plc

Product Life cycle

 

 

Every product category passes through different stages of its market life. These stages are :-

• Introduction stage : It is that stage in a product's life where it is first introduced in a market. This stage requires a lot of promotion and awareness about its unique selling point to its target segment. At this stage, a company has to spend a lot on promotions and distribution. Also since the product is new in the market, the revenue generation is low.

When Red Bull was launched in the market, it was a new to world kind. To build up the brand loyalty and status it has now, it had to go through a lot of promotional activities.

Growth stage : At this stage, the product gets accepted by the customers and the revenue starts coming in. Competitors enter the market with full force seeing the potential in the product category. To outperform the competition, aggressive marketing strategies are drawn. Since sales start to rise, the cost comes down. Also new variants of the same product category are launched as an expansion strategy.

Red Bull's aggressive marketing through sports and competitions spread more brand awareness and build strong image for itself. the most popular marketing and promotional activities include Felix Baumgartner's fall from the space. Over 8 million people watched the jump live as he took the leap. They get directly involved and organize events themselves. The annual Flugtag, Cliff diving, Wakeboarding, Breakdancing, Music Academies and Studios, DJ events etc are some of them.

Maturity stage : This is where the product has experienced the growth and is at its peak. The market is stable with its loyalists. There is a stable flow of revenue and sales. The main focus here is to grip new customers. This stage lasts the longest.

Red bull is on its maturity stage, but the it still sees the steady rise in sales and attract more customer. They sold 5,200,000,000 cans in 2012 alone.  They continue to associate with 500 athletes all over the world and sponsor major sport events along with organising some mind-boggling competitions of its own. During these events red bull sells for a major discounts or gives them for free. people who haven't tried Red Bull yet, get to try their hands on it . This will not only increase the customer base but also maintain its brand association with energy and adrenalin rush .

In Mumbai, last year Red Bull had organised Soapbox race. They were selling cans for only Rs 40. My friend and her sister who hadn't tried Red Bull till then, gulped down four cans each. Yes they could not sleep the whole night, but Red Bull gained new customers.

Decline stage : When product starts struggling for sales or have no scope for growth at all, it deems to have entered the last stage of its life. This happens due to better substitutes in the market, customers' preference shifting to competitor's product, outdated technology etc. the best way to deal with the product in this stage is to either remove it from the market and come up with a total new product having completely new features which can tackle the customer problems in a better way than its competitors or to find buyers for its revitalization.

 

ILC- Industry life cycle : summation of all the product life cycles of the same category gives industry life cycle . It follows the same stages of life cycle.

 

 BLC- Brand life cycle : In case brands jumps across categories.