Forget the Product

Life Cycle Concept!

Group 8
Santosh Bhagat
PGP05012
Budumajji Padmalatha
PGP05013
Naveen Gupta
PGP05031

CRUX OF THE CASE

PRODUCT LIFE CYCLE IS NOT AN
INEVETIBLE, PREDETERMINED TRUTH
It is not predictive
It can be altered by marketing efforts
It should not be used blindly for decision making

Traditional PLC
The stages through which the individual
products develop over a period of time is
known as Product Life Cycle

Myths of Class and Form

As for product form, it tends to exhibit less
stability than does product class.
Form is what most PLC advocates have in mind when they speak of a
generalized life cycle pattern for a product
Theoretically, it presumes the existence of some rules indicating the
movement of the product from one stage to another
However, when one studies actual case histories, it becomes clear that
no such rules can be objectively developed

Unpredictable Variations

Effects

Introduction Growth

Maturity

Decline

Competition

Not important Few

emulators

Many rivals

Very Few

Strategy

Market Estb.,
persuade
early
adopters

Market
penetration,
target mass

Defending
brand
position

Phasing out
strategy

Profits

Negligible

Peak Level

Reduced

Negligible

Prices

High

High

Avoid price
wars

Low

Distribution

Selective

Intensive

Intensive

Selective

Advertising
strategy

Focus on
Early
adopters

Awareness for Use for

Focus on low
mass market differentiation price

Advertising

High (for

Moderate (for

Moderate

Minimum

No lifecycle for brands

When it comes to brands, the PLC model has even less validity
Many potentially useful offerings die in the introductory stage
because of inadequate product development or unwise market
planning, or both
PLC is a dependent variable which is determined by marketing
actions; it is not an independent variable to which companies
should adapt their marketing programs.
Marketing management itself can alter the shape and duration of
a brands life cycle
When a brand passes over the hill in sales, no marketing
strategies are effective anymore. Such a drop may be due to
changes in consumer tastes and values, or to the fact that users
have shifted their preference to a new and improved competitive
product

 Exception of non filter

cigarettes, brands tend
to have different sales
patterns, and the
product-form curves
throw no light on what
the sales would be in the
future.
All that can be said is
that if a product form
(e.g., nonfilter cigarettes)
is truly in a final
declining stage, it is very
difficult for a brand (e.g.,
Chesterfield) to reverse
the trend.
However, with respect to
the first three stages of

 Panic increases as management believes brand is in declining

stage
New
products
launched
Fund is withdrawn from promotion budget and allocated to R & D
without plan
in new items.
New products are launched without proper testing.
Most of the times, they fail due to low promotion budget and
poor planning.
For e.g. tooth paste IPANA
Not due to irreversible changes in consumer tastes
But when management takes decision on the basis of PLC theory
Management feels that brand has entered declining stage due to
few bad years because of poor marketing or other factors.

When brand is
discontinued

Blunders with PLC

 Therefore, companies can use other models which take inputs

like:
Attitudes, perception, brand image etc.
Further, analysis of competitive brands shows that one went up
while the other went down. If PLC holds, both should fall.
Other examples are: budweiser beer, colgate , seven up (uncola
marketing), listerine antiseptic.
Because of imaginative marketing strategies , Dupont nylon
could sustain the declining sales curve
PLC is dependent varaible on various marketing efforts and not
an independent variable.

Planning without PLC

Should resources be diverted

to new products?
Since products do not necessarily follow PLC, undue
attention on new product development is perilous
Instead, focus on todays products to leverage the
built goodwill.
Avoid fragmenting the market with new product
introductions

Effective System
Analyze positioning and foresee opportunities
Getting Started:
Segment the market: Identify the untapped segments
Market Research: To find consumer perception and how
it may vary across segments
New marketing campaign for the target market

Observed Issue: Decline in sales

Cause of
decline

Traditional PLC
approach: How to
phase out the
product?

Macroeconomic
factors
Change in
consumer
preferences
Operational
issues
Brand Image and
perception

Irreversib
le
Negative
Change

Phase out the brand

and embark upon
other profitable
ventures
Modern approach:
What is causing the
decline? (market
research)

McKenzies Support for PLC

According to McKenzie, PLC is greatly predictive:
Initiation ends with the entry of a significant new
competitor
Growth ends by the entry of a cluster of new
competitors
Decline is heralded by overall decline in market size
However, largely depends on managements
experience and understanding of the market place

The Solution
Marketing communications model
(Suggested in case)

Attitude = f(Ad expense, WoM, Brand Share (t-1))

Intention to Buy = f(Attitude, price perception)
New Brand share = Intention to buy(t-1), Price Index,
Ad expense of competition)

Changing marketing communications

Repositioning
Integrated marketing communication

Discern the brand image

Perceptual Mapping

Learnings
PLC is an indicative tool, not to be used blindly for decision
making
The phases cannot be decided based on short term changes
The shape and length of each phase can be altered by
marketing efforts
A decline in product class itself is a signal to phase out