Product Life Cycle 1nk4d

PRODUCT LIFE CYCLE: Product life cycle refers to the series of stages in which a product sales revenue and profit increase or is presented. It describes the stages a new product goes through in the market place. It’s the life of a product. Just like in human growth there are stages involved in the growth of a product. Firms must be able to launch, modify, and delete products and characteristics to ensure a profitable product life. The product lifecycle is influenced by market demand. Mangers of a business should know what stage a product is in and the one it is likely to be moving to. This is so as to be able to devise a marketing program benefiting the product sales. There are about four main stages in the development of a product. These stages are: • Introduction • Growth • Maturity • Decline It can be shown in the following normal curve-

Maturity Customer Demand/ Sales

Decline Growth Discontinue

Introduction Time

Stages in a Product's Life Cycle

Figure 1: Normal Curve of Product Life Cycle Sometimes many products often do not undergo every stage of the product life cycle. A new product may enter the decline stage quickly after its introduction without even reaching the maturity stage. For example, Mini Disc players entered the market in the early 1990s, gained popularity in the mid 1990s especially in Japan, but then quickly disappeared from the market before reaching its maturity stage. The main reason for its abrupt decline was technological advance and shift in market trends, as more convenient MP3 players were introduced

and

people

quickly

moved

away

from

Mini

Disc

players.

Practically it is little bit difficult to tell in which stage a product is currently running. Product life cycle function is a relation between time and sales, and none of these variables is definite. The time that a product spends at each stage varies among products, and the length of the life cycle varies as well. Also, fluctuations in product sales which are usual in the market make it hard for companies to determine the current stage of the product. If sales reach its peak and then decline, managers may mistake it for a sign that the product has reached its decline stage, even when the decline of sales in reality was only temporary. However, here we will try to discuss particularly on the Product Life Cycle of LUX Beauty Soap of Unilever including current stage identification and possible ways to extend the life of this product. Prior that let us have a look on the company information and their marketing strategy for this product. UNILEVER AT A GLANCE: Unilever is a multinational consumer product manufacturing giant operating in over hundred countries all around the globe. Unilever Bangladesh is the Bangladesh chapter of Unilever, where the company holds 60.75% share whereas the Government of Peoples Republic of Bangladesh holds 39.25% share. Unilever’s one of the most popular brand is LUX. They segments LUX.’s market according to geographical locations. It further differentiates these segments into Socio Economic Cluster (SEC) which takes into the criteria of education and profession which ultimately measures the financial ability of consumers. The cluster is divided into five parts starting from A to E. Unilever targets the urban and sub urban upper middle class and middle class segment of the population, who falls under A to C of SEC.

Tactical marketing tools, 4P’s, are extensively used by the company to market LUX. Though LUX is produced in Bangladesh, Unilever Bangladesh maintains the same standard all around the globe. The product is available in six different fragrances under three different sizes. Since the demand for beauty soap market is to a great extent oligopolistic, variations in price lead to price war which can eventually break down the company’s market share. Thus Unilever cannot provide a better price than its competitors. But the price is affordable by most of the people. Unilever Bangladesh has outsourced its distribution channels to third party distributors which allow them to distribute LUX in massive bulks amounting to around ten million pieces. It undertakes the largest promotional activities in the beauty soap industry. The beauty soap industry has a few major producers of which Unilever holds market share of slightly less than 50%. Other competing brands like Tibbet, Meril, Aromatic and Keya have started to have a strong consumer base, but LUX.’s product features distribution and promotional activities have created high brand loyalty for which it is still the market leader. Unilever, with the aid of its heavy promotional activities, has been able to penetrate the market. But the other producers in the industry are posing a threat towards Unilever’s market share as they have moved towards the rural masses of the population. Therefore, Unilever Bangladesh should undertake further steps such as moving towards the rural and/or poorer segment; attract children (by making a special product for kids) and other innovative promotional activities to retain its command in the industry. MARKET SHARE: The beauty soap industry in Bangladesh consists of only seven major producers. Unilever Bangladesh Ltd is operating in the industry with its world famous brand LUX. Out of these giant companies Unilever Bangladesh Ltd is the market leader with a share of around 43%.

Figure 2: Market Share The Figure 2 shows the market share of all the companies in the sector. Unilever Bangladesh Ltd is leading the market. The other competitors are very competitive among themselves but they cannot put a intense competition with Unilever Bangladesh Ltd, as they have market share much less than Unilever Bangladesh Ltd. Unilever Bangladesh Ltd. is the market leader with more than 43 percent of the yearly market share of toilet soap and 60 percent of the laundry soap and detergent market. The below table shows the estimated combined market share of the total toiletries market of major five firms. Sl. No.

Name of Firm

Market share 2012

1

Unilever (BD) Ltd.

43%

2

Kohinoor Chemicals Co. Ltd.

10%

3

Square Toiletries Ltd.

10%

4

ACI (Cosmetic) including Colgate

5%

5

Keya Cosmetic Ltd.

5%

Table for major player in Bangladesh for this sector

Other companies in the industry are not as big as Unilever Bangladesh Ltd but they are posing threat to the company by a tendency of a gradual increase in their market share. Kohinoor Chemicals which is operating with the brand name Tibet is an extremely famous brand to the rural segment of the population and possess a significant share in that segment which is the largest population group in Bangladesh. Moreover Square Toiletries Limited operating their brand Meril, Keya Cosmetics Ltd operating with the brand name Keya and Marks & Allys Ltd operating with the brand name Aromatic are also uprising brands to both the rural and sub urban segment of the population. PROMOTION: Unilever Bangladesh undertakes huge promotional activities to promote LUX which has topped the beauty soap industry of Bangladesh. It spends almost 20% to 25% of its Net Proceeds from Sales (NPC) of LUX for promotional activities for LUX It’s certain annual promotional campaigns like LUX Channel i Superstar and LUX Channel i Annual Cinema Awards has made the product a part of the glamour world. Since the 1930s, over 400 of the world’s most stunning and sensuous women have been proudly associated with Lux ments. They do not only promote LUX in Bangladesh for the beauty conscious females, it also promotes the brand for males and the company proved that, by including world famous male celebrity Shahrukh Khan for their advertising campaign. Unilever Bangladesh Ltd spends a huge amount of money for promoting LUX through TV commercials, newspaper ments and billboards. Moreover it also undertakes small promotional campaigns at different schools, colleges, universities and recreational parks with winners of its Zonal Beauty Contests. Till now promotional activities of LUX has always been successful which has made it a household common name and helped it reach almost one billion taka sale value in the year 2004 Lux has always had the most beautiful women in the film industry endorsing the brands. If we see internationally, there have been Marilyn Monroe, Sophia Loren, Raquel Welch, Cheryl Ladd, Demi Moore, Brigitte Bargot, Natalie Wood, Sandra Dee, Diana Rig, Samantha Eggar, Sarah Jessica Parker, Catherine Zeta Jones, etc. If we see in India, then the first print ad of Lux came starring Leela Chitnis. After that there have been a string of leading ladies – Madhubala, Nargis, Meena Kumari, Mala Sinha, Sharmila Tagore, Waheeda Rehman, Saira Banu, Hema Malini, Zeenat Aman, Juhi Chawla, Madhuri Dixit, Sridevi, Ashwarya Rai, Karishma Kapoor, Kareena Kapoor, Babita, Priyanka Chopra, Katrina Kaif, Mahima Choudhry, etc. In fact, Lux would be perhaps the only women’s beauty soap brand which has had male models endorsing it.

SUBSTITUTION OF BEAUTY SOAP: Recently there is a huge innovation work with a lot of research and development has been carried out. Considering the convenience and their demand soap bar is replacing by liquid body wash and shower gel to some extent. Though this is still in within the upper class people of the society but however it is getting a upward trend and hoping it will be a popular item to all common people near future. To know the trend of this body wash we may go through the following comparative analysis in of convenience and advantages.

BAR SOAP VERSUS BODY WASH: When it comes to deciding bar soap or body wash, the first thing we have to consider that is competitive advantages of one over another. The Benefits of Beauty/Bar Soap Beauty soap has a nice creamy feel between the hands, almost a sensual feel when lathering the soap up to a rich lather. It feels relaxing to rub the bar along the skin, almost as in a form of massage, as you knead the soap in circular movements along your arms or legs. Bar soap has been around for a long time, since the Babylonian days of 2200 BC when they used a combination of cassia oil and alkali to form a sop like substance in a clay tablet. In the 19th century it was promoted to the masses that the link between health and cleanliness was all too evident, and by the 1950's bar soap became a part of our daily hygiene regime. The use of perfumes and moisturizers began to be added to the soap to make it less basic, and more appealing to the consumer, First bar soaps produced were more carbolic and medicated. Manufacturers initially felt that hygiene and disinfectant type soaps were the correct way to go. Nowadays the more scented and moisturized the bars, the quality is better. It's more about beauty and health these days, as opposed to harsh coal tar soaps and carbolic. There are also unperfumed ranges of soap for the sensitive skin, and all manners in between. The Dove range contains the most beautiful perfume, and is extremely moisturizing, it lathers up to a rich soapy lather which makes for a very luxurious wash. So in

a way to use the tablet form of soap for the creamy lather it produces. On the down side, bar soap can be extremely drying to the skin and your delicate facial skin. The Benefits of Body Wash Body wash is soap that is encased within a container. It usually has a pump down action to release the liquid soap, or a squeeze to release action. You will find these great when you are in the bath or shower simply because of their convenience. With a bar soap it can slip and slide all over the place, sometimes ending up deep within the bath water, never to be seen again! And when you do eventually manage to find it is much reduced in size and it very sludgy and slimy. Sometimes it actually leaps out of the bath, and you can spend your supposedly relaxing bath time experience retrieving the soap. Bar soap is an elusive devil when dropped in the bath water, and not practical at all. Body wash and shower gel are hygienic and re-sealable. If they are dropped in the bath, they just float, and with no loss to the liquid soap inside. They are contained so that no harmful bacteria can settle, unlike soap which is left standing uncovered. Body wash is also extremely moisturizing and beautifully perfumed. Essential oils are used in quite a lot of these products, which have very therapeutic qualities, and they also leave a wonderful perfume on the skin. You will like the feel of the liquid wash, and the abundant lather it produces also. Moisturizing properties within our body wash are all important, as our skin needs to be cared for and fed. It's easier to contain these ingredients within a liquid wash as opposed to a bar of soap.

Our Skin From day one skin needs to be cared for. A baby will have it's skin moisturized after it's bath. We need to protect and nourish our skin all through our lives. As we age we will lose our vital moistures and collagen's. The skin loses it's ability to retain water, it loses elasticity, and wrinkles form. To slow this process down, we have to give back the much needed moisture to our thirsty skin. We must put back what we can due to the environmental damage, and ions in the atmosphere causing negative and harmful effects to the skin. If we look after our skin now, we can delay the signs of aging caused by UV rays and free radicals. To nourish, and protect our skin now is an vital investment in our skins future.

So when asking about Body Wash or Bar Soap? You would definitely have to go with the liquid body wash for it's convenience, hygienic aspect and the sheer enjoyment of using it.

The production figures of major toiletries firms over a five-year period suggest that all the major firms have experienced steady growth. Considering the above analysis, Lux beauty bar can be regarded to be in the MATURITY STAGE of its life cycle. But still it will retain the current position for next few decades since it is an essential and frequent using commodity. Though the upper class is switching to liquid body wash but there is a huge people in the middle class and lower middle class where this soap bar is a very popular item for daily washing, bathing, cleaning.

WAY TO EXTEND THE LIFE OF THIS PRODUCT:  Proper communication in of product promotion among the mass people especially the semi urban and rural customers  Value addition on the products in of quality, performance and durability  Introducing new flavors, color and shape according the customer expectation  Sufficient Research work should be done so that the bar soap could be use as a protective care from various germs and infection rather than only cleansing and beautification.

REFERENCE: 1. Bangladesh Enterprise Institute 2. www.unilever.com 3. www.en.wikipedia.org/wiki/Unilever 4. European Journal of Business and Management ISSN 2222-1905 (Paper) ISSN 2222-2839 (Online) Vol 4, No.12, 2012

Assignment on

Product Life Cycle Course Title: Production and Operation Management (POM)

Submitted to: Mr. A N M Shahidullah Course Coordinator- Production and Operation Management

Submitted by: Md. Zakir Hossain Roll Number – PGDIM021 Post Graduate Diploma in Industrial Management

Date: May 2, 2013