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Case-4 : Extending the product life cycle


Introduction
Businesses need to set themselves clear aims and objectives if they are going to succeed. The Kellogg Company is the world's leading producer of breakfast cereals and convenience foods, such as cereal bars, and aims to maintain that position. In 2006, Kellogg had total worldwide sales of almost $11 billion (£5.5 billion). In 2007, it was Britain's biggest selling grocery brand, with sales of more than £550 million. Product lines include ready-to-eat cereals (i.e. not hot cereals like porridge) and nutritious snacks, such as cereal bars. Kellogg's brands are household names around the world and include Rice Krispies, Special K and Nutri-Grain, whilst some of its brand characters, like Snap, Crackle and Pop, are amongst the most wellknown in the world.
Kellogg has achieved this position, not only through great brands and great brand value, but through a strong commitment to corporate social responsibility. This means that all of Kellogg's business aims are set within a particular context or set of ideals. Central to this is Kellogg's passion for the business, the brands and the food, demonstrated through the promotion of healthy living.
The company divides its market into six key segments. Kellogg's Corn Flakes has been on breakfast tables for over 100 years and represents the 'Tasty Start' cereals that people eat to start their day. Other segments include 'Simply Wholesome' products that are good for you, such as Kashi Muesli, 'Shape Management' products, such as Special K and 'Inner Health' lines, such as All-Bran. Children will be most familiar with the 'Kid Preferred' brands, such as Frosties, whilst 'Mum Approved' brands like Raisin Wheats are recognised by parents as being good for their children.
Each brand has to hold its own in a competitive market. Brand managers monitor the success of brands in terms of market share, growth and performance against the competition. Key decisions have to be made about the future of any brand that is not succeeding. This case study is about Nutri-Grain. It shows how Kellogg recognised there was a problem with the brand and used business tools to reach a solution. The overall aim was to re-launch the brand and return it to growth in its market.
The product life cycle
Each product has its own life cycle. It will be 'born', it will 'develop', it will 'grow old' and, eventually, it will 'die'. Some products, like Kellogg's Corn Flakes, have retained their market position for a long time. Others may have their success undermined by falling market share or by competitors. The product life cycle shows how sales of a product change over time. The five typical stages of the life cycle are shown on a graph. However, perhaps the most important stage of a product life cycle happens before this graph starts, namely the
Research and Development (R&D) stage. Here the company designs a product to meet a need in the market. The costs of market research - to identify a gap in the market and of product development to ensure that the product meets the needs of that gap - are called 'sunk' or start-up costs. Nutri-Grain was originally designed to meet the needs of busy people who had missed breakfast. It aimed to provide a healthy cereal breakfast in a portable and convenient format.
1.   Launch - Many products do well when they are first brought out and Nutri-Grain was no exception. From launch (the first stage on the diagram) in 1997 it was immediately successful, gaining almost 50% share of the growing cereal bar market in just two years.
2.   Growth - Nutri-Grain's sales steadily increased as the product was promoted and became well known. It maintained growth in sales until 2002 through expanding the original product with new developments of flavour and format. This is good for the business, as it does not have to spend money on new machines or equipment for production. The market position of Nutri-Grain also subtly changed from a 'missed breakfast' product to an 'all-day' healthy snack.
3.   Maturity - Successful products attract other competitor businesses to start selling similar products. This indicates the third stage of the life cycle - maturity. This is the time of maximum profitability, when profits can be used to continue to build the brand. However, competitor brands from both Kellogg itself (e.g. All Bran bars) and other manufacturers (e.g. Alpen bars) offered the same benefits and this slowed down sales and chipped away at Nutri-Grain's market position. Kellogg continued to support the development of the brand but some products (such as Minis and Twists), struggled in a crowded market. Although Elevenses continued to succeed, this was not enough to offset the overall sales decline. Not all products follow these stages precisely and time periods for each stage will vary widely. Growth, for example, may take place over a few months or, as in the case of Nutri-Grain, over several years.
4.   Saturation - This is the fourth stage of the life cycle and the point when the market is 'full'. Most people have the product and there are other, better or cheaper competitor products. This is called market saturation and is when sales start to fall. By mid-2004 Nutri-Grain found its sales declining whilst the market continued to grow at a rate of 15%.

5. Decline - Clearly, at this point, Kellogg had to make a key business decision. Sales were falling, the product was in decline and losing its position. Should Kellogg let the product 'die', i.e. withdraw it from the market, or should it try to extend its life?
Strategic use of the product life cycle
When a company recognises that a product has gone into decline or is not performing as well as it should, it has to decide what to do. The decision needs to be made within the context of the overall aims of the business. Kellogg's aims included the development of great brands, great brand value and the promotion of healthy living. Strategically, Kellogg had a strong position in the market for both healthy foods and convenience foods. Nutri-Grain fitted well with its main aims and objectives and therefore was a product and a brand worth rescuing.
Kellogg decided to try to extend the life of the product rather than withdraw it from the market. This meant developing an extension strategy for the product. Ansoff s matrix is a tool that helps analyse which strategy is appropriate. It shows both market-orientated and product-orientated possibilities.
Extending the Nutri-Grain cycle - identifying the problem
Kellogg had to decide whether the problem with Nutri-Grain was the market, the product or both. The market had grown by
over 15% and competitors' market share had increased whilst Nutri-Grain sales in 2003 had declined. The market in terms of
customer tastes had also changed - more people missed breakfast and therefore there was an increased need for such a snack
product.
The choice of extension strategy indicated by the matrix was either product development or diversification. Diversification carries much higher costs and risks. Kellogg decided that it needed to focus on changing the product to meet the changing market needs.
Research showed that there were several issues to address:
1.   The brand message was not strong enough in the face of competition. Consumers were not impressed enough by the product to choose it over competitors.
2.   Some of the other Kellogg products (e.g. Minis) had taken the focus away from the core business.
3.   The core products of Nutri-Grain Soft Bake and Elevenses between them represented over 80% of sales but received a small proportion of advertising and promotion budgets.
4.   Those sales that were taking place were being driven by promotional pricing (i.e discounted pricing) rather than the underlying strength of the brand.
Implementing the extension strategy for Nutri-Grain having recognised the problems, Kellogg then developed solutions to re-brand and re-launch the product in 2005.
1.   Fundamental to the re-launch was the renewal of the brand image. Kellogg looked at the core features that made the brand
different and modelled the new brand image on these. Nutri-Grain is unique as it is the only product of this kind that is
baked. This provided two benefits:
•   the healthy grains were soft rather than gritty
•   the eating experience is closer to the more indulgent foods that people could be eating (cakes and biscuits, for example). The unique selling point, hence the focus of the brand, needed to be the 'soft bake'.

2.   Researchers also found that a key part of the market was a group termed 'realistic snackers'. These are people who want to snack on healthy foods, but still crave a great tasting snack. The re-launched Nutri-Grain product needed to help this key group fulfil both of these desires.
3.   Kellogg decided to re-focus investment on the core products of Soft Bake Bars and Elevenses as these had maintained their growth (accounting for 61% of Soft Bake Bar sales). Three existing Soft Bake Bar products were improved, three new ranges introduced and poorly performing ranges (such as Minis) were withdrawn.
4.   New packaging was introduced to unify the brand image.
5.   An improved pricing structure for stores and supermarkets was developed. Using this information, the re-launch focused on the four parts of the marketing mix:

•   Product - improvements to the recipe and a wider range of flavours, repositioning the brand as 'healthy and tasty', not a substitute for a missed breakfast
•   Promotion - a new and clearer brand image to cover all the products in the range along with advertising and point-of-sale materials
•   Place - better offers and materials to stores that sold the product
•   Price - new price levels were agreed that did not rely on promotional pricing. This improved revenue for both Kellogg and the stores.
As a result Soft Bake Bar year-on-year sales went from a decline to substantial growth, with Elevenses sales increasing by almost 50%. The Nutri-Grain brand achieved a retail sales growth rate of almost three times that of the market and most importantly, growth was maintained after the initial re-launch.
Conclusion
Successful businesses use all the tools at their disposal to stay at theSuccessful businesses use all the tools at their disposal to stay at the top of their chosen market. Kellogg was able to use a number of business tools in order to successfully re-launch the Nutri-Grain brand. These tools included the product life cycle, Ansoff s matrix and the marketing mix. Such tools are useful when used properly.
Kellogg was able to see that although Nutri-Grain fitted its strategic profile - a healthy, convenient cereal product - it was underperforming in the market. This information was used, along with the aims and objectives of the business, to develop a strategy for continuing success. Finally, when Kellogg checked the growth of the re-launched product against its own objectives, it had met all its aims to:
•   re-position the brand through the use of the marketing mix
•   return the brand to growth
•   improve the frequency of purchase
•   introduce new customers to the brand.
Nutri-Grain remains a growing brand and product within the Kellogg product family.


Answer the following questions:
1.   Using current products familiar to you, draw and label a product life cycle diagram, showing which stage each product is at.
2.   Suggest appropriate aims and objectives for a small, medium and large business.
3.   Consider the decision taken by Kellogg to opt for product development. Suggest a way in which it could have diversified instead. Justify your answer.

Answer
Question:   Extending the product life cycle

Introduction

Businesses need to set themselves clear aims and objectives if they are going to succeed. The Kellogg Company is the world's leading producer of breakfast cereals and convenience foods, such as cereal bars, and aims to maintain that position. In 2006, Kellogg had total worldwide sales of almost $11 billion (£5.5 billion). In 2007, it was Britain's biggest selling grocery brand, with sales of more than £550 million. Product lines include ready-to-eat cereals (i.e. not hot cereals like porridge) and nutritious snacks, such as cereal bars. Kellogg's brands are household names around the world and include Rice Krispies, Special K and Nutri-Grain, whilst some of its brand characters, like Snap, Crackle and Pop, are amongst the most wellknown in the world.

Kellogg has achieved this position, not only through great brands and great brand value, but through a strong commitment to corporate social responsibility. This means that all of Kellogg's business aims are set within a particular context or set of ideals. Central to this is Kellogg's passion for the business, the brands and the food, demonstrated through the promotion of healthy living.

The company divides its market into six key segments. Kellogg's Corn Flakes has been on breakfast tables for over 100 years and represents the 'Tasty Start' cereals that people eat to start their day. Other segments include 'Simply Wholesome' products that are good for you, such as Kashi Muesli, 'Shape Management' products, such as Special K and 'Inner Health' lines, such as All-Bran. Children will be most familiar with the 'Kid Preferred' brands, such as Frosties, whilst 'Mum Approved' brands like Raisin Wheats are recognised by parents as being good for their children.

Each brand has to hold its own in a competitive market. Brand managers monitor the success of brands in terms of market share, growth and performance against the competition. Key decisions have to be made about the future of any brand that is not succeeding. This case study is about Nutri-Grain. It shows how Kellogg recognised there was a problem with the brand and used business tools to reach a solution. The overall aim was to re-launch the brand and return it to growth in its market.

The product life cycle

Each product has its own life cycle. It will be 'born', it will 'develop', it will 'grow old' and, eventually, it will 'die'. Some products, like Kellogg's Corn Flakes, have retained their market position for a long time. Others may have their success undermined by falling market share or by competitors. The product life cycle shows how sales of a product change over time. The five typical stages of the life cycle are shown on a graph. However, perhaps the most important stage of a product life cycle happens before this graph starts, namely the

Research and Development (R&D) stage. Here the company designs a product to meet a need in the market. The costs of market research - to identify a gap in the market and of product development to ensure that the product meets the needs of that gap - are called 'sunk' or start-up costs. Nutri-Grain was originally designed to meet the needs of busy people who had missed breakfast. It aimed to provide a healthy cereal breakfast in a portable and convenient format.

1.       Launch - Many products do well when they are first brought out and Nutri-Grain was no exception. From launch (the first stage on the diagram) in 1997 it was immediately successful, gaining almost 50% share of the growing cereal bar market in just two years.

2.       Growth - Nutri-Grain's sales steadily increased as the product was promoted and became well known. It maintained growth in sales until 2002 through expanding the original product with new developments of flavour and format. This is good for the business, as it does not have to spend money on new machines or equipment for production. The market position of Nutri-Grain also subtly changed from a 'missed breakfast' product to an 'all-day' healthy snack.

3.       Maturity - Successful products attract other competitor businesses to start selling similar products. This indicates the third stage of the life cycle - maturity. This is the time of maximum profitability, when profits can be used to continue to build the brand. However, competitor brands from both Kellogg itself (e.g. All Bran bars) and other manufacturers (e.g. Alpen bars) offered the same benefits and this slowed down sales and chipped away at Nutri-Grain's market position. Kellogg continued to support the development of the brand but some products (such as Minis and Twists), struggled in a crowded market. Although Elevenses continued to succeed, this was not enough to offset the overall sales decline. Not all products follow these stages precisely and time periods for each stage will vary widely. Growth, for example, may take place over a few months or, as in the case of Nutri-Grain, over several years.

4.       Saturation - This is the fourth stage of the life cycle and the point when the market is 'full'. Most people have the product and there are other, better or cheaper competitor products. This is called market saturation and is when sales start to fall. By mid-2004 Nutri-Grain found its sales declining whilst the market continued to grow at a rate of 15%.



5. Decline - Clearly, at this point, Kellogg had to make a key business decision. Sales were falling, the product was in decline and losing its position. Should Kellogg let the product 'die', i.e. withdraw it from the market, or should it try to extend its life?

Strategic use of the product life cycle

When a company recognises that a product has gone into decline or is not performing as well as it should, it has to decide what to do. The decision needs to be made within the context of the overall aims of the business. Kellogg's aims included the development of great brands, great brand value and the promotion of healthy living. Strategically, Kellogg had a strong position in the market for both healthy foods and convenience foods. Nutri-Grain fitted well with its main aims and objectives and therefore was a product and a brand worth rescuing.

Kellogg decided to try to extend the life of the product rather than withdraw it from the market. This meant developing an extension strategy for the product. Ansoff s matrix is a tool that helps analyse which strategy is appropriate. It shows both market-orientated and product-orientated possibilities.

Extending the Nutri-Grain cycle - identifying the problem

Kellogg had to decide whether the problem with Nutri-Grain was the market, the product or both. The market had grown by

over 15% and competitors' market share had increased whilst Nutri-Grain sales in 2003 had declined. The market in terms of

customer tastes had also changed - more people missed breakfast and therefore there was an increased need for such a snack

product.

The choice of extension strategy indicated by the matrix was either product development or diversification. Diversification carries much higher costs and risks. Kellogg decided that it needed to focus on changing the product to meet the changing market needs.

Research showed that there were several issues to address:

1.       The brand message was not strong enough in the face of competition. Consumers were not impressed enough by the product to choose it over competitors.

2.       Some of the other Kellogg products (e.g. Minis) had taken the focus away from the core business.

3.       The core products of Nutri-Grain Soft Bake and Elevenses between them represented over 80% of sales but received a small proportion of advertising and promotion budgets.

4.       Those sales that were taking place were being driven by promotional pricing (i.e discounted pricing) rather than the underlying strength of the brand.

Implementing the extension strategy for Nutri-Grain having recognised the problems, Kellogg then developed solutions to re-brand and re-launch the product in 2005.

1.  Fundamental to the re-launch was the renewal of the brand image. Kellogg looked at the core features that made the brand
different and modelled the new brand image on these. Nutri-Grain is unique as it is the only product of this kind that is
baked. This provided two benefits:

•  the healthy grains were soft rather than gritty

•  the eating experience is closer to the more indulgent foods that people could be eating (cakes and biscuits, for example). The unique selling point, hence the focus of the brand, needed to be the 'soft bake'.



2.      Researchers also found that a key part of the market was a group termed 'realistic snackers'. These are people who want to snack on healthy foods, but still crave a great tasting snack. The re-launched Nutri-Grain product needed to help this key group fulfil both of these desires.

3.      Kellogg decided to re-focus investment on the core products of Soft Bake Bars and Elevenses as these had maintained their growth (accounting for 61% of Soft Bake Bar sales). Three existing Soft Bake Bar products were improved, three new ranges introduced and poorly performing ranges (such as Minis) were withdrawn.

4.      New packaging was introduced to unify the brand image.

5.      An improved pricing structure for stores and supermarkets was developed. Using this information, the re-launch focused on the four parts of the marketing mix:



•  Product - improvements to the recipe and a wider range of flavours, repositioning the brand as 'healthy and tasty', not a substitute for a missed breakfast

•  Promotion - a new and clearer brand image to cover all the products in the range along with advertising and point-of-sale materials

•  Place - better offers and materials to stores that sold the product

•  Price - new price levels were agreed that did not rely on promotional pricing. This improved revenue for both Kellogg and the stores.



As a result Soft Bake Bar year-on-year sales went from a decline to substantial growth, with Elevenses sales increasing by almost 50%. The Nutri-Grain brand achieved a retail sales growth rate of almost three times that of the market and most importantly, growth was maintained after the initial re-launch.

Conclusion

Successful businesses use all the tools at their disposal to stay at theSuccessful businesses use all the tools at their disposal to stay at the top of their chosen market. Kellogg was able to use a number of business tools in order to successfully re-launch the Nutri-Grain brand. These tools included the product life cycle, Ansoff s matrix and the marketing mix. Such tools are useful when used properly.

Kellogg was able to see that although Nutri-Grain fitted its strategic profile - a healthy, convenient cereal product - it was underperforming in the market. This information was used, along with the aims and objectives of the business, to develop a strategy for continuing success. Finally, when Kellogg checked the growth of the re-launched product against its own objectives, it had met all its aims to:

•  re-position the brand through the use of the marketing mix

•  return the brand to growth

•  improve the frequency of purchase

•  introduce new customers to the brand.

Nutri-Grain remains a growing brand and product within the Kellogg product family.

Answer the following questions:

1.      Using current products familiar to you, draw and label a product life cycle diagram, showing which stage each product is at.



THE  PRODUCT  LIFE  CYCLE  PLAYS  A
SIGNIFICANT   ROLE  IN  THE  MANAGEMENT
OF   THE  PRODUCT/ PRODUCT  MARKETING.
THE  MARKETING  MANAGER  HAS  THE  RESPONSIBILITY  OF  MANAGING  THE  PRODUCT   IN  ALL  PHASES.

THE  MARKETING  MIX  CHANGES  BECAUSE  THE
-organizational   conditions  changes.
-environmental  conditions  changes
WHICH  FORCES
-the changes  in the  MARKETING EFFORTS.
WHICH   INCLUDES
P1=PRODUCTS
P2=PROMOTIONS
P3=PRICE
P4=PLACE
==================================

 
PRODUCT LIFE CYCLE

Products pass through a series of stages. Successful products progress through four basic stages: (1) Introduction; (2) Growth; (3) Maturity; and (4) Decline.

The product life cycle concept provides important insights about developments at the various stages of the product's life. Knowledge that profits assume a predictable pattern through the stages and that promotional emphasis should shift from product information in the early stages to product promotion in the later stages should allow the marketing manager to improve planning.

=======================================
PRODUCT LIFE CYCLE   BENEFITS


Here is a brief description of what is expected to take place in the stages of the life cycle:

1.   Initiation starts with the initial conception or discovery of the product idea and runs until it has been evaluated, has become specific, and has been approved for development.

2.   Development covers the various activities that transform an abstract product idea into a concrete prototype model of the product (if it is a tangible good) that can be manufactured.

3.   Market plans and tests is our term for the final gestation phase, in which the product would pass its last tests and everything be ready for commercialising it.

4.   Introduction starts when the offering is made available to buyers, probably on a limited scale, and continues as it is tried by innovators and experiences show slow sales growth.

5.   Growth begins when numerous tryers like the product, word of its virtues spread, and the product sales "take off". Since the product is not established until this takes place, we include it in this chapter of "evolving products6.   Maturity comes eventually, for the halcyon days of sharply rising demand vanish when most potential buyers have become actual customers. This may be a very long period during which demand decelerates and then reaches a plateau.

7.   Decline sets in persistently when the product eventually becomes obsolete. When it actually starts to toboggan, it is time to give the product a merciful death and burial.

The marketing strategist should never assume that the PLC operates inexorably, but should rather examine a brand's or product's actual position carefully. Further a serious effort should be made to find a winning strategy can revive a slumping demand, rather than summarily abandoning the possibility. In that context, the PLC does pose a hypothesis of product or brand behaviour that is useful for sales forecasting. It also enables us to clarify strategies in terms of their timeliness.

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WHY YOU  SHOULD USE THE  PRODUCT  LIFE   CYCLE  CURVE    
FOR ANALYSIS

The product life cycle curve can be extremely important in generating strategist, and it should be monitored and controlled by the marketing manager. This is necessary due primarily to five reasons:

1 . Rapid Maturity of Products
2. Life Cycle Product Mix
3. Strategic Implications
4. Product Planning
5. Changing the Life Cycle Curve

=============================================

THE PRODUCT LIFE CYCLE

Successful products progress through four basic stages: Introduction. Growth. Maturity and Decline. This progression is known as the Product Life Cycle.

1.INTRODUCTION

The company's objective in the early stages of the product life cycle is to stimulate demand for the new market entry. Since the product is not known to the public, promotional campaigns stress information about its features and benefits. They also may be directed toward marketing intermediaries in the channel to induce them to carry the product.

In this phase, the public becomes acquainted with the merits of the product and begins to accept it.

Losses are common during the introductory stage due to heavy promotion and extensive research and development expenditures.

However, the ground is being laid for future profits. Companies expect.to recover the costs and to begin earning profits when the new product moves into the second phase of its life cycle   the growth stage.


2.GROWTH

Sales volumes rise rapidly during the growth stage as new customers make initial purchases and early buyers re purchase the product. 'Word of mouthl and advertising induce hesitant buyers to make trial purchases.

As the company begins to realise substantial profits from its investment during the growth stage, the product attracts competitors.

Success breads imitation and other companies rush into the market with competitive products. The majority of firms in a particular market enter during the growth stage.


3.MATURITY

Industry sales continue to grow during the early part of the maturity stage, but eventually they reach a plateau as the backlog of potential customers is exhausted. By this time, a large number of competitors have entered the market, and profits decline as competition intensifies.

In the maturity stage, differences among competing products diminish as competitors discover the product and promotional characteristics most desired by the market. Heavy promotional outlays emphasise subtle differences among competing products, and brand competition intensifies.

In this stage, often available products exceed industry demand. Companies attempting to increase their sales and market share must do so at the expense of competitors.

As competition intensifies, the competitors tend to cut prices in an attempt to attract new buyers. Even though a price reduction may be the easiest method of inducing additional purchases, it is also one of the simplest moves for, competitors to duplicate.

Reduced prices result in decreased revenues for all firms in the industry unless the price cuts produce enough increased purchases to offset the loss in revenue on each item sold.

     
4.DECLINE

In the final stage of the product's life, innovations or customer preferences bring about an absolute decline in industry sales.

Sales and profits decline and companies begin to leave the industry in search of more profitable products.
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FOR    EFFECTIVE   MARKETING EFFORTS  YOU     WORK  WITH
PRODUCT LIFE CYCLE

A  VERY  GOOD  EXAMPLE  OF   AN  INNOVATIVE  PRODUCT  = COLGATE  SENSITIVE  TOOTHPASTE.


1.INTRODUCTION

**ORGANISATION CONDITIONS   

-High Costs

-Inefficient Production Levels

-Cash Demands  HIGH
------------------
**ENVIRONMENTAL CONDITIONS   

-Few or No Competitions

-Limited Product Awareness and Knowledge

-Limited Demand
--------------------------
**MARKETING EFFORTS   

-Stimulate Demand

-Establish High Price

-Offer Limited Product Variety

-Increase Distribution
------------------------------
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EXAMPLE  OF  MARKETING   PROGRAM   FOR
STAGES IN PRODUCT LIFE CYCLE


A.INTRODUCTION.

1.MARKETING  OBJECTIVE
-successful  entry in the market.

2.SALES
-increase sales.

3.CUSTOMERS
-identify  customer  segments

4.ENVIRONMENT
-Comply With  External Regulations   
& Accepted  Values

5.PRODUCT
-Assure High  Quality

6.PRICE
-use cost plus  strategy

7.PROMOTIONS
-build product awareness

8.DISTRIBUTION
-build  and  channels


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2.GROWTH

**ORGANISATIONAL CONDITIONS   

-Smoothing Production

-Lowering Costs

-Operation Efficiencies

-Product Improvement Work
----------------------------------
**ENVIRONMENTAL CONDITIONS   

-Expanding Markets

-Expanded Distribution

-Competition Strengthens

-Prices Soften a Bit
---------------------------------
**MARKETING EFFORTS   

-Cultivate Selective Demand

-Product Improvement

-Strengthen Distribution

-Price Flexibility
------------------------------------
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EXAMPLE  OF  MARKETING   PROGRAM   FOR
STAGES IN PRODUCT LIFE CYCLE

B. GROWTH.

1.MARKETING  OBJECTIVE
-gain market share
-increase  profitability

2.SALES
-increase / maximize  sales volume.

3.CUSTOMERS
-determine  customer  acceptance.

4.ENVIRONMENT
-determine  channel  responses.

5.PRODUCT
-offer  extensions or value added  like service.

6.PRICE
-penetrate  deeper into  the  market

7.PROMOTIONS
-induce trial.

8.DISTRIBUTION
-use selective  distribution
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3. MATURITY


**ORGANISATIONAL  CONDITIONS

A. EARLY  MATURITY      
  
-efficient scale of operation         
-production modification work
-LOW  profit      

B. LATE MATURITY

-product standardization
-Decreasing Profits
------------------------------
**ENVIRONMENTAL  CONDITIONS      
     
A. EARLY MATURITY      
     
-slowing growth      
-strong competition      
-expanded market      
-heightened competition   

B. LATE  MATURITY

-Faltering demand
-fierce  competition
-shrinking  number of  competitors
-established  distribution  pattern
-----------------------------------
**MARKETING EFFORTS

A.EARLY  MATURITY
  
-Emphasise Market Segmentation   
-Improve Service  and Warranty   
-Reduce Prices
  
B. LATE  MATURITY      

-ultimate  in  market segmentation
-competitive pricing
-retain distribution
--------------------------------
===================================

EXAMPLE  OF  MARKETING   PROGRAM   FOR
STAGES IN PRODUCT LIFE CYCLE

C.MATURITY.

1.MARKETING  OBJECTIVE
-consolidate  market share
-maximize  profit.

2.SALES
-maximize  sales.

3.CUSTOMERS
-determine  re-purchase  rates.

4.ENVIRONMENT
-monitor  competitive  activities

5.PRODUCT
-diversify  the  brands  or  models

6.PRICE
-price war with  competitors

7.PROMOTIONS
-stress  favourable  evaluations

8.DISTRIBUTION
-more intensive  distribution
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4.DECLINE

**ORGANISATION CONDITIONS

-Permanently Declining Demand
-------------------------------
**ENVIRONMENTAL CONDITIONS   

-Reduction of Competitors

-Limited Product Offerings

-Price Stabilisations
----------------------------
**MARKETING EFFORTS
  
-Increase Primary Demand

-Profit Opportunity Pricing

-Prune and Strengthen Distribution
--------------------------------
=======================================
EXAMPLE  OF  MARKETING   PROGRAM   FOR
STAGES IN PRODUCT LIFE CYCLE

D.DECLINE.

1.MARKETING  OBJECTIVE
-arrest  the  market share decline.
-minimize effort/time in  marketing  expenses.

2.SALES
-retain  sales volume.

3.CUSTOMERS
-evaluate  customer complaints.

4.ENVIRONMENT
-search  for  new  opportunities.
5.PRODUCT
-phase out  weak  items
6.PRICE
-cut price or offer other incentives
7.PROMOTIONS
-maintain loyalty
8.DISTRIBUTION
-depend on  middlman         
         





1.COLGATE  ‘SENSITIVE’  TOOTHPASTE
=GROWTH  STAGE
---------------------------
2.DOVE   SOAP
=MATURITY  STAGE
-------------------------
3.LUX  SOAP
= DECLINE  STAGE

Product Life Cycle (PLC)














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2.      Suggest appropriate aims and objectives for a small, medium and large business.
aims and objectives OF a small business.

  AAA--business aims are to serve customers with good quality products and to make a profit. The objectives are to sell products at a cheap price .
===================================
aims and objectives OF a MEDIUM  business

  BBB==always think in fresh and innovative ways about the needs of our customers and how we want them to feel.


  
aims and objectives OF a LARGE  business

CCC==The aims and objectives of a company are generally linked to the objective with which the company was formed by its stake-owners. Mostly,  the
company aim objectives especially those that are capable of enhancing the business. One of the objectives of a company is to expand its business into GLOBAL areas, which is also the goal.


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3.      Consider the decision taken by Kellogg to opt for product development. Suggest a way in which it could have diversified instead. Justify your answer.

KELLOGG  COULD  HAVE  ANALYZED  THE  MARKET   AND  DEVISED  TWO
PRODUCTLINES , WITH  DIFFERENT  PACKAGING.
THEN  FOCUSED THE  PRODUCTS  TO
TWO  DIFFERENT   CHANNELS.
=====================  

Management Consulting

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Leo Lingham

Expertise

management consulting process, management consulting career, management development, human resource planning and development, strategic planning in human resources, marketing, careers in management, product management etc

Experience

18 years working managerial experience covering business planning, strategic planning, corporate planning, management service, organization development, marketing, sales management etc

PLUS

24 years in management consulting which includes business planning, strategic planning, marketing , product management,
human resource management, management training, business coaching,
counseling etc

Organizations
PRINCIPAL -- BESTBUSICON Pty Ltd

Education/Credentials
MASTERS IN SCIENCE

MASTERS IN BUSINESS ADMINSTRATION

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