Life Cycles

A Product Life Cycle looks at the different stages through which the product goes at different times from the starting point till it exits the market.

So why do life cycle stages change?

Life cycle stages change as different consumers come in or go out, some adopt the product, some become loyal customers while some don’t.

This happens because consumer requirements are met by different formats as competitors start coming in. Consumers look at all available choices in the market. As more and more competitors come in, it no longer remains a product life cycle, it becomes an industry life cycle. Thus the appropriate unit of analysis would be Industry Life Cycle.

At the same time, it is important to look at how the brand grows over a period of time. After all, a strong brand name adds great value.

As Stephen King,WPP Group,London righly said: A product is something made in a factory, a brand is something that is bought by the customer; a product can be copied by a competitor,a brand is unique; a product can be quickly outdated,a successful brand is timeless.

A Brand Life Cycle helps the company understand and change accordingly, it’s strategies and positioning of the brand. 

The different life cycle stages are shown below:

There are five different life cycle stages:

1)Development:

The ‘incubation stage’ when the product concept is developed,conceived and tested before being introduced in the market.

Strategies:

-         Deciding on the concept,pricing etc.

-       Pre-launch and initial promotions

 2) Introduction: When the product is introduced in the market, promotional expenditures are high to create product awareness and develop a market for the product. Profits are non existent because of high promotion and low sales. In this phase, promotion is mainly aimed at innovators and early adopters.

 Strategies:

When to enter the market?

-pioneer v/s market leader

2)Growth: This stage is marked by a climbing up of sales. Focus is now on building product preference and increasing market share of the product as new competitors enter. This is aimed mainly at early adopters.

 Strategies:

-Improve product quality: add new features

- Enter new market segments

-Increase distribution coverage

-Lower prices to attract next layer of price-sensitive buyers

-Taking advantage of economies of scale

3)Maturity: This stage comes when the strong growth in sales diminishes and the objective is to defend market share while maximizing profit. This is aimed at middle majority customers.

 Strategies:

- Market modification: Expand the market

- Product modification: Adding new features

- Market program modification: Modifying price,distribution etc.

4)Decline: This stage starts when sales show a decline. It could be for a number of reasons: shifting consumer preferences,increasing competition etc.

 Strategies:

-       Harvesting: Gradually reducing the product’s or business’s cost while trying to maintain sales.

-       Divesting:  Sell the product to another firm

Kissan is a food brand that originated in 1935,was acquired by Brooke Bond in 1993 from UB group, after which it formed an independent brand under HUL in 1994. 

Today, it is the market leader with the largest market share of 65% . It has reached a stage where it has quite a few competitors. A lot of existing customers have shifted to alternatives but the loyal customers continue to buy kissan jam. So right now, it is in it’s maturity stage where it needs to keep making multiple offerings to multiple customers and maintain the market share.