Beruflich Dokumente
Kultur Dokumente
life They are Born, grow, Mature and finally die The basic difference between both is Product has to be killed by a company. Product is killed because of declining sales and losses being occurred.
Overestimation of Market Size Product Design Problems Product Incorrectly Positioned, Priced or Advertised Costs of Product Development Competitive Actions
customers.
Test Marketing
Commercialization
Systematic Search for New Product Ideas Internal sources Customers Competitors Distributors Suppliers
ones Criteria
Market Size Product Price Development Time & Costs Manufacturing Costs Rate of Return
2. Concept Testing - Test the Product Concepts with Groups of Target Customers
Objectives of PLC
Stages Introduction Growth Maturity Decline
Maximize Reduce profits and expenses & defend milk brands market share
Profits Time Product Development Losses/ Investments ($) Introduction Growth Maturity Decline
Low sales High cost per customer Negative Create product awareness and trial Offer a basic product Use cost-plus
Build selective distribution Build product awareness among early adopters and dealers
Sales
Costs Profits
Marketing Objectives
Rising profits Maximize market share Offer product extensions, service, warranty Price to penetrate market
Build intensive distribution Build awareness and interest in the mass market
Sales
Costs Profits
Marketing Objectives
High profits Maximize profit while defending market share Diversify brand and models Price to match or best competitors Build more intensive distribution Stress brand differences and benefits
Sales
Costs Profits
Marketing Objectives
Declining profits Reduce expenditure and milk the brand Phase out weak items
Cut price Go selective: phase out unprofitable outlets Reduce to level needed to retain hard-core loyal customers
Time
Sales grow rapidly when the product is introduced, then fall to a petrified
level that is sustained by late adopters buying the product for the first time and early adopters replacing the product.
Often characteristic of small kitchen appliances such as handheld mixers and
bread makers.
Cycle-Recycle Pattern
Sales Volume
Primary Cycle
Recycle
Time
another promotion push, which produces a second cycle of smaller magnitude & duration.
E.g. sales of new drugs of a pharmaceutical company.
Scalloped Pattern
Sales Volume
Time
the many new uses parachutes, hosiery, shirts, carpeting, boat sails, automobile tires, that continue to be discovered over time.
- Penetration Pricing
- Push & pull Strategies
Maturity
Decline
- kellogs had a world wide recognition over 100 years for healthy breakfast cereals - nutrigrain, rice crispies, cornflakes etc.. - each brand holds competitve image in the market. - Nutri Grain product did quite well in the market but after a certain extent sales were declining
diagram) in 1997 it was immediately successful, gaining almost 50% share of the growing cereal bar market in just two years. 2. Growth - Nutri-Grains sales steadily increased as the product was promoted and became well known. It maintained growth in sales until 2002 through expanding the original product with new developments of flavour and format. This is good for the business, as it does not have to spend money on new machines or equipment for production.
businesses to start selling similar products. This indicates the third stage of the life cycle - maturity. This is the time of maximum profitability, when profits can be used to continue to build the brand. Kellogg's continued to support the development of the brand but this was not enough to offset the overall sales decline. 4. Saturation- This is the fourth stage of the life cycle and the point when the market is full. By mid-2004 Nutri-Grain found its sales declining whilst the market continued to grow at a rate of 15%. 5. Decline - Clearly, at this point, Kellogg's had to make a key business decision. Sales were falling, the product was in decline and losing its position. Should Kellogg's let the product die, i.e. withdraw it from the market, or should it try to extend its life
Identifying problem
Extending Nutri Grain Cycle instead of
Diversification. Nutri Grain soft bake was launched with Promotional Pricing i.e discounted Pricing. Sales increased by 80%..