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Lecture 1 S

The document discusses product life cycle management in the pharmaceutical industry and the typical stages of a product's life cycle. It begins with an introduction to life cycle management, including strategies to expand a product's utility and improve the patient experience. It then describes the common stages a product goes through - product development, introduction, growth, maturity, and decline. For each stage, it provides details on characteristics like sales, costs, profits, and marketing strategies. Finally, it provides an example of Maggi noodles' movement through the typical stages.

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Marie Sarangaya
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Download as PPTX, PDF, TXT or read online on Scribd
37 views

Lecture 1 S

The document discusses product life cycle management in the pharmaceutical industry and the typical stages of a product's life cycle. It begins with an introduction to life cycle management, including strategies to expand a product's utility and improve the patient experience. It then describes the common stages a product goes through - product development, introduction, growth, maturity, and decline. For each stage, it provides details on characteristics like sales, costs, profits, and marketing strategies. Finally, it provides an example of Maggi noodles' movement through the typical stages.

Uploaded by

Marie Sarangaya
Copyright
© © All Rights Reserved
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
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Pharmaceutical Product Life Cycle Management

• is about maximizing the value of our products to our


customers
• this includes new indications, improved formulation, new
delivery system or packaging, IT solutions, etc.,to expand
the utility, and imrove upon efficacy, safety and the patient
experience
Pharmaceutical Product Life Cycle

• is the course of a product’s sales and profits over time


• deals with the life of a product in the market with respect
to business or commercial costs and sales measures
• is the pathway of a product from the beginning of its birth
(introduction) to its decline (death)
Why a Product Life Cycle (PLC)?

• Products have a limited life


• Products sales pass through distinct stages, each posing
different challenges, opportunities and problems to the
seller
• Profits rise and fall at different stages of the roduct life
cycle
• Products require different marketing, financial,
manufacturing, purchasing and human resource
strategies in each life cycle stages
Stages of Product Life Cycle

• Product Development
• Introduction
• Growth
• Maturity
• Decline
Product Development

• Begins when the company develops a new product idea


• Sales are zero
• Investments costs are high
• Profits are negative
Introductory Stage

• is viewed as fairly risky and quite expensive because


large amounts of money is spent on advertising and other
tools of marketing communications to create consumer
awareness in sufficiently large numbers and encouraging
material
Four Introductory Marketing Strategies
Rapid Skimming Strategy

• this strategy consists of introducing a new product at high


price and high promotional expenses
• This strategy makes a sense in following assumptions:
– Major part of market is not aware of the product
– Customers are ready to pay the asking price
– There possibility of competition and the firm wants to build up
the brand preference
– Market is limited in size
Slow Skimming Strategy

• this strategy involves launching a product at a high price


and low promotion
• This strategy can be used under following assumptions:
– Market is limited in size
– Most of consumers are aware of product
– Consumers are ready to pay high price
– There is less possibility of competition
Rapid Penetration

• this strategy consists of launching the product at a low


price and high promotion
• it is based on following assumptions:
– Market is large
– Most buyers are price-sensitive. They prefer the low-priced
products
– There is strong potential for competition
– Market is not much aware of the product. They need to be
informed and convinced
Slow Penetration

• this strategy consists of introducing a product with low


price and low-level promotion
• Assumptions of this strategy:
– Market is large
– Market is aware of product
– Possibility of competitionis low
– Buyers are price-sensitive or price-elastic, and not promotion-
elastic
Growth Stage

• is characterized by a sharp rise in sales


• only a small percentage of new products introduced
survive to reach the growth stage
Marketing Strategies
• Strategies:
– Improves product quality and adds new features and improved styling
– Adds new models and flanker products (i.e., products of different
sizes, flavors, and so forth that protect the main product)
– It enters new market segments
– It increases its distribution coverage and enters new distribution
channels
– It shifts from product-awareness advertising to product preference
advertising
– It lowers price to attract the next layer of price-sensitive buyers
Maturity Stage

• the sales plateau and this flattening of sales usually lasts


for some time because most products in the category
have reached their maturity stage, and their stability in
terms of demand, technology and competition
Marketing Strategies for Maturity Stage

• Following possible strategies are followed:


1. To-do Nothing
- new strategies are not formulated
2. Market Modification
Sales volume = no. of brand users*usage rate per user
Expand the no. of brand users
Convert non-users
Enter new market segments
Attract competitors customers
Increase the usage rate among users
Have consumers use the product on more occasions
Have consumers use more of the product on each
occasion
Have consumers use the product in new ways
3. Product Modification
- trying to stimulate sales by modifying the products
characteristics through
Decline Stage

• sets in when customer preferences change due to the


availability of technologically superior products and
consumers shift in values, beliefs and tastes to products
offering more value
Summary of Characteristics, Objectives and Strategies
Introduction Growth

Sales Low Sales Rapidly rising

Costs High Cost per customer Average Cost per customer

Profits Negative Rising

Marketing Create product awareness and trial Maximize market share


Objectives

Product Offer a basic product Offer extension, service, warranty

Price Use cost-plus Penetration strategy

Distribution Build seclective distribution Build-intensive distribution

Advertising Build product awareness among Build awareness and interest in the mass market
early adopters and dealers
Summary of Characteristics, Objectives and Strategies
Maturity Decline
Introduction Maturity
Sales Peak Declining
Sales Low Sales Peak
Costs Low cost per customer Low cost per customer
Costs High Cost per customer Low cost per customer
Profits High Declining
Profits Negative High
Marketing Objectives Maximize profits while defending Reduce exenditures and milk the brand
Marketing Objectives Create product
market shareMaximize profits while
awareness and trial defending market share
Product Diversity brand and models Phase out weak items
Product Offer a basic product Diversity brand and
models
Price Match or best competitors Cut price
Price Use cost-plus Match or best
Distribution competitorsSelective: Phase out unprofitable outlets
Build more intensive distribution
Distribution Build seclective Build more intensive
distribution distribution
Advertising Stress brand differences and benefits Reduce to minimum level
Advertising Build product awareness Stress brand differences
among early adopters and benefits
and dealers
Common Product Life Cycle
Impact of PLC on Marketing Strategy
Identifying STAGES
Features

Introduction Growth Maturity Decline

Sales Low High High Low

Investment Cost Very High High (Lower than Low Low


intro stage)

Competition Low or no High Very High Low


competition

Advertising VEry High High High Low

Profit Low High High Low


Example: MAGGI NOODLES

• Stage I: INTRODUCTION
– launched in India in 1982 keeping in mind working women and
children
– pioneer in instant noodle market
– low price
• Stage II: GROWTH
– sales increased
– 50% Market Share
– No.1 brand
– “GOOD TO EAT FAST TO COOK”
Example: MAGGI NOODLES

• Stage III: MATURITY


– introduced new variety
– Big Time Promotional Offers
– Slow Down in Sales
– Market Saturation
• Stage IV: DECLINE
– big time downfall in sales
– formulation changed
– new products launched
– failure

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