Death is the only universal truth of life. Any living thing born will die one day. The period from birth to death is its lifecycle. The lifecycle has phases like, new born, child, adolescent, adult and finally old. Similarly, marketing follows the concept of product lifecycle.
The various stages in the life cycle of a product are the introduction phase when the product is launched in the market. The growth phase when it is accepted by more and more customers and its sale increase. The maturity phase when the rate of increase of sales slows down and the profitability of the product may begin to decline. Finally, the decline stage when the product does not remain profitable and is removed or replaced by a newer product.
Product life cycle assumes that; companies must try to anticipate new attributes that the market wants; profit goes to those who introduce new and valued benefits early; successful marketing comes through creatively visualizing the markets evolutionary potential.
Marketing Mix has its four Ps - Product, Price, Place and Promotion. Manipulating these Ps will market your product. But can we manipulate the four Ps in isolation and keep flogging and old product and its replacements concurrently? Does profit really go to those who introduce new and valued benefits early? The answer, at least in developing markets is that we can manipulate the Ps and continue to make substantial profits using old products also. Products that replace each other, as per the product lifecycle can be marketed concurrently in the same market as different distinct products. Companies have mastered this art in India.
A trend in the Indian automobile sector brings this out beautifully. Companies do not phase out models. Models which replace each other in Europe or other developed markets are priced differently (manipulating the ‘P’ representing price from amongst the 4 Ps) and positioned as distinct products. The best examples are;
- Maruti sold 800, Zen and Alto concurrently while each was a replacement Suzuki Alto in Europe.
- Hyundai continues to sell i10 and i10 Grande together, whereas i10 Grande replaced i10 in Europe.
- Tata continued to sell Indica and Indica Vista together.
- Skoda continued to sell Octavia and its European replacement renamed as Laura in India.
Not only price. The ‘Place’ can also be manipulated to keep the product alive. Indian may one of the few countries where the emission norms are different for different parts of the country. So, while only BS IV vehicles can be sold in Metros, BS III vehicles can be sold in tier II and III cities. As a result, when the company cannot sell a product in one location, its not phased out. It is just shifted to a location where it can still be sold.