PRODUCT LIFE CYCLE

BY- TAMANA GUPTA 2012MBE17

WHAT IS PRODUCT?
Any offering to a market for possible purchase and use. Tangible in nature. It includes not only physical objects but also services.

PRODUCT LIFE CYCLE

Alternating period of expansion and contraction of product.

INTRODUCTION STAGE
Sales
Costs Profits
Marketing Objectives
Low sales
High cost per customer Negative Create product awareness and trial

Product
Price Distribution Advertising

Offer a basic product

Use cost-plus Build selective distribution

Build product awareness among early adopters and dealers

GROWTH STAGE
Sales
Costs Profits
Marketing Objectives
Rapidly rising sales
Average cost per customer Rising profits Maximize market share Offer product extensions, service, warranty Price to penetrate market

Product
Price

Distribution
Advertising

Build intensive distribution Build awareness and interest in the mass market

MATURITY STAGE
Sales Costs
Peak sales Low cost per customer

Profits
Marketing Objectives

High profits
Maximize profit while defending market share Diversify brand and models

Product

Price
Distribution Advertising

Price to match or best competitors

Build more intensive distribution Stress brand differences and benefits

DECLINE STAGE
Sales Costs Profits
Marketing Objectives
Declining sales Low cost per customer Declining profits Reduce expenditure and milk the brand Phase out weak items Cut price Go selective: phase out unprofitable outlets Reduce to level needed to retain hard-core loyal customers

Product Price

Distribution Advertising

ITC

Leader of Indian cigarette industry. Sales turnover Rs 20,000 crore. Holds more than 75 per cent of the cigarette market. Out of 150 brands available, nearly 40 brands come from ITC. Scissors is the oldest and the milch cow in terms of income and profit.

STORY OF SCISSORS

INTRODUCTION STAGE OF SCISSORS

Introduction Stage Launched in 1912. A new product in market. Launching a new smoking habit for Indians. Prices were kept low. Promotion & distribution accounted for the bulk of ITCs expenditure.

GROWTH STAGE OF SCISSORS

Growth Stage During 1920s, 30s & 40s sales climbed . Non cigarette Smokers shifting to Cigarettes. Low price strategy used for market penetration. Increased the price in small dose to earn profit. NTC introduced Panama as competitor brand.

MATURITY STAGE
Maturity stage Panama emerged as a competent product posed a challenge to Scissors. Panama offered new flavour and provided a modern soft-cup pack design. The advertising and promotion of scissors became outdated and lacked a distinctive position. Panama was slow in growth initially but through aggressive marketing strategy and sustained market inputs, it started growing in the early 1950s

DECLINE STAGE
Decline Stage Sales reduced from 234 million sticks in 1948-49 to 193 million sticks in 1952-53. Sales declined to 6.5% by 1961-62. Price was decreased by reducing cost through cheaper tobacco and reduced length of stick-spoiled the entire brand image. ITC revamped the 3 decades advertising campaign. Brought price parity with Panama. ITC implemented several sales promotion. But it had little effect on consumers . Reduced the expense on promotion & advertising. Introduction of New Pack

TRADITIONAL AD

CONCLUSION
Had a poor image rating Was smoked by hardcore smokers Was not attracting new smokers Had a blue collar smokers profile Had an older, less educated, less affuent smokers profile Pack was outdated/traditional Advertising had no distinctive position; it was bland; advertising had poor recall; failed to interest consumers Promotions were oriented towards the trade Promotions did not ensure smokers participation Promotions were not new-creating. Product suffered from quality complaints

REFERENCES
Marketing Management, Global Perspective Indian Context 4th Edition, By V S Ramaswamy, S Namakumari, accessed on 21 january, 2013 Marketing Management Cases And Concepts, By Dholakia, Khurana, Bhandari, Jain, accessed on 20 january, 2013, 21 january, 2013 Marketing Management, 13th Edition, By Philip Kotler, Kevin Lane Keller, Abraham Koshy, Mithileshwar Jha accessed on 22 January, 2013 ITC Limited - Wikipedia, the free encyclopedia en.wikipedia.org/wiki/ITC_Limited, accessed on 22 january, 2013, 23 january, 2013 ITCHistory | ITC Ltd Company History & Profile economictimes.indiatimes.com ... Stocks Stock Quotes ITC Ltd., accessed on23 january, 2013 www.studymode.com ... Marketing & Advertising, accessed on 23 january, 2013

THANK YOU!