Product Life Cycle

PRODUCT
LIFE
CYCLE

INTRODUCTION:

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 Product Life Cycle

The product life cycle describes the sale pattern of a product over
time. After launching the product the management wants the product
to enjoy a long and happy life. Although it does not expect the product
to sell forever, the company wants a decent profit to cover all the effort
and risk that went into launching it. Management is aware that each
product will have a life cycle, although the exact shape and length is
not known in advance.Generally the time span begins with products
introduction in the market and ends with its obsolescence and
replacement. While the form of the life cycle is fairly standard and is
subject to variations.

The product life cycle is based upon the biological life cycle. For
example, a seed is planted (introduction); it begins to sprout (growth);
it shoots out leaves and puts down roots as it becomes an adult
(maturity); after a long period as an adult the plant begins to shrink and
die out (decline).some products may have a short life cycle, whereas
others may enjoy a longer life. Product life cycle refers to the
progression or products sales and profits over its lifetime.

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 Product Life Cycle

It’s said that a product has a life cycle is to assert

four things:

1. Products have limited life.

2. Product sales pass through distinct stages, each posing

different challenge opportunities, and problems to seller.

3. Profits rise and fall at different stages of product life cycle.

4. Product requires different marketing, financial, manufacturing,

purchasing, and human resource strategies in each life cycle
stage.

The concept underlying the premises of product

life cycle is that all products pass through the
stages outlined below:

1. Introduction stage.

2. Growth stage.

3. Maturity stage.

4. Decline stage.

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 Product Life Cycle

STAGES
OF
PRODUCT
LIFE CYCLE
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 Product Life Cycle

GRAPHICAL REPRESENTATION OF
STAGES OF PRODUCT LIFE CYCLE.

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BASIC STAGES IN PRODUCT LIFE CYCLE

The first and foremost stage of products life cycle is the

INTRODUCTION stage. The INTRODUCTION stage starts when the
new product is first launched. Introduction takes time and the sales
growth tends to be slow at this stage. Because it takes time to roll out a

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 Product Life Cycle

new product and fill dealer pipelines .if the product introduction proved
to be successful, rapid GROWTH stages are reached and sales increase
markedly. According to the concept of life cycle, the market for any
product is limited, and sales will generally fall short of their potential.
When this point is reached, the market enters the maturation stage.
The life cycle goes on further to assume that each product eventually is
replaced by another or that initial rapid growth will end in decline.

If a product enters a market that has already moved into

MATURE stage. Competition is intense because the product must
compete for share of an existing market Thai is not experiencing
growth. Once the market enters the DECLINE stage, new products are
not entering the market and demand levels are falling. At this, the
objective is to increase market share to maintain stable sales levels.

INTRODUCTION STAGE

Introductory stage is (also called as market pioneering

stage)is the first stage in the life cycle of the product.

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During the introduction stage, the product is just introduced to the

market . In this stage, the firm seeks to build product awareness and
develop a market for the product. Sales revenue begins to grow along
with demand but rate of growth is rather slow. There may not be ready
market for product. Sales are low, the product undergoes teething
troubles; profit seems remote possibility; demands have to be created
& developed; & the customers have to be prompted to try out the
product. The profit during this stage may be less due to low sales that
also supplemented by heavy production & distribution cost. The
expenditure on advertising will also be heavy. Consumer will purchase
on trail basis. The impact on the marketing mix is as follows:

• Product branding and quality level is established and

intellectual property protection such as patents and trademarks
are obtained.

• Pricing may be low penetration pricing to build market share

rapidly, or high skim pricing to recover development costs.

• Distribution is selective until consumers show acceptance of

the product.

• Promotion is aimed at innovators and early adopters.

Marketing communications seeks to build product awareness and
to educate potential consumers about the product.

Sales revenue begins to grow along with demand but the rate of growth
is rather slow. There may not be ready market for the product .Sales
are low, the product undergoes teething troubles; profit seems a
remote possibility; demands have to be created & developed; &the
customer have to be promoted to try out the product. The profit during

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this stage may be less due to low sales that also supplemented by
heavy production & distribution costs. The expenditure on advertising
will also be heavy .Consumer will purchase the product on trail basis.

The stage poses several problems for the marketer. The complexity of
the problems & the duration of the stage depend upon the nature of the
product, its price, its technological newness & the consumer’s view of
the product. In this stage , the demand has to be created & developed
so the firm has to invest heavily in the promotion & wait for the reward.

Introduction stage is characterized by:

*Low sales.

*High promotional expenditure.

*Low or no competition if the product is innovative.

*Loss or negligible profits.

*Survival problems, if there is strong competition.

*Higher dealer’s incentives.

GROWTH STAGE:

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Growth stage is the second stage in the life cycle of

the product.
During the growth stage, the product is accepted by the consumer and
traders. The market demand for the product increase and the size of
the market grows and the sales increase with speed. The profit from the
sales also increases. The firm gives special attention to raise the
volume of sales.

Then when during this stages, the introductory is setting down with is
product, competitors enter into scene with similar or slightly improved
version of the product. The introductory may have to alter his product
at this stage. He has to stay ahead of his competitors and persuade the
customer to prefer his brand.

For this, sales promotion measures at consumer level and dealer level
should be given consideration. Advertisement should also be made
extensively so as to have new customer for the product .The dealers
should be encouraged to repeat orders. Competition-oriented pricing
is useful during this stage. Similarly, marketing and distribution
efficiency becomes decisive factors at this stage.

In this way, during the growth stage, the volume of sale increases with
speed. The new customers join the existing users of the product. As a
result, the sales and profits of the company keep on increasing.

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The impact on the marketing mix in growth stage is as

follows:

Product: New product features and packaging options are

introduced and the product is diversified. There is improvement of
product quality.

Price: The price usually remains high due to entry of competitors.

Distribution: Distribution becomes more intensive. Trade

discounts are minimal if resellers show a strong interest in the
product.

Promotion: Increased advertising to build brand preference.

Growth stage is characterized by:

* Rapid growth in sales.

* Rise in profits.

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* Repeat purchases and brand loyalty.

* Increasing competition.

* Introduction of more product models.

* Intensive promotional effort.

MATURITY STAGE

Maturity stage is the fourth stage in life cycle of the

product

In maturity stage, sales turnover reaches to the highest level. Demand

tends to reach a saturation point. This maturity stage normally
lasts longer than the previous stages and it poses strong
challenges to the marketing management. Most products are in
the maturity stage of the life cycle, and therefore most of the
marketing management deals with the mature products. Price
competition becomes intense. The marketing expenditure goes
on increasing and this brings the margin of profit down.
Additional expenditure is also incurred for product modification,
improvement, differentiation and development. Even broadening
of the product line will be necessary in order to face pressure of
competition.

Along with this, special sales promotion measures are necessary in

order to stimulate demand and face market competition. Thus
special attention needs to be given for raising marketing

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effectiveness.In short, relatively low price, increased marketing

costs, keener competition and lesser profits are faced in this
stage. This situation continues for some period and this leads to
saturation position.

It’s a stage when sales turnover reaches to a specific level, which is a

saturation point. Orders are only of replacement orders.
Consumption achieves a constant rate. It is not possible to raise
the volume of sales to higher level. Efforts are required to be
made to maintain the position in the market by facing the
competitiors effectively.

Maturity stage is characterized by:

*Stagnation of sales.

*Decline in profits.

*Intense competition.

*Retentive or reminder advertising.

Although many products in the mature stage appear to remain

unchanged for long periods, most successful ones are actually
evolving to meet consumer needs. Product managers should do
more than simply ride along with or defend their mature product
a good offense is the best defense. They should consider
modifying the market, product, and marketing mix.

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The company can try modifying the marketing mix improving sales by
changing one or more elements.

It can cut prices to attract new users and competitor’s customers.

It can launch a better advertising campaign or use aggressive sales

promotions trade deals, cents-off, premiums, and contests.

The company can also move into larger market channels, using mass
merchandisers.

Finally, the company can offer new or improved services to buyers.

The company might also try modifying the product changing

characteristics such as quality, features, or style to attract new
users and to inspire more usage.

It might improve the product’s quality and performance its durability,

reliability, speed, or taste.

It might add new features that expand the product’s usefulness, safety,
or convenience.

Finally the company can improve the product’s styling and

attractiveness.

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The company might try to expand the market for its mature brand by
working with the two factors that make up sales volume:

Volume= number of brand users * usage rate per user

It can try to expand the number of brand users:

By converting non users

By entering into new segments.

By winning competitors customers.

The impact on the marketing mix in maturity stage is

as follows:

Product: Products are modified again, this time in reaction to

competitor products. The packaging may also change to exploit new
segments sometimes (e.g. shampoo sachets introduced to make
shampoo accessible to lower income groups).

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Price: Since sales volumes are high, prices come down and
discounts are more frequent. Pricing wars break out among
competitors as they vie for the ever shrinking new-customer base in
a saturating market. Sometimes a product may not reduce prices
but increase them to distinguish themselves as a superior product.

Distribution: New distribution channels are explored and

incentives are provided to resellers in order to avoid losing shelf
space to competitors.

Promotion: Emphasis on differentiation and building of

brand loyalty. The promotion budget may be a little lesser than
previous stages.

DECLINE STAGE

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 Product Life Cycle

Decline stage is the fourth and last stage of product

life cycle.

The sales of most product forms and brands eventually decline. Sales
decline for many reasons, including technological advance, shifts in
consumer tastes, and increased in competition, entry of new products
or due to reduction of the support of customer. Sales drops severely in
due course and the product fail to get support from the market.

Carrying a weak product can be very costly to a firm, and not just in
profit terms. There are many hidden costs. A weak product may take up
too much of management’s time. It often requires frequent price and
inventory adjustments. It requires advertising and sales force attention
that might be better used to make “healthy” products more profitable.
A product’s failing reputation can cause customer concerns about the
company and its other products. The biggest cost may well lie in the
future. Keeping weak products delays the search for replacements,
creates a lopsided product mix, hurts current profits, and weakens the
company’s foothold on the future.

For these reasons, company need to pay more attention to their highest
aging products. The firm’s first task is to identify those products in the
decline stage by regularly reviewing the sales, market shares, costs,
and profit trends. Then management must decide whether to maintain,
harvest or drop each of these declining products.

Management may decide to maintain the brand without change in the

hope the competitors will leave the industry.

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Management may decide to reposition or reformulate the brand in

hopes of moving it back into the growth stage of the product life cycle.
For that the firm has to reduce the price to maintain the support of the
customers. Expenditure on advertising and sales promotion will have to
be bought down as such expenditure is not adequately rewarded.

In a study of company strategies in declining industries, Kathryn

Harrigan identified five decline strategies available to the firm:

• Increasing the firm’s investment (to dominate the market or

strengthen its competitive position).

• Maintaining the firm’s investment level until the uncertainties

about the industries are revolved.

• Decreasing the firm’s investment level selectively, by dropping

unprofitable customer groups, while simultaneously
strengthening the firm’s investment to recover cash quickly.

• Harvesting (“milking”) the firm’s investment to recover cash

quickly.

• Divesting the business quickly by disposing of its assets as

advantageously as possible.

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 Product Life Cycle

In short, the marketing mix may be modified as

follows:

• Product - The number of products in the product line may be

reduced. Rejuvenate surviving products to make them look new
again.

• Price - Prices may be lowered to liquidate inventory of

discontinued products.

• Prices may be maintained for continued products serving a

niche market.

• Distribution - Distribution becomes more selective. Channels

that no longer are profitable are phased out.

• Promotion - Expenditures are lower and aimed at reinforcing

the brand image for continued products.

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 Product Life Cycle

Decline stage is characterized by:

• Entry of substitute.

• Decline in sales.

• Decline in profits at a rapid pace.

• Minimum promotional effort.

• Withdrawal or modification in products.

• Repositioning of product.

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 Product Life Cycle

MARKETING

STRATEGIE
S

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 Product Life Cycle

INTRODUCTION STAGE

The following are the various strategies at the

introduction stage:-

1. Product strategies:
Normally, the firm will concentrate on the single product which is
introduced. The firm may not go for product line extension. Again,
the firm may not come up with various models to cater the
different market segments.

The firm may spend addittional funds on research and

development to further improve the product, if need to be more
so in the case of consumer durable such as automobiles, in order
to correct the defects, if any, noticed after launching the product.

2. Price and promotion strategies:

In relation to price and promotion, a firm may follow one of the

following four strategies.

a) Rapid skimming:
The product can be launched at high price and with high
promotional expenditure.

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This strategies is suitable:

• When the market is large in size.

• When a large part of the market is unaware of the product and

therefore, high promotion, is required.

• When the buyers are willing to pay a higher price.

• Where there is a need to build brand image or preferences as

competition are likely in near future.

This strategy brings certain benefits:

• The firm may generate profit at the introduction stage, which will
enable the firm to cover up either partly or wholly the
development expenses.

• This strategy will enable the firm to build a good brand image
which will enable to face competition effectively as and when the
competitors enter the market.

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b) Slow skimming:
The product can be launched at high price and with low
promotional expenditure.

This strategy is suitable:

• When the market size is limited

• When the potential buyers are aware of the products features,

uses, etc. and therefore, low promotion.

• Where buyers are willing to pay a high price.

This strategy brings certain benefits:

• The firm may generate profits at the introductory stage.

• It requires less promotional expenditure and as such low

marketing overheads.

c) Rapid penetration:

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The firm can launch the product at low price and with high
promotional expenditure.

This strategy is suitable:

• When the market is large in size

• When a large part of the market is unaware of the product, and

therefore high promotion.

• Where the buyers are price sensitive.

• Where there is possibility of strong competition in near future, so

high promotional expenditure to build brand image or preference

• Where the company is in a position to achieve economic of large

scale production and distribution.

This strategy brings certain benefits:

• The firm can capture a large market share.

• It may build good brand image, which will enable to face

competition effectively as and when the competitors enter the
market.

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d) Slow penetration:
The product can be launched at a low price and with low
promotional expenditure.

This strategy is suitable:

• When the market is large in size, so low pricing.

• When the large part of the market is aware of the product’s

feature, uses, etc and so low promotion.

• Where the buyers are sensitive.

• When there is possibility of limited competition in future may be

due to high development expenditure for new entrants.

• Where the company is in a position to achieve economies of large

scale production and distribution.

This strategy brings certain benefits:

• It will enable the firm to capture a large share of the market

• It requires less promotional expenditure and as such low

marketing overheads.

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3. Distribution strategies:

a) Concentrated distribution strategy:

The firm may follow concentrated distribution strategy, i.e

distribution of the product through specific dealers in a particular
market area. Distribution efforts are directed to satisfy market
segments.

b) Mass distribution strategy:

The firm may also follow mass distribution strategy i.e distribution
of the product through all the possible dealers over a large
market area, even at the national level.

However it makes sense to go for concentrated, distribution

strategy at the introduction stage.

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GROWTH STAGE
The growth stage is characterized by the entry of competitors, sales
grow, profits increase, and price and promotion may remain the same
or may change depending upon demand, competition and other market
forces.

During this stage, the firm may follow several strategies to sustain rapid
growth as long as possible.

1. Product strategies:

a) Product improvement:
The firm may undertake product improvement so as to face the
competition effectively. Product improvement can be in terms of
its features, packing, design, shape, quality, etc.

b) Introduction of new models:

The firm may introduce different models of the product, targeting
to different market segments. Each model may have different
brand name or there may be brand extension with certain
addition to the brand name, such as model number.

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2. Price and promotion strategy:

a) Penetration pricing:
The firm may reduce the price due to economic of large scale
production and distribution. The low pricing strategy is followed
so as to face the competition effectively. New entrants may find it
difficult to compete with low prices.

b) Push and pull promotion strategies:

The firm, may adopt push and pull promotion strategy. A push
promotion strategy requires trade promotion activities
(incentives) so as to induce dealers to stock and push the product
in the market.

A pull promotion strategy requires promotional efforts directed at

customers, such as various sales promotion schemes and
advertising so that the consumers demand the product from the
dealers.

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3. Distribution strategies:

a) New market segments:

The firm may look for new segments to increase the sales. For
instance, if the is directed mainly as young generation, the firm
may also direct it to order generation, as in the case of pepsi and
cadbury’s dairy milk.

b) Increase in distribution converge:

The firm may increase distribution coverage from local to regional
and from regional to national level. The increase in distribution
coverage will enable the firm to have rapid growth in its sales.

c) New distribution channels:

The firm may also introduce new distribution channels to increase
its sales. The firm may go for setting up chain stores or enter into
franchise agreements to increase the sales.

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MATURITY STAGE:
A majority of the products are in the maturity stage. At this stage, the
sales remain more or less the same. This stage normally lasts longer as
compared to the previous two stages, and marketers have to come up
with various strategies to stay in the market. The following are the
marketing strategies at maturity stage.

1. Product modification:
The marketers may place lot of emphases on product
improvement in respect of quality, features, design, etc. The
product modifications are intended to increase product’s
performance such as greater speed, longer durability, etc and to
generate enhanced customer satisfaction.

Therefore, the company has to place a lot of focus on Research &

Development for the purpose of product improvement.

2. Price and promotion strategies:

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The firm may follow the same (price and promotion) strategies as
followed during the growth stage, i.e

a) Penetration pricing:
The firm may reduce the price due to economies of large-scale
production and distribution. The low pricing strategy is followed
as to face the competition effectively. New entrants may find it
difficult to compete with low prices.

b) Push and pull promotion strategies:

The firm may adopt push and pull promotion strategy. A push
promotion strategy requires trade promotion activities
(incentives) so as to induce dealers to stock and push the
product in the market.

A pull promotion strategy requires promotional efforts directed

at customers, such as various sales promotion schemes, and
advertising so that the customers demand the product from
the dealers.

 The firm has to come up with innovative

promotion schemes such as:

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 Exchange offers, exchanging old products with a new one as in

the case of TVs, washing machines etc.

 Sales on installment facility at low or no interest charges.

 Extending warranty for longer period.

 Providing quick and efficient after-sale-services.

 Maintaining and enhancing customer and dealer relationship

through gift, contest, etc.

3. Distribution strategies:

a) Focus on profitable segments:

The marketers may concentrate on profitable market segment,
and may exit from unprofitable segments. This enables the firm
to reduce its overheads and increase the profits.

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b) Focus on improvement channels of distributions:

The firm may have to concentrate on important channels of
distributions and discard expensive or unprofitable channels of
distribution.This would enable the firm to maintain and enhance
good relation with important channels of distribution. This would
enable the firm to maintain and enhance good relation with
important channels of distribution.

c) Exit from un-profitable market areas:

The firm may also exit from unprofitable market areas and
concentrate on those market areas, which generate good sales
and profits.

DECLINE STAGE

The decline stage is characterized by decline in sales at low level, and

also profits decline considerably. The firm may follow the following
strategies at the decline stage:

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1. Product strategies :

a) Withdrawal of weaker brands:

The firm may withdraw weaker brands and concentrates on
selectively brands, which generate sales and profits.

b) Introduction of new product:

The firm may also introduce a new product, which has a good
potential in the market, and market it profitably.

c) Wait and watch strategy:

At times the firm may adopt a wait and watch policy. The firm
may not withdraw the weaker brand, but wait for other firms who
are facing the same problem of lower sales to withdraw the then
getting the bigger share of the market.

2. Price and promotion strategies :

The firm has to maintain the same price, as lowering the price
may not be feasible. The promotional expenditure may reduced
depending upon the availability of funds and market situation.

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3. Distribution strategies:
The firm may follow the distribution strategies:

 Continued focus on profitable segments.

 Emphasis on selective segments.

 Distributions through selective channels.

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PRODUCT LIFE CYCLE AS AN EFFECTIVE TOOL IN

MANAGING CUSTOMERS.

Customer’s experience with the company changes as the product

passes through its product life cycle; as such PLC can be effective tool
managing customers. When a product is moving through the various
phases of its life cycle, the customers of the product is also moving in a
certain path in relation to his experience of the product. Though this
change is represented by shifts in the nature of the demand in the PLC
stages it is essential for the marketing man to know what actually
happens to the consumers has some implication for the” company-
consumer relationship” and consequently, knowledge of this change
would help effective management of customers.

Buyers of various products, especially hi-tech products, evolve from

stage of inexperienced generalist to experienced specialist. As the
experience level of customer’s changes, the benefits they seek from
the company also keep changing. Companies who can sense and
anticipate this customer experience factor can be ready with suitable
strategies to keep the customers with them.

The seller of the product has to understand when and how a transition
is taking place in the experience level of the customer, as his product
moves along its life cycle. The changing expectations and the demands
of the customers can be handled through different strategy routes-
strengthening the company- customer relationship, augmenting the
product, improving service support or modifying the pricing
approaches.

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PRODUCT LIFE CYCLE OF MAGGI NOODLES:

INTRODUCTION:

Maggi noodles is a brand of instant noodles manufactured by Nestlé.

The brand is popular in India, South Africa, Brazil, Nepal, New Zealand,
Australia, Malaysia, Singapore, Sri Lanka , Bangladesh, Pakistan and the
Philippines; in several countries it is also known as "maggi mee" (mee is
Indonesian/Malaysian for noodles). Maggi noodles are part of the Maggi
family, a Nestlé brand of instant soups, stocks and noodles. In Malaysia,
there are fried noodles made from maggi noodles known as Maggi
goreng. Maggi noodles recently introduced a new variety of its noodles,
to cater for the health conscious like 'No MSG', 'Less Salt' and 'No Tran’s
fat'. Wholewheat flour based noodle variation marketed by the name
"Vegetable Atta Noodles" has been introduced in India (Atta flour is
used in preparing most forms of wheat based breads in India) and
caters to health conscious buyers wary of the refined flour used in the
regular Maggi noodles. This move helps the brand in India as suburban
mothers, who feed the noodles to children as an afterschool snack, are

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the primary customers of the brand. Recently a line of Rice noodles and
Whole wheat with pulses, carrots, beans and onions has also been
introduced in India. In fact, "Maggi" has become a genericized name for
instant noodles in India and Malaysia.

In mid 2008, New Zealand supermarkets introduced replacement

formulations for its Beef, Oriental and Curry flavours. A new feature is
an extra sachet containing dehydrated vegetables. Maggi claims the
new range contains 88% less total fat and 86% less saturated fat than
the average of top-three (unnamed) 2-minute-noodle competitors. The
new Maggi range also has considerably lower fat than its own previous
formulation. However, the salt content has been increased by 31
percent. Consumers have not reacted well to the new formulations,
complaining that they want the original chicken flavour back.

Preparation

Maggi noodles take around 2 minutes to cook, hence the name "2
minute noodles". The Maggi noodle cake and seasoning is added into
boiling water for two minutes and it is ready for consumption. Egg,
seaweed or lemon can also be added to the noodles for a better flavour.

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Flavours and Variety

Maggi Noodles are available in a large assortment of different flavours.

They are:

• Original Flavour
• Chicken
• Curry (a healthier alternative is also sold in supermarkets)
• Kari Letup (Extremely Spicy Curry) in Malaysia
• Laksa Lemak (discontinued)
• Tom yam
• Chicken & Corn
• Beef
• Oriental
• Masala
• Prawn
• Dal Sambar (whole wheat noodles)
• Asam Laksa
• Cheese
• Pizza (only in Saudi Arabia, was available for a period of time in
Australia)
• Sup Tulang (bone soup) (in Malaysia)
• Chatpata
• Tomato
• Stronger Chicken
• Vegetable Atta Noodles (whole wheat noodles) mostly in India
• Shahi Pulao (rice noodles)
• Chilly Chow (rice noodles).

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ISSUES
• Different phase’s product life cycle of maggi.

• Why Atta noodle was a failure?

• Strategies taken to establish new product category

• What measures NIL should take to sustain the image of a popular

brand image.

• Stage at which maggi is in the product life cycle.

Introductory Stage
• High failure rates

• No competition

• Frequent product modification

• Limited distribution

• High marketing and production costs

• Promotion focuses on awareness and information

Nestlé India Ltd. (NIL), the Indian subsidiary of the global FMCG major,
Nestlé SA, introduced the Maggi brand in India in 1982, with its launch
of Maggi 2 Minute Noodles, an instant noodles product.With the launch
of Maggi noodles, NIL created an entirely new food category - instant
noodles - in the Indian packaged food market. Because of its first-mover
advantage, NIL successfully managed to retain its leadership in the
instant noodles category.

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Market Penetration
• Promotional campaigns in school.

• Advertising strategies: - focusing on kids.

• New product innovation according to the need of consumers:

– Veg. Atta Noodles.

– DalAtta Noodles.

– Cuppa Mania.

• Availability in different packages:

– 50 Gms.

– 100 Gms.

Growth Stage
• Increasing rate of sales

• Entrance of competitors

• Initial healthy profits

• Promotion emphasizes brand ads

• Prices normally fall

• Development costs are recovered

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• 10 yrs back it enjoyed around 50% market share in this segment

which was valued at around 250 crores.

• During the 1990s, the sales of Maggi noodles declined, due to

growing popularity of Top Ramen, another instant noodles product.

• 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 .

Maturity Stage:
Many consumer products are in 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 Snax, was priced
aggressively at Rs 5 and had four variants: two chicken options and two
vegetarian.

• Like Maggi, Soupy Snax will be an in-between-meals snack and will

be targeted at all age groups, particularly office-goers.

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STPD Analysis
Segmentation to Differentiation:

• Classic Noodles – (5 – 10 yrs).

• Veg. Atta Noodles – Health Conscious.

• Rice Mania – Teenage

• Cuppa Mania – Office goers,

Decline Stage if no product innovation brought:

Rate of decline depends on change in tastes or

adoption of substitute products
• Long-run drop in sales

• Large inventories of unsold items

• Elimination of all nonessential marketing expenses.

Extending the PLC

• Change product

• Change product use

• Change product image

• Change product positioning.

Analysis (why Atta Noodles Failed?)

• In 2005 Nestlé India launched MAGGI Vegetable Atta Noodles.

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• Based on consumer needs and evolving trends for more whole grain
based products.

• Extensive Research and Development expertise to develop Maggie

Vegetable Atta Noodles.

• Maggi Vegetable Atta Noodles will provide the dietary fiber of

whole wheat to facilitate good.

FAILURE CAUSES
1. Indian psyche- The basic problem the brand faced is the Indian
Psyche. Indian Palate is not too adventurous in terms of trying new
tastes. So a new product with a new taste that too from a different
culture will have difficulty in appealing to Indian market.

2. Price- The price of atta noodle was little more than maggi 2
minutes noodle

3. False claims- In October 2008, Nestle mistakenly aired an advert

that noodle "help to build strong muscles and bone". The British
Advertising Standards Authority said that it was a false claim.

4. Not purely vegetarian- Maggi Noodles also contains the additives

E150d and E627.E627 is partly prepared from fish,and is thus not
suitable for vegetarians.

5. Lack of essential nutrients- The new maggi atta noodles as can be

seen from the fig. lacked essential vitamins A, C,also the fat content
was more then carbohydrates

6. Targeted health conscious people.

Suggestive Promotional Strategies

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1. They should conduct test marketing before launching new product.

2. Focus on creating distinctive image, based on twin benefits of

“INSTANT” and “HEALTHY”.

3. Conduct promotional campaigns at schools in small towns with

population more than 10,000.

4. Strengthen the distribution channel of the rural areas within 100 KM

of all the metros.

Current Scenario of Maggi

Leading Brand in India as well as World.

Current Sales: Approx.

– 90000 boxes

– Rs. 4, 79, 49,000 in Mumbai

– 10, 00,000 boxes

– 55 cr. in India Reasonable competitive pricing.

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CONCLUSION

THE PRODUCT LIFE CYCLE CAN HELP THE ORGANIZATION TO

KNOW WHERE DOES IT STANDS & HOW ITS PRODUCT IS DOING
IN THE MARKET. AS PER THE RESULT THE ORGANIZATION CAN
GO FOR ADOPTING DIFFERENT MARKETING STRATEGIES, WHICH
WILL HELP TO INCREASE THE SALES, EARN MORE PROFITS &
FACE THE COMPETITION.

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BIBLIOGRAPHY

Books referred:

Marketing Management

Productivity Quality Mgmt.

Information has been collected from the below websites:

www.en.wikipedia.org

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www.maggi.com.my/en/home.htm

www.managementparadise.com

www.google.co.in

www.indianmba.com

www.ask.com

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