COLLEGE OF AGRIBUSINESS MANAGEMENT

GBPUA&T, Pantnagar

TOPIC: COMPETITIVE DYNAMICS

SUBMITTED TO : Dr JAYANT GAUTAM PRESENTED BY : NAVJOT UNIYAL

NIHAL PADALIA
NAMAN BILLORE
JASMINE KAUR
PRODUCT LIFE-CYCLE
MARKETING STRATEGIES

• The Product Life Cycle Stages or International, which was developed

by the economist Raymond Vernon in 1966, is still a widely used
model in economics and marketing.

• Products enter the market and gradually disappear again. According

to Raymond Vernon, each product has a certain life cycle that begins
with its development and ends with its decline.
PRODUCT LIFE CYCLES
• Most product life cycles are portrayed as bell-
shaped curves, typically divided into four stages:
introduction, growth, maturity, and decline
• Introduction—A period of slow sales growth as
the product is introduced in the market. Profits
are nonexistent because of the heavy expenses
of product introduction.
• Growth—A period of rapid market acceptance
and substantial profit improvement.
• Maturity—A slowdown in sales growth because
the product has achieved acceptance by most
potential buyers. Profits stabilize or decline
because of increased competition.
• Decline—Sales show a downward drift and
profits erode.
We can use the PLC concept to analyze a product category (Hair Care), a product form (Hair Oil), a product
(Coconut Oil), or a brand (Parachute). Not all products exhibit a bell-shaped PLC. There are 3 common
alternative pattern, they are:
1. Growth Slump Maturity Pattern
2. Cycle Recycle Pattern
3. Scalloped Pattern
STYLE, FASHION, AND FAD LIFE
CYCLES
• A style is a basic and distinctive mode of expression appearing in a field of
human endeavor.
• A fashion is a currently accepted or popular style in a given field.
• Fads are fashions that come quickly into public view, are adopted with
great zeal, peak early, and decline very fast.
INTRODUCTION STAGE AND THE
PIONEER ADVANTAGE
• Because it takes time to roll out a new product, work out technical
problems, fill dealer pipelines, and gain consumer acceptance, sales
growth tends to be slow in the introduction stage. Profits are
negative or low, and promotional expenditures are at their highest
ratio to sales because of the need to
• inform potential consumers,
• induce product trial,
• secure distribution in retail outlets.
• Prices tend to be higher because costs are high, and firms focus on
buyers who are the most ready to buy.
PIONEER ADVANTAGE &
DISADVANTAGE
• Studies show that a market pioneer can gain a great advantage. Coca-
Cola, Hallmark, and Amazon.com developed sustained market dominance.
• Peter Golder and Gerald Tellis raise further doubts about the pioneer
advantage. They distinguish between an inventor, first to develop patents
in a new-product category, a product pioneer, first to develop a working
model, and a market pioneer, first to sell in the new-product category.
Including nonsurviving pioneers in their sample, they conclude that
although pioneers may still have an advantage, more market pioneers fail
than has been reported, and more early market leaders succeed. Later
entrants overtaking market pioneers through the years included
Matsushita over Sony in VCR, and Google over Yahoo! In search.
GROWTH STAGE
To sustain rapid market share growth now, the firm:
• improves product quality and adds new features and improved styling.
• adds new models and flanker products (of different sizes, flavors, and so
forth) to protect the main product.
• enters new market segments.
• increases its distribution coverage and enters new distribution channels.
• shifts from awareness and trial communications to preference and
loyalty communications.
• lowers prices to attract the next layer of price-sensitive buyers.
 MATURITY STAGE
• At some point, the rate of sales growth will slow, and the product will
enter a stage of relative maturity. Most products are in this stage of the
life cycle, which normally lasts longer than the preceding ones.
• The maturity stage divides into three phases: growth, stable, and
decaying maturity.
DECLINE STAGE
• Sales decline for a number of reasons, including technological
advances, shifts in consumer tastes, and increased domestic and
foreign competition. All can lead to overcapacity, increased price
cutting, and profit erosion.
MARKETING IN AN ECONOMIC
DOWNTURN
• Given economic cycles, there will always be tough times, such as the
recession of 2008-2009 and the slow recovery that has followed.
Despite reduced funding for marketing programs and intense pressure
to justify them as cost effective, some marketers have survived or
even thrived in tough economic times. Here are five guidelines for
improving the odds for marketing success in a slow-growth economy.
EXPLORE THE UPSIDE OF
INCREASING INVESTMENT
• Forty years of evidence suggests those willing to invest during a
recession have, on average, improved their fortunes more than those
that cut back.94 Marketers should consider the potential upside of
increasing investment to exploit a marketplace advantage like an
appealing new product, a weakened rival, or a neglected target
market to develop. Here are two companies that did.
• UK supermarket giant Sainsbury launched an advertising and point-
of-sale campaign called “Feed Your Family for a Fiver” that played off
its corporate slogan, “Try Something New Today,” to encourage
shoppers to try new recipes that would feed families for only £5 (or
$9).
GET CLOSER TO CUSTOMERS
• Consumers with leveling incomes may change what they want and
where and how they shop. A downturn or slow-growth period is an
opportunity to learn even more about what consumers are thinking,
feeling, and doing, especially the loyal base that yields so much
profitability
REVIEW BUDGET ALLOCATION
• Slowed growth provides an opportunity for marketers to review their
spending, opening promising new options and eliminating sacred
cows if they don’t yield results. It can be a good time to experiment.
• In London, T-Mobile created spontaneous “happenings” to convey
its brand positioning that “Life’s for Sharing” and generate
massive publicity. Its “Dance” video, featuring 400 dancers getting
subway riders to dance, was viewed millions of times on YouTube.
PUT FORTH THE MOST
COMPELLING VALUE
PROPOSITION
• Focusing heavily on price reductions and discounts can harm long-
term brand equity and price integrity. Marketers should increase—
and clearly communicate—their brands’ value, conveying all the
financial, logistical, and psychological benefits.
• Discounting successful brands is not a good option because it tells the
market two things: your prices were too high before, and your
products won’t be worth the price once the discounts are gone.
Appealing to frugal customers with a new brand at lower prices avoids
alienating those still willing to pay for higher-priced brands.
FINE-TUNE BRAND AND
PRODUCT OFFERINGS
• Marketers can review product portfolios and brand architecture to
confirm that brands and sub-brands are clearly differentiated,
targeted, and supported based on their prospects. Luxury brands can
benefit from lower priced brands or sub-brands in their portfolios.
THANK YOU