Download - PRODUCT LIFE CYCLE....A STUDY ON PHARMA & NON-PHARMA EXAMPLE

POOJA MANGAL

PHARMACEUTICAL MARKETING Product Life-Cycle Strategies

PRODUCT LIFE CYCLE

A concept that provides a way to trace the stages of a product is acceptance from its introduction (birth) to its decline (death).

STAGES OF PRODUCT LIFE CYCLE…

INTRODUCTION

GROWTH MATURITY

PLC shows the stages that products go through from Introduction to withdrawal from the market.

DECLINE

Product Life Cycle

Time

ProductDevelop-

ment

Introduction

Profits

Sales

Growth Maturity Decline

Losses/Investments ($)

Sales andProfits ($)

Product Life-Cycle Strategies Product

development Introduction Growth Maturity Decline

Begins when the company develops a new-product idea

Sales are zero Investment costs are

high Profits are negative



Low sales High cost per

customer acquired Negative profits Little competition Demand is created Customers made to

try the product

Introduction Stage of the PLC

SalesSales

CostsCosts

ProfitsProfits

Marketing ObjectivesMarketing Objectives

ProductProduct

PricePrice

Low sales Low sales

High cost per customerHigh cost per customer

NegativeNegative

Create product awareness and trial

Create product awareness and trial

Offer a basic productOffer a basic product

Use cost-plus Use cost-plus

DistributionDistribution Build selective distributionBuild selective distribution

AdvertisingAdvertising Build product awareness among early adopters and dealers

Build product awareness among early adopters and dealers



Rapidly rising sales Average cost per

customer Rising profits Growing

competition

SalesSales

CostsCosts

ProfitsProfits


ProductProduct

PricePrice

Rapidly rising sales Rapidly rising sales

Average cost per customerAverage cost per customer

Rising profitsRising profits

Maximize market shareMaximize market share

Offer product extensions, service, warranty

Offer product extensions, service, warranty

Price to penetrate marketPrice to penetrate market

DistributionDistribution Build intensive distributionBuild intensive distribution

AdvertisingAdvertising Build awareness and interest in the mass market

Build awareness and interest in the mass market

Growth Stage of the PLC

Product Life-Cycle Strategies

Product development

Introduction Growth Maturity Decline

Sales peak Low cost per

customer High profits Competition begins

to decline Brand

differentiation

SalesSales

CostsCosts

ProfitsProfits


ProductProduct

PricePrice

Peak salesPeak sales

Low cost per customerLow cost per customer

High profitsHigh profits

Maximize profit while defending market share

Maximize profit while defending market share

Diversify brand and modelsDiversify brand and models

Price to match or best competitors

Price to match or best competitors

DistributionDistribution Build more intensive distributionBuild more intensive distribution

AdvertisingAdvertising Stress brand differences and benefits

Stress brand differences and benefits

Maturity Stage of the PLC



Declining sales Low cost per

customer Declining profits Declining

competition

SalesSales

CostsCosts

ProfitsProfits


ProductProduct

PricePrice

Declining salesDeclining sales

Low cost per customerLow cost per customer

Declining profitsDeclining profits

Reduce expenditure and harvest deletion

Reduce expenditure and harvest deletion

Phase out weak itemsPhase out weak items

Cut priceCut price

DistributionDistribution Go selective: phase out unprofitable outlets

Go selective: phase out unprofitable outlets

AdvertisingAdvertising Reduce to level needed to retain hard-core loyal customers

Reduce to level needed to retain hard-core loyal customers

Decline Stage of the PLC

PRODUCT LIFE CYCLE STUDY OF ASPIRIN

Aspirin market is about a century old. Early it was used as anti pyretic-analgesic but lost

its market to PCM and due to certain side effects of aspirin.

It was repositioned in the market with safer dosage forms such as Enteric coated tablets, Buffered coated , dispersible tablets.

Brands like Disprin , Microfine Aspro succeeded while lesser known brands vanished from the markets.

Example: Maggi Noodles

Stage 1: Introduction Launched in India in 1982 keeping in mind working

› women and children. Pioneer in instant noodle market. Low Price “BAS 2 MINUTE”

Stage 2: Growth Sales Increased 50% Market Share No 1 Brand “GOOD TO EAT FAST TO COOK”

Entry of a Competitor

Stage 3: Maturity

Introduced new VarietyPrice Rs 5 OnwardsBig Time Promotional OffersSlow Down In SalesMarket SaturationStage 4: DeclineBig Time Downfall in SalesFormulation Changed New products launchedFailure

Reintroduction of MAGGI Noodle

Reintroduced in 1999 Increased Distribution Focus on new segments of Society New & Interesting TV Commercial

CONCLUSION

The product life cycle stages explain the growth and decline of revenues and profits associated with a product or service.

The company has to develop appropriate strategies and tactics in each of these product life cycle stages in order to improve its market position and profitability.

All products, whether costly or cheap are mortal.

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