SEP 29, 2010

Product Life Cycle (PLC): Marketing Strategies for each stage

The typical product life cycle has five stages named as Product development, Introduction, Growth, Maturity and Decline. This concept of PLC is only applicable to products falls in the category of fast moving consumer goods on a large scale. Not all products follow this cycle like Fads, Style, and Fashion. Product Development: It begins when company develops a new product development idea. Other conditions included when product sales become going towards zero, Investment costs inclined towards high on graph or when profits become start displaying on negative on measuring. Second comes Introduction stage, in this usually sales are in low category, high cost per customer acquired, negative profits, Innovators are targeted, and a little competition exist in market. At this stage product usually consist of only some basic features, price should set as cost plus some basis to generate initial sales, and build selective distribution. As far as advertising is concerned create awareness among early adapters and resellers/dealers. While in sales promotion one should focus on heavy expenditures on creating big product trials in the market. Growth stage brings changing scenario like rapid rise in product sales, average cost per customer, profits start rising as well, early adapters are targeted, and with all these factors competition going to start as a strong one unlike previous stages. In this stage marketing efforts could be as offering of product extension and service and warranties. Price should be focus on market penetration. Distribution at this level could be intensive and awareness will be more towards masses. At this stage as consumers increase and product demand exist in the market thus reduce the expenditure on sales promotions.

Maturity is just like spring season which comes along with it peak sales, very low cost per customer, high profits, product starts to touch middle majority customer as target, and on product good will and awareness it is start diminishing competition. All these happens just in action due to implementation of diversification in brands and models, price should set to match the heavy competition, even more intensive distribution is suitable for the product, in advertising there arrive a need to stress out the emphasize on the product benefits all core, functional and augmented along with unique selling prepositions. Sales promotion should focus on to increase in brand switching. Everything when it starts would be possibly with lapse of time towards the end to its decline stage. It shows decline in sales and profits, low cost per customer, Laggards are targeted, and also in competition decline exist. At this stage a marketer should focus on phase out weakest items, cut price by displaying discount usually by percentages, again selective distribution with an aim to phase out unprofitable outlets, advertising should reduce to a needed level only for loyal customers, sales promotions should be reduce to minimal level

MARKETING MIX

Marketing Mix is defined as a set of controllable tactical marketing tools that firm blends to produce the response it wants in the target market. The marketing mix consists of every thing the firm can do to influence the demand for its products. The many possibilities can be collected into four groups of variables known as the four P's that are as follows:

1- PRODUCT:
Product stands for goods and services that the company offers to target market. Nestl kit Kat is in four sizes including K.K Chunky, while Polo is in three sizes.

The shape and the color of the Kit Kat and Polo are quite attractive for the customers. The labeling, packaging of the Kit Kat and Polo includes the Nestl brand and logo. The packaging includes an expiry date and time along with a manufacture date. Second part of labeling includes the quantity of product in grams along with ingredients and contents of chocolates and candies.

NESTLE EVERYDAY
To target the massive potential offered by the tea-whitening segment, NESTLE EVERYDAY tea whitener was launched in 1992. Supported by aggressive marketing using multi-media activities, focused distribution with sampling drives and excellent consumer acceptance, the brand has shown strong growth and holds good promise for the future.

2- PRICE:
The amount of money charged for a product or service, or sums of the values that consumers exchange for the benefits of having or using the product or services. The price of Nestl Kit Kat and Polo varies increases with the increase in its size.

3- PLACING:
Placing stands for company's activities that make the product available to the target consumer. Nestl' distribution is using the direct distribution channel to supply confectionary products weekly to the retailers.

4- PROMOTION:
Producing a quality product, pricing it attractively and making it available for the target consumer is not the only problem companies need to solve. Modern era is the era of communication with customer, assuring customer satisfaction, demands for personal and non-personal communication with the target customer to build a relationship with them. In an area-storming activity, giving out products free, gift hampers, attracts new customers; kites depending on the season (for existing

and potential customers) are given. The basic purpose is to explore the area that is being unexposed and to bring awareness in the people. STP

MARKET SEGMENTATION:
through many small improvements as well as through major breakthroughs that we will achieve excellence. To occupy a clear distinctive & desirable place related to competing mineral water in the minds of the target customers Nestle Pure Life segments its market on two bases:

Geographic segmentation Demographic segmentation

GEOGRAPHICAL SEGMENTATION:
The Company segments its market geographically on divisional basis. They divide each division in different zones and every distributor is restricted to sale its products only inhis own zone. E.g. Lahore is divided into five zones like East, West, South, North, and South west.

DEMOGRAPHICAL FACTOR:
If we look nestle pure life's demographic segmentation than we will find that our product is for every one. People from any area, any culture, any age, any sex, any belief and any income will drink water. It is not any luxury item which is used by a specific people.

TARGETING
A specific demographic target market was not chosen for Nestle Pure Life; instead the goal was to develop a product to be used by consumers of all ages from infants to seniors. It was intended as a family product especially for families living in large, polluted urban agglomerations that experience increasing difficulties finding safe, healthy drinking water. In fact, Nestle Pure Life's 0.5 L bottle is targeting to be also an alternative to soft drinks. Basically the target market of nestle water is those areas where the consumers having more awareness about pure life. As the people in villages having less information about Nestle Pure Life. So targeting marketing depends on the awareness of the consumers. SELETING TARGET MARKET Target Market Strategies Undifferentiated mass market.

Differentiated Segmented Marketing Concentrate Marketing. Micro marketing or Individual Marketing.