1. List the stages of the product lifecycle.

Identify where the profit and loss situations are likely

to occur. Identify and justify at least one marketing strategy for each stage of the product
lifecycle.
New product development- first stage of PLC occurs when the organisation develops the idea,
undertake research, prepare prototypes, pre-tests the product and makes modifications before
the product launch. During new product development, faults and problems can be eliminated
and positive features can be refined and improved. This stage will suffer losses as the
company’s investment costs increase and also development cost.
Introduction- mark the first appearance of the product in the marketplace. Since the market
knows little or nothing about the product, the organisation must make considerable
investment in promotional activities in order to build awareness and interest in the product- to
trigger potential customers (innovators) to evaluate, trial and purchase new product.
Furthermore, profits in the introduction stage are negative or low due to the low sales on the
one hand and high-distribution and promotion expenses on the other hand. Obviously, much
money is needed to attract distributors and build their stocks. Also, promotion spending is
quite high to inform consumers of the new product and get them to try it. Sales start at zero
and must offset those costs. Only then does the product begin to earn profit. To be more
precise, since the market is normally not ready for product improvements or refinements at
this stage, the company produces basic versions of the product. Cost-plus pricing should be
used to recover the costs incurred. Selective distribution in the beginning helps to focus
efforts on the most important distributors. Advertising should aim at building product
awareness among innovators and early adopters. To entice trial, heavy sales promotion is
necessary.
Growth- sees increasing popularity, sales and profits. The reason is that early adopters will
continue to buy, and later buyers will start following their lead, in particular if they hear
favourable word of mouth. This rise in sales also attracts more competitors that enter the
market. Since these will introduce new product features, competition is fierce and the market
will expand. As a consequence of the increase in competitors, there is an increase in the
number of distribution outlets and sales are augmented due to the fact that resellers build
inventories. Since promotion costs are now spread over a larger volume and because of the
decrease in unit manufacturing costs, profits increase during the growth stage. The main
objective in the growth stage is to maximise the market share. Product quality should be
improved and new product features and models added. The firm can also enter new market
segments and new distribution channels with the product. Prices remain where they are or
decrease to penetrate the market. The company should keep the promotion spending at the
same or an even higher level. Now, there is more than one main goal: educating the market is
still important, but meeting the competition is likewise important. At the same time, some
advertising must be shifted from building product awareness to building product conviction
and purchase.

Maturity- as competitors enter market with similar products, the novelty of the product wears
off, potential superior product become available, and product’s sales start and profit-ability
peak and start to fall. The company’s main objective should be to maximise profit while
defending the market share. the firm should consider to modify the market, product and
marketing mix. Modifying the market means trying to increase consumption by finding new
users and new market segments for the product. Also, usage among present customers can be
increased. Modifying the product refers to changing characteristics such as quality, features,
style or packaging to attract new users and inspire more usage. And finally, modifying the
marketing mix involves improving sales by changing one or more marketing mix elements.
 For instance, prices could be cut to attract new users or competitors’ customers. The firm
could also launch a better advertising campaigns or rely on aggressive sales promotion.
Decline- sees sales and profits fall. Also for the decline stage, careful selection of product life
cycle strategies is required. The reason is that carrying a weak product can be very costly to
the firm, not just in profit terms. There are also many hidden costs. For instance, a weak
product may take up too much of management’s time. It requires advertising and sales-force
efforts that could better be used for other, more profitable products in other stages. Most
important may be the fact that carrying a weak product delays the search for replacements and
creates a lopsided product mix. It also hurts current profits and weakens the company’s
foothold on the future. The main objective in the decline stage should be to reduce
expenditure and “milk” the brand. General strategies for the decline stage include cutting
prices, choosing a selective distribution by phasing out unprofitable outlets and reduce
advertising as well as sales promotion to the level needed to retain only the most loyal
customers. If management decides to maintain the product or brand, repositioning or
reinvigorating it may be an option. The purpose behind these options is to move the product
back into the growth stage of the PLC.

2. By way of examples explain Ansoff's growth strategy matrix.

Market Penetration is about selling more of the company’s existing products to existing
markets. To penetrate and grow the customer base in the existing market, a company may cut
prices, improve its distribution network, invest more in marketing and increase existing
production capacity. Brands such as Coca-Cola and Heineken are known for spending a lot on
marketing in order to penetrate their markets. In addition, they try to maximize the use of
distribution channels by making attractive deals with a large variety of distributors such as
supermarkets, restaurants, bars and football stadiums for example.

Product Development is about developing and selling new products to existing markets.
Companies could for example make some modifications in the existing products to give
increased value to the customers for their purchase or develop and launch new products
alongside a company’s existing product offering. A classic example of product development
is Apple launching a brand new iPhone every few years. Other examples can be found in the
pharmaceutical industry where companies such as Pfizer, Merck and Bayer are heavily
 investing in Research and Development (R&D) in order to come up with new and innovative
drugs every now and then.

Market Development is about selling more of the company’s existing products to new
markets. This strategy is about reaching new customer segments or expanding internationally
by targeting new geographic areas. If a company’s product is doing exceptionally well in one
market, why not try to enter a new market with the same products? This is what for example
IKEA has done over the past few decades in order to become one of the biggest furniture
retailers in the world. IKEA started off expanding to markets relatively close in terms of
culture as to its home country (Sweden markets.) before targeting more challenging
geographic areas such as China and the Middle-East.

Diversification strategies are about entering new markets with new products that are either
related or completely unrelated to a company’s existing offering. This the most risky strategy
in the matrix, as the business is moving away from what it has done in the past and into new
area where it has little or no experience. A great example of a diversification is Samsung,
which is operating in businesses varying from computors, phones and refrigerators to
chemicals, insurances and hotel chains.

3. Search 1 brand of soft drink (eg. Pepsi) and discuss the labelling.
MTN DEW® is celebrating what makes the United States great this summer by releasing the
DEWnited States Collection, a limited-edition bottle series representing all 50 states.
Influenced by DEW fans and the pride they have in their home states, each collectible bottle
of specially marked Original MTN DEW® and Diet MTN DEW® features artwork unique to
the state it represents. Knowing DEW Nation loves collecting and lives for a challenge, DEW
is also offering $1001 when they collect all 50 bottles. In addition, the brand is releasing MTN
DEW LIBERTY BREW, a blend of 50 different signature flavors combined in this limited-
edition DEW.

4. Explain Repositioning and product obsolescence in managing products.

Repositioning is the task of implementing a major change the target market’s perception of
the product’s key benefits and features, relative to the offerings of competitive products. For
some organisation, there may be the need to change an aspect of the marketing mix to
reposition themselves in the market. This might be to stay relevant to the changing needs of
customers, or in reaction to changes by a competitor. An organisation can physically change a
product, its design, pack-aging or add-on services and its price, distribution or promotional
activities, in order to reposition it in the eyes of the customers. This can help rejuvenate an old
image and expand into new markets, as seen by Adidas, which has repositioned from shoes
worn by athletes to celebrities like Selena Gomez, Kylie Jenner to become a cool brand for
new generations.
Products may become obsolete. Obsolescence may be either planned or unplanned. For
example, most companies that market business software such as Apple release a version of
the software with intention of replacing it after a year or two with an upgraded version that
offers more features to the customer. This is known as planned obsolescence and enables the
marketer to generate repeat business from the same customers. Product deletion is the process
of eliminating a product from the product mix. This is a good decision for those product sales
which is in significant decline and it may not worth to reposition the product in the market.