product life cycle_ iips

Product Life Cycle

Hindustan Unilever Limited

Hindustan Unilever Limited (HUL) is India's largest fast moving consumer goods company, with leadership in Home & Personal Care Products and Foods

Mission “Adds vitality to life” Parent Company-Unilever with 52.10%

equity Its combined volumes of about 4 million

tonnes and sales of Rs.13,718 crores.

The stages through which individual

products develop over time is called

commonly known as the "Product Life

Cycle".

Time

ProductDevelop-

ment

Introduction

Profits

Sales

Growth Maturity Decline

Losses/Investments ($)

Sales andProfits ($)

Rapid Skimming Pond’s Age

Miracle

Slow Skimming

Eg:-Public Airlines

Rapid Penetration

Slow Penetration

Eg:-Local

Staple

goods

HIGH

LOW

P

R

I

C

E

LOWHIGH

PROMOTION

Advertising & Promotional expenditures are at their highest ratio to sales- to rapidly increase customer awareness of the product and to target the early adopters.

Higher costs coupled with a low sales volume usually make the introduction stage a period of negative profits.

Decision has to be taken on being a pioneer or not

Pioneer advantage. Brand Recall - brand synonymous

with the new category. Eg:-Dettol(=Antiseptic)

Product - one or few products, relatively undifferentiated

Price – High -Skim price strategy- High profit margins to

recoup development costs quicklyLow- Penetration Pricing strategy to gain market

share rapidly.

Distribution - Distribution is selective and scattered as the firm commences implementation of the distribution plan.

Promotion - Promotion is aimed at building brand awareness

Lifebuoy was sold in India as early as 1895

It was officially launched and marketed from 1935.

It was the largest selling soap brand in the world with sales of Rs 5 bn and sold approximately 2 million soaps a day (as on 2002).

Initial Positioning- in the Health and Value platform.

Initial Segmentation-Carbolic Soap

Its ads reiterated the message that Lifebuoy washed away germs and kept one protected and healthy.

It’s target segment was Males-A Masculine brand.

The soap was brick red and carbolic ingredient with a unique smell (chryselic perfume)

This distinguished itself from other feminine brands.

The campaigns showed footballer players and athletes using the soap and the jingle

followed jingle followed " thandurusti ki raksha kartha hai lifebuoy, lifebuoy hai jahan thandurusti hai vahan". -Male soap in health care

Product- undifferentiated red brick with cryselic smell

Segmentation:- Carbolic soap segment Positioning:-Masculine brand in health

and value platform Market Strategy:-High Penetration Initial Price & Market share- had a 21%

market share in the overall soap market

"It is the biggest and comprehensive

relaunch of any of our brands. Lifebuoy

which has remained unchanged for the

last 107 years is a completely new

product since January 2002," said Mr

Sanjay Dube, Category Head - Mass

Market Soaps and Detergents, HLL.

The growth stage is a period of rapid

revenue growth.

Sales increase as more customers become

aware of the product and its benefits and

additional market segments are targeted.

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.

Promotion - Increased advertising to build brand preference.

Intro:-

Launched in 1975, this brand is the first gel toothpaste

aiming at the youth segment.

HLL through CloseUp have created and owned a segment

for itself.

CloseUp was a disruptive brand that changed the

structure of toothpaste market in India.

With the red colour and smart

advertising , it forced the market leader

to change its strategy and launch a gel

variant.

The customer insight was that people are conscious about their breath and want to get close with each other with confidence.

Based on this insight the brand was positioned on the Fresh Breath platform

The campaign was executed showing "Happy couples having fun together".

Even film Theatres had corners called as “Close Up Corners” ".

Close Up have used films and filmi songs to appeal to the Indian youth.

Close Up was the first brand to introduce the " Self Check" of breath.

The famous " HA HA" was the idea of Close Up introduced in year 1987

Positioning- Youth brand on fresh breath platform

Segmentation- Gel variant Promotional Campaign- “Get Closer with

Confidence” Market Share- 13% alone and along with

Pepsodent it accounted for 36% market share, giving tough competition to Colgate

• Sales continue to increase at a slower pace.

• Advertising expenditures will be reduced.

• Competition may result in decreased market share and/or prices.

• The competing products may be very similar at this point, increasing the difficulty of differentiating the product.

• The firm places effort into encouraging :- competitors' customers to switch, increasing usage per customer, and converting non-users into customers.

• Sales promotions may be offered to encourage retailers to give the product more shelf space over competing products.

Product - Modifications are made and features are added in order to differentiate the product from competitors.

Price - Possible price reductions in response to a price war.

Distribution - New distribution channels to avoid losing shelf space.

Promotion - Emphasis on building of brand loyalty.

Close Up found that its mono-attribute focus is losing the sheen

Many market players Crest-by P&G Colgate & Pepsodent wars Cliden and a brand by Ajanta group

Crest, by P&G- 135gm pack for Rs21-25 LG Care-Cliden toothpaste Toothpaste by Ajanta-200gm pack for

Rs20/- Combipack of Anchor white toothpaste &

toothbrush- Rs 25/- Pepsodent & Close up-200gm pack-

40Rs/-

In Maturity phase as per ORG-Marg,

Close-Up has a 17.5 per cent value share

in the Rs 1,400-crore toothpaste market.

New focus on 3 attributes : Fresh breath, White Teeth and Strong Teeth.

CloseUp With Vitamin and Flouride – offer oral care

3 Variants- Oxy fresh, Eucalyptus Blue, Lemon variant

“Smile Ad” & “Kya aap Close up karte hain”-to promote brand loyalty & emphasize brand identification in heightened competition.

The 'Smile King' commercial reflected the confidence of today's youth.

Launch of www.closeupuniverse.com- A website for youth, again reinforcing that it is a youth brand.

Eventually sales begin to decline as the

market becomes saturated, the product

becomes technologically obsolete, or

customer tastes change.

Maintain the product in hopes that competitors will exit. Reduce costs and find new uses for the product.

Harvest it, reducing marketing support and coasting along until no more profit can be made.

Discontinue the product when no more profit can be made or there is a successor product.

Product - The number of products in the product line may be reduced. Rejuvenate surviving products to make them look new again.

Price - Prices may be lowered to liquidate inventory of discontinued products. Prices may be maintained for continued products serving a niche market.

Distribution - Distribution becomes more selective. Channels that no longer are profitable are phased out.

Promotion - Expenditures are lower and aimed at reinforcing the brand image for continued products.

However, most of the companies go for BRAND REVIVAL .

On a positive note, the whole new version of the product with new marketing strategy is used.

Thus, under the initial name, a completely new formulation is developed.

Hence, very few products may or may not be wiped off.

The soap market in India was fairly sluggish in 2001, declining by 9-10 per cent. Lifebuoy's decline exceeded that of the overall market

Lifebuoy has been declining by 15-20 per cent in volume terms.

The decline was partly on account of the sluggish growth in the rural market, which accounts for 50 per cent of soap demand.

HLL launched Lifebuoy Active , Lifebuoy Extra Strong in during the second half of 2001.

OLD LOOK NEW LOOK

Lifebuoy is no longer a carbolic soap with cryselic perfume,

It is a toilet soap with a different `health' fragrance. With this launch, the carbolic segment has been wiped out.

New perfume, formulation, size and shape.

From an earlier focus on men, the focus has shifted to family with the message that Lifebuoy is for effective protection from germs that cause health problems.

Focus on Men Focus on family

Distribution- It has touched nearly 100

million Indians across 44,000 villages

HLL has identified 8-9 key States for

commencing its rural contact programme

wherein the CONCEPT OF HYGIENE will be

highlighted.

On 15 October 2008 Lifebuoy with members of the Global Public Private Partnership for Handwashing (PPPHW) –

including UNICEF promoted a single life-saving message: wash hands with soap.

It was conducted in 23 countries.

The campaign, called Swasthya Chetna, or health awakening, is the largest rural health and hygiene education program ever undertaken in India.

It is to educate 200 million Indians – 20% of the population - to wash their hands with soap after defecating and achieve this goal within five years.

Products do not have such a predictable life and the specific life cycle curves followed by different products vary substantially.

Consequently, the life cycle concept is not well-suited for the forecasting of product sales.

If sales peak and then decline, managers may conclude that the product is in the decline phase and therefore cut the advertising budget, thus precipitating a further decline.