QUESTION 1En Suhaimy Shuib plans to produce a new beverage product-chocolate fantasy. To reduce the cost, he plans not to use any brand name or ny marketing strategy for the new beverage.En Suhaimy Shuib should uses a Product Life Cycle (PLC) stage in order to increase his sales and to retain his product in the marketStage;1) IntroductionIntroduction stage starts when the new product is first launched. A period of slow sales growth as the product is introduced in the market. Profits are non- existent in this stage because of the heavy expanses of introduction.

Strategies that be used in the introduction stage a) Skimming and Penetration Strategies A Rapid Skimming StrategyInvolve launching the new product at a high price and high promotion level. The firm charge a high price to recover as much profit per units as possible. This strategy makes sense when a large part of the product , those who become aware are eager to have the product and can pay the asking price. A Slow Skimming StrategyLaunching the new product at a high price and low promotion. The high price helps recover as much profits per unit as possible and the low level of promotion keep marketing expenses down. This strategy makes sense when the market is limited in size, most of the market is aware of the product buyers are willing to pay a high price and potential competition is not imminent. A- Rapid Penetration StrategyInvolve launching the new product at a low price and high promotion. This strategy promises to bring about the fastest market penetration and the largest market share . This strategy make sense when the market is large, the market is unaware of the product, most buyers are price-sensitive, there is strong potential competition.

A Slow Penetration StrategyInvolve launching the new product at a low price and low level of promotion. The low price will encourage rapid product acceptance and low promotion costs bring profits up. This strategy makes sense when the market is large, the market is highly aware of the product, the market is price sensitive and there is some potential competitionb) Market Pioneers Companies that plan to introduce a new product must decide on when they will enter the market. The market pioneers gains the most advantages such customer often refer pioneering brands to other brands. The pioneers brand also establish and the attributes of the product can satisfy the customer it is because the pioneers brand normally aims at the middle of the market, it capture more usersc) Competitive cycle The pioneer knows that competition will eventually enter and cause prices and its market share to fall. There five stages of competitive cycle that the pioneer has to anticipate:1. Stage 1- sole supplierThe pioneer is the sole supplier, with 100% of the production capacity and sales.2. Stage 2- competitive PenetrationStart when a new competitors has built production capacity and begins commercial sales. Other competitors entre as well and the pioneers share of production capacity and share of sales fall.3. Stage 3 Share StabilityCapacity tends to be overbuilt during the rapid growth stage, so that when a cyclical slowdown occurs, industry overcapacity drives down margins to more normal levels. This stage, capacity shares and market share stabilize.4. Stage 4 Commodity competitionThe product is viewed as a commodity, buyer no longer pay a price premium and the suppliers earn only an average rate of return.

5. Stage 5 WithdrawalThe pioneer might decide to build share further as other firm withdraw. As a pioneer moves through the various stages of this competitive cycle, it must continuously formulate new pricing and marketing strategies2) Growth A period of rapid market acceptance and substantial profit improvement. If consumers clearly feel that this product will benefits them in some ways and they accept it. The organization will see a period of rapid sales growth with sale start climbing quickly. Profits increase during the growth stage, has promotion costs spread over a large volume and as unit manufacturing costs fall.

3) MaturityA period of a slowdown in sales growth because the product has achieved acceptance by most potential buyers. Profits stabilize or decline because of increased marketing out lays defend the product again competition.

Strategies that be used in maturity stage;a) Market modification The company can try to expand the number of brand users in three ways:1) Convert nonuser attract nonusers to the product.2) Enter new market segments3) Win competitors customers company can attract competitors customer to try adopt the brand. Strategies increase number of volume: 1) More frequent use the company can try to get customers to use the product more frequently.2) More usage per occasion the company can try to interest users in using more of the product on each occasion.3) New and more varied uses the company can try to discover new product uses and convince people to use the product in more varied way.

b) Product modification1) Quality improvement This strategy aims at increasing the functional performance of the product (its durability, reliability, speed and taste) The company can overtake its competitors by launching a new and improved version of the product.2) Features improvement This strategy aims at adding new features (size, weight, materials, accessories) that expand the products versatility, safety or convenience. News features build an image of company innovativeness.3) Style improvement This strategy aims at increasing the aesthetic appeal of the product. The periodic introduction of new car models amounts to style competition rather than quality or feature competition.c) Marketing-mix modification Product managers might also try to stimulate sales by modifying one or more marketing mix elements. A major problem with marketing- mix modifications is that they are highly imitable by competition, especially price reductions and additional services.

4) DeclineThe period when sales show a down ward drive and profits erode. Sales may decline for many reasons, including technological advances, shifts in consumers taste and increased competition.

Strategies that be used in Decline stage;a) Identifying the weak product The company appoints a product- review committee with representatives from marketing, R&D, Manufacturing and finance to develop a system for identifying week products

b) Determining market strategies-increase it investment (to dominate or strengthen its competitive position)- maintain its investment level until the uncertainties about the industry are resolved .- decrease its investment level selectively by drop unprofitable customer groups-harvest its investment to recover cash quickly- divest the business quickly by disposing of its assets as advantageously as possible. c) Drop decision- when a company decides to drop a product, its faces further decision. If the product has strong distribution and residual goodwill, the company can probably sell it to another firm. - If the company cannot find any buyers. It must decide whether to liquidate the brand quickly or slowly.