Index

1. The Product Life Cycle Definition

i.
INTRODUCTION STAGE
ii. GROWTH STAGE
iii. MATURITY STAGE
iv. DECLINE STAGE
2.
3.
4.
5.

MANAGING THE PRODUCT LIFE CYCLE

BRANDING AND BRAND MANAGEMENT
BRANDING STRATEGIS
CREATING CUSTOMER VALUE THROUGH
PACKAGING AND LABELING.
6. MANAGING THE MARKETING OF
SERVICES
7. OBJECTIVES OF PRODUCT LIFE CYCLE
8.
STRATEGIS OF PRODUCT LIFE CYCLE
9.
PRODUCT LIFE CYCLE OF CADBURY
DAIRY MILK
10. PRODUCT LIFE CYCLE OF MAGGI
11. PRODUCT LIFE CYCLE OF AMUL
12. BIBLIOGRAPHY

The Product Life Cycle

Definition
This is the idea that products, like people, have a birth, a life and a
death, and that they should be financed and marketed with this in mind.
Even as a new product is being launched, its manufacturer should be
preparing for the day when it has to be killed off. Its sales and profits
start at a low level, rise (it is hoped) to a high level and then decline
again to a low level. This cycle is sometimes referred to simply as PLC.
Product Life Cycle - the stages a new product goes through in the
marketplace
Introduction
Growth
Maturity
Decline

INTRODUCTION STAGE
The introduction Stage of the product life cycle occurs when a product
is first introduced to its intended target market. When the product is
introduced, sales will be low until customers become aware of the
product and its benefits. Some firms may announce their product before
it is introduced, but such announcements also alert competitors and
remove the element of surprise. Advertising costs typically are high
during this stage in order to rapidly increase customer awareness of the
product and to target the early adopters. During the introductory stage
the firm is likely to incur additional costs associated with the initial
distribution of the product. These higher costs coupled with a low sales
volume usually make the introduction stage a period of negative profits.

* Sales grow slowly

* Profit is minimal due to large investment costs in product
development
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* The marketing objective for the company is to create customer

awareness and
Stimulate trial.
Companies often spend heavily on advertising and other promotion
tools to build product awareness.
Primary demand - the desire for the product class rather than
for a specific
Brand
As more competitors introduce their products a firm focuses
on creating selective demand, the preference for a specific
brand.
Other marketing mix variables are important at this stage.
Gaining distribution can be a challenge because channel
intermediaries
May be hesitant to carry a new product.
During introduction pricing can be either high or low. A high
price or
Skimming strategy is used to help the company recover the
costs of developMent as well as capitalize on the price insensitivity of early
buyers.
Since high prices tend to attract competitors because they see
the opportunity
For profit, a company can price low, referred to penetration
pricing, to build unit volume.

GROWTH STAGE
The growth stage of the product life cycle is characterized by rapid
increases in sales and when competitors appear. The growth stage is a
period of rapid revenue growth. Sales increase as more customers
become aware of the product and its benefits and additional market
segments are targeted. Once the product has been proven a success and
customers begin asking for it, sales will increase further as more
retailers become interested in carrying it. The marketing team may
expand the distribution at this point. When competitors enter the
market, often during the later part of the growth stage, there may be
price competition and/or increased promotional costs in order to
convince consumers that the firm's product is better than that of the
competition.
Profit usually peaks during growth stage because of more
competitors and more aggressive pricing.
Advertising shifts to stimulating selective demand, in which
product benefits
Are compared with those of competitors offerings to gain
market share.
Product sales grow at an increasing rate because new people try or use
the product and a growing proportion become repeat purchasers people who tried the product, were satisfied and bought again.
*Failure to achieve substantial repeat purchasers usually means
an early death for a product
It is important to gain as much distribution for the product as
possible.

MATURITY STAGE
The maturity stage is the most profitable. While sales continue to
increase into this stage, they do so at a slower pace. Because brand
awareness is strong, advertising expenditures will be reduced.
Competition may result in decreased market share and/or prices. The
competing products may be very similar at this point, increasing the
difficulty of differentiating the product. The firm places effort into
encouraging competitors' customers to switch, increasing usage per
customer, and converting non-users into customers. Sales promotions
may be offered to encourage retailers to give the product more shelf
space over competing products.
The maturity stage is characterized by a slowing of total industry sales
for the product class.
Weaker competitors begin to leave the market
Most consumers who would buy the product are either repeat
purchasers
Of the item or have tried and abandoned it.
Sales increase at a decreasing rate as fewer buyers enter the
market
Profits decline because there is fierce competition
Marketing attention is directed toward holding market share
through
Further product differentiation and finding new buyers.

DECLINE STAGE
Eventually sales begin to decline as the market becomes saturated, the
product becomes technologically obsolete, or customer tastes change. If
the product has developed brand loyalty, the profitability may be
maintained longer. Unit costs may increase with the declining
production volumes and eventually no more profit can be made.
The decline stage occurs when sales and profits begin to drop due to
changes in the marketing environment.
*Technological innovation often precedes the decline stage as newer
technologies
Replace older ones.
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 Product deletion - dropping a product from the companys

product line
Harvesting - when a company continues to offer the product
but reduces
Marketing costs.

II MANAGING THE PRODUCT LIFE CYCLE

Marketers rely on three ways to manage a product through successive
stages of its life cycle.
Modifying the Product
Product modification involves altering a products
characteristic, such as its
Quality, performance, or appearance, to try to increase the
products sales.
Modifying the Market
With market modification strategies, a firm tries to do three things:
1. Find new users - new market niches
2. Increase use - promote more frequent consumption especially during
low
Use periods.
3. Creating new use situations - identify new applications
Repositioning the Product
Product repositioning is changing the place a product occupies in a
consumers mind relative to competitive products. This is done to
increase sales by changing one or more of the four marketing mix
elements.
Reasons to reposition a product include:
Reacting to a competitors position
Reaching a new market
Catching a Rising Trend
Changing the value offered
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Trading up - adding value through additional features or higher

quality materials
Trading down - reducing the number of features, quality or price.

III Branding and Brand Management

A basic decision in marketing products is branding, in which an
organization uses a name, phrase, design, symbol or combination of
these to identify its products and distinguish them from those of
competitors. Create a unique identity.
Brand name - is any word, design, sound, shape or color, or a
combination
Of these to create an identity and distinguish a sellers goods
or services.
Some brand names can be spoken with others cannot, such as
a logotype or logo
Recognizing competing products by brand allows consumers
to be more efficient shoppers. They can:
1. Avoid products they are dissatisfied with
2. Become more loyal to those they like
Successful and established brands take on a brand personality, a set of
human characteristics associated with a brand name.
Consumers often assign personality traits to products - traditional,
romantic, rugged, sophisticated, rebellious - and choose brands that are
consistent with their own or desired self-image.
Brand Equity - the added value a given brand name gives to a product
beyond the functional benefits provided.
Brand Equity provides a competitive advantage
Consumers are often willing to pay a higher price for a
product with
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Brand equity.
To build brand equity you must:
Develop a positive brand awareness
Establish the brands meaning in the minds of consumers in
terms of both functional and abstract values or dimensions
Create an intense, active loyalty relationship between
consumers and the brand
Brand equity provides a financial advantage for the brand owner.
Successful, established brands have an economic value, they
can be bought or
Sold.
They can appreciate in value when effectively managed - and
lose value when
Not well managed.
Brand licensing is a contractual agreement whereby one
company (licensor)
Allows its brand name(s) or trademark(s) to be used with
products or services
Offered by another company (licensee) for a royalty or fee.
Branding Strategies
1. Multiproduct branding - when a company uses one name for all its
products in
A product class. Sometimes called family branding or corporate
branding.
2. Multibranding - give each product a distinct name and is useful when
each
Brand is intended for a different market segment.
2. Private branding or Private Labeling - when it manufacturers
products but
Sells them under the brand name of a wholesaler or retailer.
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IV CREATING CUSTOMER VALUE THROUGH PACKAGING

AND LABELING
The packaging component of a product refers to any container in which
it is offered for sale and on which label information is conveyed.
a label is an integral part of the package and typically
identifies the product or
brand, who made it, how it is to be used, package contents and
ingredients
The customers first exposure to a product is the package and
label and both
Are an expensive and important part of marketing strategy.
Packaging and labeling costs companies more than $100
billion annually and
Account for about 15 cents of every dollar spent by consumers
for products.
Label information on the package communicates how to use
the product and
What the product is made of. These are legal requirements of
disclosure.
Labeling system in US provides a uniform formant for
nutritional and dietary
Packaging can have brand equity benefits for a company
Packaging plays an important functional role, such as storage,
convenience,
Protection, or product quality ( theft prevention)
Consumer protection is an important function - safety seals,
and open-dating (which states the expected shelf life of the
product.
V MANAGING THE MARKETING OF SERVICES

The marketing of services also uses the four Ps framework but with
some differences.
A Service (product)
Exclusivity - a major difference between products and services is that
services cannot be patented, which results in many imitators.
Branding - because services are intangible, the brand name is
particularly important in the consumer purchase decision. Brand names
help make the abstract nature of services more concrete.
Most services have a limited capacity due to the inseparability of the
service from the service provider and the perishable nature of the
service (time).
B. Price
In the service industry price is referred to in various ways - hospitals
(charges), lawyers have (fees), airlines have (fares), and hotels have
(rates).
Price plays two essential roles in services:
Affects consumer perception. Since services are intangible,
Price can indicate quality of the service.
Many services use off-peak pricing, which consists of
charging a different
Price during different times of the day or days of the week or
seasons.

C. Place (distribution)

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Place is a major factor in developing a service marketing strategy

because of the inseparability of services from the producer.
The availability of electronic distribution through the internet
now provides
Global coverage for some services.
D. Promotion
The value of promotion for many services is to show the benefits of
purchasing the service by stressing availability, location, quality,
competitive advantage, etc.
*In the past advertising has been viewed negatively by many nonprofit
And professional organizations.
Publicity has played a major role in the promotional strategy
of nonprofit
Services and some professional organizations.
Many nonprofits use free public service announcements
(PSAs) to promote
Their messages.

Stages
1. Sales

Introduction Growth Maturity Decline

Low Sales
Rapidly
Peak Sales Declining
Increasing
Sales
Sales
2. Costs
High cost per Average
Low cost Low cost
customer
cost per
per
per
customer customer customer
3. Profits
Negative
More Profit High Profit Declining
Profit
4. Customer Innovators
Early
Early
Laggards
Adopters Majority +
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5.
Few
Competitor

More in
number

Late
Majority
Stable
Declining
number, numbers.
beginning
to decline

Objectives of Product Life Cycle

Stages
Introduction Growth
Objectives: Create product Maximize
awareness and market
Trial
share

Maturity
Maximize
profits and
defend
market
share

Decline
Reduce
expenses &
milk brands

Strategies of Product life Cycle

Stages
1. Product

Introduction Growth Maturity

Decline
Offer basic
Offer
Diversify brands / Phase out
product
product
models
weak
extension,
products
service,
warranty
2. Price
Change cost + Price to
Price to match
Cut price
penetrate better competition
market
3.
Build selective Build
Build more
Selective
Distribution distribution intensive intensive
phase out of
distribution distribution
unprofitable
unit
Build product Build
Stress
Reduce to
4.
awareness
awareness onbranddifference retain hard
Advertising among early and interest and benefits
core loyals
adopters and in mass
dealers
market
5. Sales
Use heavy
Reduce
More sales
Reduce to
Promotion sales
sales
promotion to
minimum
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promotion to promotion encouragebrand

induce trial
due to
switching
increased
consumer

level

Product Life Cycle Of Cadbury Dairy Milk

Cadbury chocolates was started in Birmingham in 1824 by John
Cadbury. Chocolate in those days was a very elitist product. Cadbury
Dairy Milk came up with the mix of milk and chocolate tray which is
pretty much how the product still is. There has been no drastic change
in the recipe of the product but the packaging and the representation
and prominence of the 'glass and half of milk' logo has changed over a
period of time.
"
Cadbury India began its operations in 1948 by importing chocolates
and then re-packing them before distribution in the Indian market.
Today, Cadbury has five company-owned manufacturing facilities at
Thane, Induri (Pune) and Malanpur (Gwalior), Bangalore and Baddi
(Himachal Pradesh) and 4 sales offices (New Delhi, Mumbai, Kolkota
and Chennai). Its corporate office is in Mumbai.Worldwide,
A Timeline:
1904 A new recipe is perfected by George Cadbury for milk
chocolate.
1905 Cadbury launches Dairy Milk onto the market - a new milk
chocolate that contains far more milk than anything previously tasted
and with a unique creamy taste.
1913 Dairy Milk becomes Cadbury's best selling line.

13

Mid 1920s Dairy Milk becomes UK brand leader - a position it still

enjoys today.
1928 Fruit & Nut is introduced as a variation of Dairy Milk. The
"glass and a half" advertising slogan is introduced.
1933 WholeNut is added to the Dairy Milk family.
1948 Cadbury Dairy Milk is sold in India
1998 Dairy Milk is re-launched with the new and modern pack
design, but its recipe and unique taste are still very similar to the
original recipe.
2005 Cadbury Dairy Milk celebrates its 100th birthday.
Brand Identity : Kapferer's model

Stage in the Product Life Cycle

Cadbury Dairy Milk is in the maturity stage of the product Life cycle. It
currently has a market share of 70% in the chocolate market and is way
ahead of its competitors. There is a high degree of brand awareness.
The colour purple and the 'glass and half full' logo is amongst the most
recognised logos and the association of the two with Cadbury Dairy
Milk is synonymous.
Market Scenario/Challenges
According to AC Nielson study of 2007:
Facts & Figures
The Indian Chocolate market is estimated to beat around 1500crores.
It is growing at the rate of 18-20% per annum
With 72% of the market share in India, Cadbury is the market leader.

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Companies
The 2 main competitors in the Indian market that Cadbury faces any
competition from are Nestle and Amul.
There are several new and local brands like Candico, Sweet World etc.
which are trying to make its presence felt.
Consumer Trends
The Mithaai or sweet has been the tradition in India so far. Chocolates
are now trying to break into that league and hence faces stiff
competition more from this product category than its immediate
competitors.
Chocolates are more of an impulse buy.
Consumers are preferring chocolates to Mithaai because of proper
packaging, longer shelf life, mid-range pricing and convenience.
Consumers have started showing interest in not just milk chocolates but
other varieties like Dark Chocolate etc.
One of the major challenges that Cadbury Dairy Milk faces is a decline
in sales due to new variants being introduced in the market by other
brands which could result in the product moving from maturity to
decline stage. Another major challenge comes from a different product
category altogether which is the Indian Sweets or Mithaai.
Steps taken by brand at each stage- at a communication and product
level

THE INTRODUCTION STAGE

1824 Cadbury Dairy Milk was invented with the mix of milk and
chocolate tray by John Cadbury.
1904 A new recipe is perfected by George Cadbury for milk
chocolate.
15

 1905 Cadbury launches Dairy Milk into the market. (UK)

Cadbury Dairy Milk in India redefined itself as the perfect
expression of spontaneous, shared good feelings, providing the real
taste of life experience through its brand strategy
The brand grows by over 50% in sales volume.
1928 Heavy investment begins in Cadbury Dairy Milk ads
stressing its high milk content. (UK)

THE GROWTH STAGE

1928 Fruit and Nut is introduced as a variation of Dairy Milk.
1933 Whole Nut is added to the Dairy Milk Family.

1948 Cadbury Dairy Milk in sold in India.

1998 Cadbury Dairy Milk popularized its consumption in a social
context, especially in more traditional settings such as Weddings which
are prevalent in India with the campaign Khaanein waallon ko
khaanein ka bahana chahiye meaning

Cadbury Dairy Milk aimed to substantially increase penetration

levels through its award winning campaign Kuchh khaas hai

16

 The brand penetrated into smaller towns and sales volume grew by
40%
THE MATURITY STAGE
1913 Dairy Milk becomes Cadburys best-selling line (UK).
Currently, Cadbury Dairy Milk is prospering in this stage.
Has Indias 70% of Chocolate consumption Market Share and is the
market leader.
2004 Using Amitabh Bachhan CDM launched their new
positioning of Kuch Meetha Ho Jaaye bringing in the tradition of
celebrating a joyous occasion in India with sweets (Mithaai) along
with the Cadbury Dairy Milk.

The Pehli Tareekh Hai campaigns talked about the importance of

celebrating with a Dairy Milk on pay-days.

2010 Shubh Aaramb brought in the old charm of Cadbury

Dairy Milk with its unique strategy of mixing traditions with the new
age.

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 Cadbury Dairy Milk introduces new product Silk as the brand is

doing very well.

2013 Introduces the campaign Khaane ke baad kuch meetha ho

jaaye aiming to inculcate the idea of having a Cadbury Dairy Milk as
an everyday post dinner dessert.

DECLINE
(Potential Challenges and Threats)
Consumers have started showing interest in other categories of
chocolate such as dark chocolate (Bournville).
A major challenge is the growing popularity of fresh Indian sweets
or Mithaai.

Summary
Cadbury Dairy Milk has adapted itself to the Indian market quite
impressively. From making a sweet eating nation to switch to
chocolates to becoming the market leader, Cadbury Dairy Milk has
done it all because of the emotional connect it established with the
consumers. Its communication also always focused on the emotional
aspects and feelings of life apart from spontaneity. Its communication
has always showcased its values and personality
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PRODUCT LIFE CYCLE OF MAGGI

INTRODUCTION OF MAGGI 2-MINUTE NOODLES

Its a Brand of Instant Noodle made by Nestle India Ltd.

It was Found by the Maggi family in Switzerland in the
19th century.
Nestle launched Maggi for the first time in India in the year 1982.
The Brand is popular in :
Australia
New Zealand
Singapore
India
South Africa
Malaysia
Nestle wanted to explore the potential for such an Instant food
among the Indian market.
It took several years and lot of money for Nestle to establish its
Noodles brand in India.
Now it enjoys around 90% market share in this segment.
Over the Years Maggi has Launched several products under its Brand
Name.
ISSUES
Different phases product life cycle of Maggi
Why Atta Noodle was a Failure ?
Strategies taken to Establish new product category.
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What measures NIL should take to sustain the image of a popular

brand image.
Stage at which Maggi is in the product life cycle.
PRODUCT LIFE CYCLE
A Concept that provides a way to trace the stages of a product's
acceptance, from its introduction(birth)to its decline (death).

INTRODUCTORY STAGE

High-failure Rates
No Competition
Frequent product and Modification
Limited Distribution
High-marketing and product costs
Promotion focuses on awareness and Information
2-minute instant noodle was great success.

20

Market Penetration Strategies

Promotional campaigns in school.

Advertising strategies: - focusing on kids.
New product innovation according to the need of consumers:
Veg
Atta
Noodles
Dal
Atta
Noodles
Cuppa Mania
Availability in different packages:
50 gms.
100 gms.
200 gms.
Family packs (400gms.).

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Conducting regular market research

GROWTH STAGE
Increasing rate of sales
Entrance of competitors
Initial healthy profits
Promotion emphasizes brand ads
Prices normally fall
Development costs are recovered
10 yrs back it enjoyed around 50% market share in this segment
which was valued at around 250 crores.
In order to improve sales , NIL changed the formulation of Maggi
noodles in 1997.
However, this proved to be a mistake, as consumers did not like the
taste of the new noodles.
In March 1999, NIL reintroduced the old formulation of the noodles,
after which the sales revived. Over the years, NIL also introduced
several other products like soups and cooking aids under the Maggi
brand. Offered in more sizes, flavors, options

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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, Knorr Annapurna.
The new product, called Knorr Annapurna Soupy Snacks, was priced
aggressively at Rs 5 and had four variants: two chicken options and two
vegetarian.
Like Maggi, Soupy Snacks will be an in-between-meals snack and
will be targeted at all age groups, particularly office-goers. Many
consumer products are in Maturity Stage.
DECLINE STAGE
If no product innovation brought
Long-run drop in sales
Large inventories of unsold items
Elimination of all nonessential marketing expenses Rate of decline
depends on change in tastes or adoption of substitute products

23

Product Life Cycle Of AMUL

Consumers buy millions of products every year. And just like
consumers, these products have a life cycle. Older, long-established
products eventually become less popular, while in contrast, the demand
for new, more modern goods usually increases quite rapidly after they
are launched. The product life cycle has 4 very clearly defined stages,
introduction,maturity,growth and decline each with its own
characteristics that mean different things for business that are trying to
manage the life cycle of their particular products.

INRODUCTION
The first dairy, Kaira District Co-operative Milk Producers Union was
established in the year 1946 in Anand district of Gujarat, which created
Amul in 1955 and handed over the brand name to GCMMF in
1973. Since farmers sold all the milk in Anand through a co-operative
union, it was commonly resolved to sell the milk under the brand name
AMUL. At the initial stage only 250 liters of milk was collected every
day. But with the growing awareness of the benefits of the
cooperativeness, the collection of milk increased.Between 1955 and
1970, milk production grew by barely 1 per cent annually, while per
capita milk availability declined by an equivalent amount.

24

GROWTH
Amul milk production increased to 31.6 million metric tons by 198081, 53.9 million by 1990-91, and 84.6 million by 2001-2. The annual
growth rate was 4.08 per cent during the first phase of Operation Flood.
It was much higher (7.85 per cent) during the second phase, and
production continued to grow at 5.05 per cent per year during the third
phase.
As a result of substantial increase in milk production, milk
consumption in India has risen from a low of 112 grams per day in
1968-69 to over 226 grams per day in 2002. With growing competition
from brands like Nestle, Mother dairy, Britannia, Gokul; Amul
introduced new products like Amul milk gold, Amul moti, Amul chai
maza, Amul slim trim etc.

25

MATURITY
Amul is one of Indias most iconic brands. It is 1st and only
organization in the world to get ISO 9000 standard for its farmer
cooperatives. Today Amul collects 11 Lakhs liters of milk everyday. It
has become worlds largest pouch milk brand. With $2 billion in
revenue, the brand is as recognizable across India as Coca-Cola and
recently Amul milk has entered overseas market such as Mauritius,
UAE, USA, Oman, Bangladesh, Australia, China, Singapore, Hong
Kong and other South African countries. Today Amul Dairy is no.1 in
Asia and no.2 in the world which is a matter of proud for Gujarat and
the whole of India.
DECLINE
Decline is the stage where product decline and dies. Though Amul
milk went through controversy of mozzarella-like milk it survived
and did not let the product decline. Also hardly any other products of
Amul has seen the decline stage and now whose production is stopped.

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BIBLIOGRAPHY

Google
Wikipedia
www.scribled.com
(http://www.innovation.cadbury.com/allaboutus/ourbrands/featurebrand
s/Pages/CadburyDairyMilk2.aspx?TabIndex=1)

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