Product Life Cycle- a lesson

Q: What is product line?

Ans: A product line is a group of products that are closely related in terms of functional benefit, the same customer group, price range or marketing through same outlet.

Like In detergent the P&G Has Tide, Joy, Gain, Bold and other products having same functional benefit of washing cloths to the consumers.

A line can comprise related products of various sizes, types, colors, qualities, or prices.

Q: What is Product Mix?

Ans: A product mix is the set of all product lines and items that a particular seller offers for sale to buyers.

Like A seller has Three major product lines namely cosmetics, jewelry and household.

Where Cosmetics beaks down into lipstick, rouge, powder, facial cream etc.

Q: What is the depth of product line?

Ans: The depth of product linerefers to the number of product variants in a line. . If a line of products is sold with the same brand name, this is referred to as family branding. Like the depth of Colgate Dental Cream includes Colgate fresh energy gel, Colgate Herbal, Colgate Active Salt, Cibaca etc.

Line consistency refers to how closely related the products are in end use, production requirement, distribution channels etc. that make up the line are like Tube lights, Cables, Generators, Switches and gears, Plugs, bulbs etc.

Q: What is the width of product mix?

Ans:The number of different product lines sold by a company is referred to as width of product mix. like P&G Produces many product lines- Hair care products, Health care Products, personal hygiene products, beverages, food and so on.

Q: What is Line Extension?

Ans: When the seller adds a new product to a line, it is referred to as a line extension. Like the Reliance ADAG added new product line of personal loan to its existing marketing mix.

Q: Describe the Product line Decisions?

Ans: Under the Product line Decisions we follow Product line analysis, Product line length, Line modernization Decisions, Line pruning decisions.

Let us discuss in detail.

Product line Analysis is basically the comparison of product line , sale and profit with that of competitors :

1. Product line sales and profits- The product line manager learns about the percentage of total sale and profit contributed by each item in the product line. this enables the product line manager to decide upon the marketing strategy to undertake.

B) Product line market Profile: In this the product line manager analyses that who the product line is positioned against the competitor’s product lines . Like the Colgate launched Cibaca against HLL’s Aim.

.

Product line Length: The issue in Product line Length is to have optimal length of the product line. it is influenced by

1. Company objectives
2. Manufacturing capacity

It deals with Two major kinds of decisions:

a ) Line stretching Decisions b) Line filling Decisions.

a ) Line stretching Decisions: Line stretching occurs when a company lengthens its product line beyond its current range. it is stretched downward, upward, or both ways.

b) Line filling Decisions: When new product id added to the existing line for gaining incremental profit, competitiveness, and market share is called Line filling Decisions.

Line modernization Decisions- in some cases product line length is adequate but needed to be modernized to be competitive and refreshing. Like Apple personal Computers experienced Apple 1, Apple 2, Apple 3, Lisa and McIntosh.

Line Pruning Decisions: Usually Product or model numbers are palyed with for several reasons called Line Pruning Decisions

Q: Explain the concept of product Life Cycle?

Ans: the PLC is an important concept in marketing that provides insights into product’s competitive dynamics.

Product life cycle (PLC) has to do with the life of a product in the market with respect to business costs and sales variables, whereas product life cycle management (PLM) has more to do with managing a product through its development and useful life.

To say that a product has a life cycle is to assert four things:

1) Products have a limited life,

2) Product sales pass through distinct stages, each posing different challenges, opportunities, and problems to the seller,

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

4) Products require different marketing, financial, manufacturing, purchasing, and human resource strategies in each life cycle stage.

Let us discuss the different stages in product life cycle.

1. Introduction stage: In this stage a product is launched in the market. The marketer has to make effort for
   1. Creating product awareness in the market if it is leader
   2. Induce trial of the product
   3. Secure space in the outlet shelf.

Where,

I: costs are high.

II: low sales volume

III: little or no competition

IV: no existing demand for the product

V: makes no money at this stage

The marketing Strategy used are Rapid Skimming strategy, Slow skimming strategy, Rapid penetration strategy and slow penetration strategy. The Aircel is at its introduction stage with Rapid penetration strategy.

Usually market pioneer enjoys advantages.

2. Growth stage: This stage experiences rapid increase in sales volume where competition begins to increase, opportunity for large scale production and profit.

Where,

1) public awareness increases

2) Increased competition leads to price decreases

The marketing strategy used is;

1) Product improvement 2) new models are developed 3) enters new market segment 4) enlarges distribution channels etc. The social networking facilities on internet is on its growth stage.

3. Maturity stage

Most of the products are in maturity stage. In this stage

I: the marginal Costs are low as a result of production in scale

II: sales volume peaks and most of the market is covered.

III: There is increase in competitors entering the market

IV: prices fall due to impact of competing products

V: brand differentiation and feature diversification is emphasized to maintain or increase market share

The marketer adopts the followings.

Market Modification: 1) Convert nonusers 2) Enter new market segments 3) win Competitor’s customers etc.

Marketing mix modifications in Prices, Distribution, Advertising, sales promotion, personal selling, services

Coca Cola and Pepsi are at Maturity stage.

4. Saturation and decline stage

In this stage the sales volume decline, price and profitability diminish.

The marketer develops concern for 1) Identifying Weak products and determining such marketing strategy so that it could be dropped profitably.

Maruti 800 is at decline stage.