product life cycle....a study on pharma & non-pharma example
DESCRIPTION
The slide gives a good knowledge to a layman about the one of the most imp. topic in mgmt i.e. PLC.TRANSCRIPT
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POOJA MANGAL
PHARMACEUTICAL MARKETING Product Life-Cycle Strategies
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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).
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STAGES OF PRODUCT LIFE CYCLE…
INTRODUCTION
GROWTH MATURITY
PLC shows the stages that products go through from Introduction to withdrawal from the market.
DECLINE
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Product Life Cycle
Time
ProductDevelop-
ment
Introduction
Profits
Sales
Growth Maturity Decline
Losses/Investments ($)
Sales andProfits ($)
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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
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Product Life-Cycle Strategies Product
development Introduction Growth Maturity Decline
Low sales High cost per
customer acquired Negative profits Little competition Demand is created Customers made to
try the product
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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
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Product Life-Cycle Strategies Product
development Introduction Growth Maturity Decline
Rapidly rising sales Average cost per
customer Rising profits Growing
competition
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SalesSales
CostsCosts
ProfitsProfits
Marketing ObjectivesMarketing Objectives
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
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Product Life-Cycle Strategies
Product development
Introduction Growth Maturity Decline
Sales peak Low cost per
customer High profits Competition begins
to decline Brand
differentiation
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SalesSales
CostsCosts
ProfitsProfits
Marketing ObjectivesMarketing Objectives
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
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Product Life-Cycle Strategies Product
development Introduction Growth Maturity Decline
Declining sales Low cost per
customer Declining profits Declining
competition
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SalesSales
CostsCosts
ProfitsProfits
Marketing ObjectivesMarketing Objectives
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
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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.
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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
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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
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Reintroduction of MAGGI Noodle
Reintroduced in 1999 Increased Distribution Focus on new segments of Society New & Interesting TV Commercial
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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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ANY QUERIES
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Thank You