes

STAGES OF PRODUCT LIFE CYCLE

Product life cycle has Five Stages:

Product developmentIntroduction GrowthMaturityDecline

PRODUCT DEVELOPMENT

Begins when the company develops a new-product idea

Sales are zeroInvestment costs are highProfits are negative

INTRODUCTION STAGE

Characteristics:-The seller tries to stimulate

demandPromotion campaigns to get

increase public awarenessExplain how the product is usedIts Features, Advantages, BenefitsYou will lose money, but you

expect to make profits in the future

Sales are low, and profits are below the line because your costs are greater than the amount of money you make

you have “negative” profitNeed to spend a lot of money

on promotion

GROWTH STAGE

Characteristics:-A lot is sold - The seller tries to

sell as much as possible.Other competitor companies

watch, and decide about joining in with a competitor product.

Growth will continue until too many competitors in the market - and the market is saturated.

At the end of the growth stage, profits start to decline when competition means you have to spend more money on promotion to keep sales going.

Spending money on promotion cuts into your profit.

MATURITY STAGE

Characteristics:-Many competitors have joined - the

market is saturatedThe only way to sell is to begin to

lower the price - and profits decreaseIt is difficult to tell the different

between products since most have the same F.A.B. - Features, Advantages & Benefits

“Persuasive Promotion” becomes more important during this stage

DECLINE STAGECharacteristics:-Newer products are now more attractive

even a low price does not make consumers want to buy.

Profit margin declines - and so the only way to make money is to sell a high volume

To increase volume you try to 1. Increase the number of customers -

get new customers 2. Increase the amount each customer

uses

OUR PRODUCT

KELVINATOR: 1963-2005

An appliance company owned by Electrolux of Sweden

Came to India in 1963sold to Whirlpool In 1996It came back in the hands of

electrolux in 1997In 2005 it was finally taken off

because of huge losses and the inability of Electrolux to continue to build this product

INTRODUCTION

Kelvinator came to India in 1963.. A global brand, Kelvinator has its origin dated back to 1914.The brand changed hands so many times and came to the fold of Electrolux in 1985.

It came with a catchy tag line “the coolest one”

And with a nice mascot of penguin.

Rapid growth in sales and profit

Increased Profits due to an increase in output

During its growth period it had a market share of 14%

This brand was endorsed by Adam Gilchrist

Kelvinator compressors were one of the best available globally. The brand along with Godrej, Allwyn has ruled the market for decadesThe brand was considered to be the toughest and most reliable oneBrand equity was powerful

DECLINE STAGE

Kelvinator brand lost its place because it fell into a cobweb of ownership issues.

Growth rate and market fell. In 2001 -24%, in 2003 – 17.3%

Product began to lose appeal for the client

Could not face the competition given by rival companies.

In the ending stages it suffered the loss 0f 300 crores.

In India, the brand's disaster started in 1996

when Whirlpool acquired this brand globally. Whirlpool wanted to sacrifice

Kelvinator for its own brand.

In India during 1996 Kelvinator's Indian license was sold to Whirlpool.

Whirlpool had the license to market Kelvinator brand in India till 1997. Because of this Electrolux re-entered Indian market with its own parent brand. The fate of Electrolux in India was also not good since it ran into huge loses.

Kelvinator brand lost its place because it fell into a web of ownership issues.

Whirlpool did not invest in Kelvinator since it had the rights to the brand only till 1997.

Kelvinator which ruled Indian refrigerator industry is no more. The brand did not die on its own. This heritage brand was killed by sheer negligence.