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The PLC concept is very useful to marketers and brand managers for many reasons. First of all, the concept establishes that products follow a life cycle that starts when they are launched, from there they will grow and will, one day, die. However, the most important advantage of this model is that it divides the life of a product in several stages with different characteristics, mostly based on the sales level and growth: introduction, growth, maturity and decline.
This division allows managers to have some insights on which strategies can be taken, according to the behavior of the sales of a product.Also it may help predicting how the competition will act and what will be the future growth tendencies for the product. Nevertheless, it is important to underline that the PLC model cannot predict the duration of the several phases as they vary from product to product. Also there isn? t a completely clear relationship between the sales of a product and the stage it is in. A decline in sales, for example, doesn’t necessarily mean that the product is in the decline phase as the decrease may only be temporary because of exogenous factors.
If it is so, the product can be considered to be on the wrong stage. Finally, the common strategy for each stage may not be the only solution for a specific product. Therefore, caution is needed when planning strategies for each product. 2. How did Lifebuoy strategies in the early stages of its PLC enabled the brand to become a leader? When Lifebuoy was introduced in the market, its positioning was a ” promise to kill germs and keep the body healthy”, addressing one of the main problems the Indian market had: the plagues, and therefore exploring the market need for hygiene and health protection.
Lifebuoy main strategy was to have low prices and low promotion, in order for the ones that were affected by the plague problem, rural and poor people, to be able to purchase the product. These two factors helped the brand to face a high demand since there was still no competition in this stage of the PLC. During the growth phase, Lifebuoy was able to adapt to the environment lived in India, creating advertisements addressing ”hard working, savings minded and economic class of people”. The advertisements were based on the blue collar eeling of hard work and the patriotic feeling lived on the era of post-independence. This lead 70% of the rural population to use the product, as these values were important for them. Also, as the majority of Lifebuoy’s target included rural population, which was incapable of read in English, distinct colors, symbols and pictures were included, so that the consumers were able to distinguish it from the competitors and remained loyal to a single brand.
All these factors helped Lifebuoy to become the market leader during the early stages of the PLC.However it started to lose its position as other competitors entered the market and living conditions in India started to change. 3.
Analyze the stages of Lifebuoy’s PLC during the 20th century. Which factors contribute to move the brand from one stage to another? During the 20th century and until late 1970’s, Lifebuoy maintained the position of market leaders. The company was so dominant that the consumers would perceive any red soap as the brand Lifebuoy, fulfilling the dream of any brand manager.However as the growth phase proceeded and Lifebuoy was having huge profits, more and more competitors were attracted to the market to explore it, which completely changed the panorama in India. As new competitors identified new market niches in the soap industry consumers were confronted with more choices than they were used to, which lead many of them to try new products, creating a decrease in Lifebuoy sales. These factor marked the entering on the maturation phase for Lifebuoy’s carbolic soap.
Also the appearance of colored television in India during the 1980’s changed the way advertising was made, bringing consumers closer to brands. This growing importance of advertisement was not in line with the strategy Lifebuoy had adopted originally, which was centered mainly in low price, low promotion, even more compared to the way competitors were strategizing through marketing and promotion. These moved the product through the maturation phase. The liberalization of the Indian market during the 1990? changed the market upside down. On one hand the market suffered a rapid growth and was introduced to a huge variety of new products that created much more value to the customer by offering freshness, beauty-care, nature-car and deodorant in soap bars besides the cleaning and health body that was all Lifebuoy was offering.
On the other hand the growth of the 3rd economic sector in the Indian economy, promoted the migration from rural to urban areas, shrinking Lifebuoy’s market.It also produced higher income levels, which played a big part in changing consumer needs, who started to prefer more expensive soaps and different products. Consumers start asking themselves: “why would I buy Lifebuoy if all soaps clean? ” All these factors, lead to a steady decline on lifebuoy’s market share, marking the entering on the declining phase of the company’s carbolic soap.
4. How do you think brand rejuvenation is helpful? Analyze how it helped Lifebuoy extend its life cycle. Brand rejuvenation is very helpful when brands enter the declining phase of the brand Life Cycle.Usually brand managers start thinking in strategies to avert the declining of a brand in the life cycle and avoid its death. By doing so they inject new life in the brand by adding new product features, new product types, changing packaging or by changing STP strategies. They can also look at new markets, new targets and new segments.
In the beginning of the 21st century Lifebuoy was completely into a declining phase pushed by its current product portfolio which was also in a decline phase in the PLC.Sales were diminishing because of low-cost producers and an intense price competition, this lead to a decrease to a market share of the mother company, HLL, in the soap business creating a true need for a brand rejuvenation of Lifebuoy. In order to do so HLL adopted a strategy of targeting other segments in the Indian Market but without changing the core positioning of the brand.
So starting in the second half of 2001 HLL launched a group of new products that met new market needs and tastes like skin care products, deodorants, talc, specialized hand wash soaps and so on.These new products aimed different and higher segments in the Indian market and also aimed to shift the brand from a “Male brand” to a “Family brand” instead. However despite all these new products and a shift in targets, the positioning of being a brand whose products would clean all the dirt and also take care of consumers health never changed during the process. So, in order to increase awareness about its new products, about the brand and about the importance of health and hygiene, HLL started to promote public demonstrations in rural parts of India.
These demonstrations aimed to promote changes in the behavior of rural population in things like the importance of hand wash with soap to prevent diseases like diarrhea which was a major killing cause in India. These demonstrations targeted the people that had never used soap before and had a clear objective of creating a change in behaviors so people would start using soap in more situations and more times per day creating more possible consumers and more demand for Lifebuoy’s products.Moreover lifebuoy created a marketing campaign using a famous Indian movie star so it could use that influencer to beat competition changing its marketing strategy to a more aggressive one. These campaigns were a huge success since they increased a lot the goodwill of the Government, the media but above all the consumers which created opportunities to increase the brand loyalty and to improve brand awareness in areas where it was almost unknown and unused. Lifebuoy aimed at the rural areas inhabitants which were a big part of the Indian population and who according to the text were a “multi-trillion dollar market”.
Also It was not so saturated in terms of competition like the urban markets and was a big opportunity in terms of expansion and rejuvenation. In order to prevent another declining of its brand in the future and predicting that the income pattern of consumers would change from a pyramidal model to a diamond shaped model in the future years, HLL started diversifying its carbolic soap to other models and adapting to new possible changes in consumer tastes, not making the same mistake as before.Thanks to understanding of the market Lifebuoy was able invert the tendency of decline it has felt before. The rejuvenation strategy created by Lifebuoy by aiming for new segments and targeting different population, but always maintaining the same positioning led the company to expand to the rural areas, creating more markets, creating more possible consumers, facing less competition and increase the revenues once more.
This brand rejuvenation helped Lifebuoy to extend its life cycle and to overtake a difficult situation.