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PRODUCT LIFE CYCLE
GROWTH STAGE
If the new product satisfies the market, it will enter a growth stage, in which sales will
start climbing quickly. The early adopters will continue to buy, and later buyers will start
following their lead, especially if they hear favorable word of mouth. Once the product
has been proven a success and customers begin asking for it, sales will increase further as
more retailers become interested in carrying it. The marketing team may expand the
distribution at this point.Profits increase during the growth stage, as promotion costs are
spread over a large volume and as unit manufacturing costs fall faster than the price
declines owing to the producer learning effect. Firms have to watch for a change from an
accelerating to decelerating rate of growth in order to prepare new strategies. Attracted by
the opportunities for profit, new competitors will enter the market. They will introduce
new product features, and the market will expand. The increase in competitors leads to an
increase in the number of distribution outlets, and the sales jump just to build reseller
inventories. Prices remain where they are or fall only slightly. Companies keep their
promotion spending at the same or a slightly higher level. Educating the market remains a
goal, but now the company must also meet the competition. The firm uses several
strategies to sustain rapid market growth as long as possible.
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It improves the product quality and adds new product features and improved styling.
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It enter new segments
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It lowers prices to attract the next layer of price sensitive buyers
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It shifts from product awareness advertising to product preference advertising.
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It adds new models and flanker products (i.e., products of different sizes, flavors, and so
forth that protect the main product.In the growth stage, the firm faces a trade-off between
high market share and high current profit. By spending a lot of money on product
improvement, promotion, and distribution, the company can capture a dominant position.
In doing so, however, it gives up maximum current profit, which hopes to make up in the
next stage.During the growth stage, the goal is to gain consumer preference and increase
sales. In short, the marketing mix may be modified as follows:
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Product
- New product features and packaging options; improvement of product quality.
•
Price
- Maintained at a high level if demand is high, or reduced to capture additional
customers.
•
Distribution
- Distribution becomes more intensive. Trade discounts are minimal if resellers show a
strong interest in the product.
•
Promotion
- Promotion expenditure are at high level.
•
Advertising-
Increased advertising to build brand preference
MATURITY STAGE
The maturity stage is the most profitable. 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.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.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
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It can launch a better advertising campaign or use aggressive sales promotions___trade
deals, cents-off, premiums, and contests.
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The company can also move into larger market channels, using mass merchandisers.
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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.
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It might improve the product’s quality and performance ____its durability, reliability,
speed, or taste.
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It might add new features that expand the product’s usefulness, safety, or convenience.
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Finally the company can improve the product’s styling and attractiveness.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 userIt can try to expand the number of brand users:
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By converting non users
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By entering into new segments
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By winning competitors customers.Volume can also be increased by convincing the
current customers to increase their brand usage:
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Use the product on more occasions.
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Use more of the product on each occasion.
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Use the product in new ways.During the maturity stage, the primary goal is to maintain
market share and extend the product life cycle. In short, marketing mix decisions may
include:
•
Product
- Modifications are made and features are added in order to differentiate the product
from competing products that may have been introduced.]
•
Price
- Possible price reductions in response to competition while avoiding a price war.
•
Distribution
- New distribution channels and incentives to resellers in order to avoid losing shelf
space.
•
Promotion
- Emphasis on differentiation and building of brand loyalty. Incentives to get
competitors' customers to switch.
DECLINE STAGE
The sales of most product forms and brands eventually dip. The decline may be slow or
may plunge to zero or they may drop a low level where they continue for many
years.Sales decline for many reasons, including technological advance, shifts in
consumer tastes, and increased in competition.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.Management may decide to reposition or reformulate
the brand in hopes of moving it back into the growth stage of the product life
cycle.Management may decide to harvest the product, which means educing various costs
(plant and equipment, maintenance, R&D, advertising, sales force) and hoping that sales
holdup. If successful harvesting will increase the company’s profits in the short run.Or
management may decide to drop the product from the line. It can sell it to another firm or
simply liquidate it at salvage value.In a study of company strategies in declining
industries, Kathryn Harrigan identified five decline strategies available to the firm:
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Increasing the firm’s investment (to dominate the market or strengthen its competitive
position).
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Maintaining the firm’s investment level until the uncertainties about the industries are
revolved.
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Decreasing the firm’s investment level selectively, by dropping unprofitable customer
groups, while simultaneously strengthening the firm’s investment to recover cash
quickly.
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Harvesting (“milking”) the firm’s investment to recover cash quickly.
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Divesting the business quickly by disposing of its assets as advantageously as possible
PLC OF MOBILINK
INTRODUCTON TO MOBILINK
Mobilink business
Pakistan Mobile Communications Limited, better known as Mobilink GSM, is a
telecommunication service provider in Pakistan. Mobilink is a private limited company.
It started operations in 1994 as the first GSM cellular Mobile service in Pakistan by
MOTOROLA Inc., later it was sold to ORASCOM, an Egypt-based multi-national
company. Mobilink was awarded the license to operate in Azad Jammu and Kashmir
(AJK) on 27 June-2006. The concession was awarded for a payment of US$ 10 million
[1]. Mobilink’s competitive advantage has been its aggressive retail presence.
Mobilink products
Mobilink’s products include postpaid INDIGO, prepaid JAZZ. Mobilink’s competitive
advantage has been its aggressive retail presence. Mobilink’s prepaid product sold under
the brand Name Jazz is widely available in more than 5000+ cities, towns and villages
with service code (0300,0301,0302,0306,0307 and 0308) (a detailed list of the locations
is available on the corporate website). Jazz is the most successful and popular Pakistani
brand '. Mobilink another brand INDIGO is also having good recognition in the market.
Mobilink slogan
The Mobilink slogan is reshaping lives (But in TV commercials, (Urdu) HUM BOLAN
MUHABAT KI ZABAN, (English) we speak the language of lov