Product Life Cycle (PLC): Strength and weakness

Product Life Cycle (PLC): Strength and weakness Introduction: Marketing is a process which is based on communication and whereby individuals obtain what they need through others creating or exchanging products and value with them. For companies to sell their products, marketing is the most important factor to reach out to customers as Kotler Armstrong, (2008) define. This essay presents the product life cycle and focuses on its strength and weakness points. The concept of Product Life Cycle (PLC): Product life cycle (PLC): is an idea from cradle to grave and considered sales record of a product time. PLC has four hypotheses: 1. a limitation life of products, 2. each phase has its own different features such as: methods of sales, 3. profits variation throughout the life cycle, 4. strategic methods used at each stage differ (Bennett, 1995 Thetimes100, 2009). The Stages of PLC: PLC has five stages 1. Development (pre-Launch), 2. Launch (Introduction), 3.Growth, 4.Maturity (Saturation), 5.Decline (Thetimes100, 2009). The development phase: In this stage, a firm has an idea and tries to make improvements to it, which is done by employing the researching skills for that purpose. This usually costs a lot of money in designing, production, advance promotion and if there were no sales, there would be no profit (Mark, 1998). The introduction phase: If the product agreed on, which a firm has decided to launch was its own innovative, unique one, normally, in this case, chances are less that any difficulty get in the way, especially and mainly from competitors. It remains at the beginning of this stage from the 4 Ps mentioned previously: promotion and place. A firm needs to create awareness, encourage sales, advertisement, public relations, and most importantly develop an image (Mark, 1998 Netmba, 2009). The growth phase: When a product achieves success, competitors will have reaction that entering market as quickly as possible. As a result promotional cost would increase in this stage for the sake of persuading consumers that the product of ours is better than other competitors (Mark, 1998 Netmba, 2009). The maturity phase: Competitors are rising sharply in the market and there is no space in for new copartners. Firm at this stage will exert all promotion options to preserve its brand loyalty within its own customers. However, at this stage sales and price begin fall down in the same time there are a large several of versions of product. By using different approaches competitors will detach part of market from the firm (Blythe, 2009). The decline phase: This is the stage leading towards the end. In other words, it is the stage where the death of the product begins to take place. There are a small number of balance sheet promotion sections which could manage it with. As much as the firm can keep its product on the life, it will still be able to earn some money. However, in this stage, varieties of versions are not available and the price might need to be raised (Blythe, 2009). â€Å"In fact, most decision to eliminate products is made on the basis of intuition and judgment rather than any formal analysis† (Blythe, 2009.pp:81-82). Strengths of the PLC. When used alongside analysis of sales figures and forecasts, PLC can be a powerful tool in providing guidance and marketing tactics that are appropriate at a particular stage (suite101, 2009). What are the keys of succeeding? Clearly, to allow a product to succeed and penetrate the market, it has to fulfill the needs of a sizable number of customers. With new products, this usually occurs automatically when the product possesses some new features which cannot be found in other existing products. Improvement in operation and technology is another cause of success (Dibb et al., 2006). Weakness of PLC. Even with using the PLC diagrams, there is no way to predict the length of each phase that the product is going to stagnate at. Furthermore, neither can it be used in forecasting accurately. These are the main failures and weakness points of the PLC model (Know this, 2004 mind tools, 2009). What is the fatal mistake which marketers do? Why do some products fail? The critical major mistake that marketers may neglect is when the product they introduce to the market does not meet the needs of the customer. This occurs for any of the following reasons: 1. the product does not offer value and therefore fails to progress in the marketplace. 2. The branding is ineffective or not well known. 3. Sometimes, the mistakecan be within the design. 4. In some other cases, technical problems appear. Moreover, Distribution and overestimation of the market size problems are considered a huge mistake which marketers can possibly commit (Dibb et al., 2006). What are the internal and external factors have effects on PLC? There are many features which effect PLC and the vital of them Product decisions and Consumer behavior. Product decisions (Internal factor): Product decisions include those intended to have an effect upon the firm primarily, then product, its sales, and, hence, its lifecycle and not related directly to the consumers. This is so clear in the example of Coca-Cola case below. Consumer behaviour (External factor): Decision making process elements are considered many three issues: First: Personal characteristics: personality, lifestyle, motivation, beliefs, attitudes, and perception. Second: Circumstances of the buyer: gender, age, family, life-cycle, income, and education level. Third: Social environment: culture, reference groups, and social class (Hill OSullivan, 1999). These are out-of-control factors that a firm has no hand on. They affect the life cycle of a product and given the name, external factors. In fact, this is not precisely the case. Because this is mainly more related to the customer buying that very product, a fair look at psychology can be devoted here to face any of the problems caused by any of the above factors. If looked more closely at the nature of this situation, one finds that it is concerned with decision-making process area of psychology. As soon as a consumer makes the decision to buy that product, which is what marketers look forward to, the business will begin a nd the product introduced will continue going through the stages to live its cycle. The external factor effect should be clear in the Kelloggs example later (Hill, OSullivan, 1999). Coca-Cola case study In this case study, it will be shown clearly that some of the products dont even reach the growth or the maturity stages but straightforward towards the declining stage. This was when Coca-Cola thought to launch its own bottles of water in 1993. â€Å"Dasani†, was the marketing name of the product. In the UK, what happened was that the factory had contaminated the bottles with what a cancer-causing chemical called â€Å"bromated†. This is different from the chemical substance â€Å"bromide†. The factory was using the tap water which comes normally from the Thames River. Then, this is being purified using the reverse Osmosis method of purification. After, this purified water is added to a batch of â€Å"Calcium Chloride (CaCl2)† and â€Å"bromide†. When Ozone gas is pumped into that batch, the bromide will be oxidized to â€Å"bromated†. This was mainly the reason for Coca-Cola to divest this kind of a product. Apparently, for this reason, the water of Thames River is being monitored to check the existence, or the concentration for that matter, is below the 10 micrograms per litre. This clearly shows how the internal factor effect here led to the end of the product (Dibb et al., 2006). Kelloggs Nutri-Grain Case study: In 1997, Kelloggs has achieved successes for approximately fifty per cent, which was part of the growing a puffed rice of market Perform in short time less than three years. Until 2002, sales continued growing and increasing within new improvements of flavour and ingredient to the original product. Nutri-Grain, as an example, grew gradually to be identified and recognised by the customers themselves. Nutri-Grain has changed customers understanding from missing breakfast to become a health daily snack. All Bran bars and Alpen bars are the main competitors of Nutri-Grain yet the interesting issue about the two is that both are from Kelloggs itself. However, there are others producing similar products to Nutri-Grain which slightly caused cutting of total profits. Each product of Kelloggs itself has a life cycle, some of which spend months within one stage and others, such as: Nutri-Grain spent years in only the growth stage. In the middle of 2004, Kelloggs noticed that Nutri-Grain sales started falling and losing its position. Meanwhile, the rate of market reached 15% of growing. It is obvious that Kelloggs should choose one of two decisions, either to withdraw Nutri-Grain or add some improvements to it to return it back to life (Thetimes100, 2009). Evaluation Simply, an analogy to the PLC is the life of a being. The living being starts developing from the moment it is born. Next step comes the stage of growth when it becomes a youth through towards maturity when it becomes adult. Finally, it dies which is similar to the withdrawal of a product from the market but before that it gets old; its sales show a decline. Having stated that, it shall be clear as to why be it that not all the products come through the lifecycle phases in the same pattern! As figure number 1 shows: The above plot shows the general typical life cycle that virtually every product should go through if no obstacles were on the way but the pattern differs. As expected in the research and development stage, the sales are zero since the product is not introduced to the market yet. Then, once it is introduced, the sales will begin and this is shown on the graph as sudden rise forming a curvature upwards shape. The rise continues until the stage of decline is reached and this is represented as a downward curvature shape indicated that the sales have fallen. In the development stage, small firms and big firms are not equal in terms of the precautions and the initiatives they take and so for the new and old companies. New Companies are more vulnerable to suffer from the consequences that the old ones and the reason for that is that the old have far more experience than the new firms. Big companies have a strong finical base which allows them to fight in the market with no fear. As have been stated above, in the introduction phase section, that the awareness and sales encouragement and more importantly the advertising is done actively at this stage. Doing the same kind of comparison between small and big firms, the latter have a variety of products in its production line which, in turn, adds a huge space for marketing activities such as, making ads about two or more products of their own, in other words, promotional effect dominates more than in the small firms. After passing the first two stages and the product reaches the growth stage safely, competitors reaction did not exist, both of the small and big firms are equal. However, if their reaction was catalyzed and competition was prevalent, they are not similar in the sense that the potential of each differs. As result, the course of action of each will be different and each will reap the harvest of competitors reaction differently, in accordance to their potential. Some products, although reach their decline stage, do not believe in what is called the decline phase and getting old. As a result, they overcome this problem and regain their position and popularity after taking the necessary strategies. This normally occurs when a little innovative tweak, be it a promotion, or an additional feature that is applied to the existing product. To reinforce the point of weakness mentioned earlier about the model that it fails to predict the exact time a product will spend at a certain stage, a set of examples are presented and exposed to evaluation. One of the examples is clothing. Cloths cannot be handled, to some extent, somehow to extend its life cycle as it is down to the fashion of the year. So, normally this kind of product lasts for no longer than a couple of months up to a year. (Know this, 2004) On the contrary, products like cars or bells live longer and can be trusted for at least five years or even more than that. These products life cycle, unlike the cloths, can be extended Products in between are prone to societies. A typical example is mobile phones. In some communities, people consider the mobile phone as fashionable item that is changeable each time a better, newer one is launched to the market. Others are fulfilled with it as being merely a mean of communication and that it is hard to do its job. Internal and external factors are equally as important. It has been seen in the example above how exceeded legal limit of bromate of a bottle of water has led Coca-Colas product towards death directly from the introduction phase; internal phase. Similarly with Nutri-Grain, Realistic snackers interest in healthy food, and it being the only healthy product have forced Kellogs to revitalize Nutri-Grain, external factor. Conclusion: PLC is a brief description or representation of a life cycle of a product in terms of graph. It is one of the powerful analysis tools in business generally and in marketing specifically. PLC mode can imply the possible strategies to be pursued in order to extend the life cycle of the product having known the stage at which the product is at standing. It can be concluded that in order to overcome this external factor, a marketer needs to play with the elements of decision-making process. By the death of the product, a complete description of the whole life of the product will be provided by the PLC model that can be used later on in the research and development stage of a new product. Business Culture Differences: USA and France Business Culture Differences: USA and France Globalisation has prompted many researchers to conduct intercultural studies. This report analyses the case of Southern Candles Tour De France and identifies several cultural differences. The ideas of Halls cultural model and Shannon-Weavers communication process will be presented with cultural issues. INTRODUCTION The purpose of report is to recognise the differences of business culture between U.S. and France and how they influence the cooperation of Southern and Belles companies. This report will be divided into three four dimensions. The first section presents a sequenced identification of cultural issues in the case. Theories of Halls and Shannon-Weaver models will be defined in the second section with clear tables and figure. The third section contains of some viewpoints about how the cultural issues relate to the chose models. Various perspectives of suggestions will be included in the last section. MEETING STRUCTURE Based on the research (1), the French prefer to have a flexible meeting and often change the plan easily, whereas, the Americans prefer to have a formal meeting and often adhere religiously to the plan (2). The conflict of meeting structure can be described as a cultural distinction. Conversely, this conflict can also significantly affect the positive impression of companies. For instance, the Americans may think that the French do not respect the meeting, and the French may think that the Americans are not creative. LUNCH TIME Another cultural issue between U.S. and France can be observed while Durand and his team members spent twenty minutes into meeting but used two hours break time to have a hot lunch. According to the research1, the Americans can just eat a small sandwich as their lunch and turn back to work, but a hot lunch is essential for the French to fulfill their energy. REACTION At the end of meeting, the reactions between Picard and Durand can also be considered as a cultural issue. U.S. people often present their reactions on surface (3); for instance, Picard gave a quick okay sign to his team members after finishing a well-presented meeting but the U.S. okay sign actually means zero or useless in France (4). Contrarily, the French frequently reserve their reaction and then release their decision after a series of discussion3. For example, Mr. Durand had decided not to corporate with Mr. Picard after two weeks consideration. DRESS APPEARANCE In Frenchs culture, formal dress look is very important at all times particularly in the meeting with high management level5. However, Picard made a mistake of this different cultural issue as only he took off the coat during the business meeting after an uncomfortable hot lunch. NON-VERBAL COMMUNICATION In France, eye contact, handshake, and double kiss are three main skills of non-verbal communication to show their friendly manner (6). In the case, Dubois extended a warm greeting in French to Durand. Nevertheless, the Americans usually avoid physical contact with people and this cultural issue creates an arrogant impression for the French1. WORK AND LIFE SEPARABILITY The problem of work and life separablity can be simply discovered when Picard kept mentioned several times the business meeting earlier in the day, but conversation always drifted back to social amenities. For the view of Durand, he has strong tendency to build lifetime relationship with Picard during the party dinner. However, Picard is accustomed to a short-term business relationship (2). LANGUAGE BARRIER The serious barrier between two central leaders is that they do not have same language to do deeper communication and this problem may have impact on building a trust business relationship. Although Picard has hired Dubois as his representative, the problem of different languages still significantly influences the interaction with Belles. For illustrate, Durand and his team members are repeatedly staring at Dubois because they think that she is the only person to give response so they put more concern on her reaction. LITERATURE REVIEW EDWARD TWICTHELL HALLS CULTURAL MODEL 1981 Hall is an anthropologist and cross-cultural researcher and he developed a cultural model that emphasised the importance of nonverbal signals and modes of awareness over explicit messages7. There are three fundamental dimensions: CONTEXT HIGH CONTEXT AND LOW CONTEXT Hall adds that high context communication or message is one in which most of the information is already in the person, while very little is in the coded, explicit, transmitted part of message. A low-context communication is just the opposite, that is, the mass of the information is vested in the explicit code7. The following table shows the characteristics of Halls high context culture and low context culture3: HIGH CONTEXT CULTURE LOW CONTEXT CULTURE Much convert and implicit message Much overt and explicit message Reserved actions Reactions on surface Distinct in groups and out groups Flexible in groups and out groups High commitment Low commitment Open and flexible time High organised time TIME -MONOCHRONIC AND POLYCHRONIC Hall explained that monochronic cultures value schedules and can evolve efficient bureaucracies. Polychronic cultures regard events as embedded in more of a simultaneous matrix of occurrences5. The following table gives the characteristics of two different time concepts (2): MONOCHRONIC POLYCHRONIC Do one work at a time Do multiple works at a time Concentrate on job Are highly distractible and subject to interruptions Are committed to the job Are committed to people and human relationships Work is clearly separate from personal time Work is clearly not separate from personal time SPACE (PROXEMICS) INTERPERSONAL DISTANCE Proxemics is the study of the human use of space within the context of culture. People handle space differently the way they do largely determined by the culture in which they are immersed9. Related to the case, only the theory of intimate and social distance will be provided. Intimate distance ranges from body contact to approximately 45 cm. At intimate distance, the presence of the other person is unmistakable (9). Social distance is the casual interaction-distance between acquaintances and strangers and ranges from 120 to 360 cm. Its close phase, 120 to 210 cm, is the characteristic of informal interaction9. The following figure shows that distance of Proxemics concept (10): SHANNON AND WEAVERS COMMUNICATION MODEL 1961 Shannons model of the communication process is a general model of the communication process that could be treated as the common ground of such diverse disciplines as journalism, rhetoric, linguistics, and speech and hearing sciences11. The following figure shows the communication process of Shannon-Weaver model (12): This model consists of 7 elements which are (13): Information source chooses desired message among a set of possible messages which can be mixture of any form of written or spoken, image or sound. Transmitter changes the message into the signal, also known as encoder. Message is the thing which is sent and received and all communication is about. Channel is the path that message passes through from the transmitter to the receiver. Receiver is the reverse transmitter which changes the signal back into the message, also known as decoder. Destination is the target place of the transmitted message. Noise is any unwanted additions to the transmitted signal which cause distortion or error in transmission. CASE ANALYSIS EDWARD TWITCHELL HALLS CULTURAL MODEL LES BELLES CHOSES Meeting Structure In the mind of the French, the meeting structure of U.S. represents low creativity and boring. In the mind of the Americans, Frances meeting structure is not organized and disciplined. Reaction Information is more likely transmitted in indirect way so the reaction is normally reserved. Reaction is normally appeared in a very direct way and also comes up with different signals. Interpersonal Relationship People always have strong boundaries and hard to adapt an outsider as part of their group. People are more flexible to accept outsider or a new culture. POLYCHRONIC MONOCHRONIC Schedule Schedule can be arranged independently if the better achievement can be established. Also, they do not mind to do multiple things simultaneously and always have a great involvement with human relationships since they are more concerned with family and friends. Time is very important as they often complete one project at a time or before the deadlines. Therefore, the Americans may think that time was dispersed with two hours lunch break and the French are not focused on the corporation. Work-life separability The issue of work-life separability also has direct impact on the corporation. Durand tended to create a close relationship with Picard but it was disturbed by irrelevantly conversation. The Americans typically follow the rules, show great respect for private property and less to build long-term relationship. So, Picard kept mentioned the works during personal time is eliminating the potential of cooperation. INTIMATE DISTANCE SOCIAL DISTANCE Interpersonal distance and Non-verbal communication People can accept the intimate distance mean that they often have body involvement with people or strangers. In the case, Durand and Dubois have an extended greeting in French. However, Mr. Picard did not have this action with Durand. People in the category of social distance mean that they have less body involvement with people and always in a common distance to do interaction with strangers. This kind of people usually avoids physical contact with people. Picard who from U.S. is a typical example. SHANNON-WEAVERS COMMUNICATION MODEL Destination Meeting Party dinner Decoder Durand receives the message and decodes the meaning Channel Dubois is the interpreter Encoder Picard sends the message and encodes the meaning Information sources Business proposal Ideas Opinions Noises Error messages, mistakes in translation, Wrong meaning created by interpreter Information source includes business proposal (written message), ideas, and argumentative opinion (spoken message) that were identified during meeting and party dinner. Transmitter is also called as encoder. In the case, Picard is the sender who is encoding the meaning. Message refers to the every information that was sent and received in the communication process. Channel will be the interpreter. For example, Dubois is responsible for translating the meaning for Picard and Durand. Receiver is also known as decoder. In this case, Durand may change the received messages and signals back into his preferred language or meanings. Destination refers to the meeting or the target place to do presentation in the case. Noises may include the error messages and meanings due to Picard and Durand are using different languages. RECOMMENDATIONS MEETING ALERT In France, people will never skip lunch and they are allowed to have lunch at least forty-five minutes at the company cafeteria and ninety minutes at a restaurant 14. Picard should have awareness of the Frenchs office hours and lunch hours and schedule the best time to have meeting. BUSINESS DRESS CODE If dealing with senior management level in France, a formal suit and well business dress code are highly needed15. Social gathering requires tastefully coordinated clothes even the invitation card with states that informal dress15. During the meeting, Picard should sustain his formal dress appearance. CONVERSATION Language barrier between Picard and Durand creates a resistance in their conversation. The best way to remove the barrier is to learn the same language; however, it could not be reached in a short period. There are some tips for Picard to increase the potential of success16: Practice effective communication as much as possible Convey ideas in a positive, clear and convincing manner PROSPEROUS ENTERTAINING Actually, a business meeting is not supposed to be conducted during lunch or dinner. However, sharing a meal is intended to help establish a personal acquaintance17. In France, business lunches are the most common form of entertaining business contacts18. For that reason, Picard can use a business lunch to present his sincerity of cooperation and his respect to the Frenchs culture. PUBLIC BEHAVIOUR In Frenchs culture, some non-verbal communication actions are expected to be performed19. To gain more familiarity with French, Picard should learn some greeting behaviour and avoid some objectionable public behaviors. GIFT-GIVING In France, gifts are expected for social events, especially as thank you after a dinner party20. When Picard was invited to the party dinner after meeting, he should awake that gifts-giving for the host is important to show an honor manner in the Frenchs culture. CONCLUSION After looking the ideas of Hall and Shannon-Weaver, it is easier to understand why problems occur from different cultural backgrounds. These ideas especially help in workplace and international cooperation. The recommendations proposed will provide a guideline on how to cooperate and avoid some unpleasant problems. References 1. http://www.understandfrance.org/France/Intercultural3.html 2. http://hackvan.com/pub/stig/etext/monochronic-vs-polychronic-time.txt 3. http://www.siu.edu/~ekachai/dimensions.html 4. http://www.executiveplanet.com/index.php?title=France:_Public_Behaviour 5. http://www.worldbusinessculture.com/Meals-and-Entertaining-in-France.html 6. http://www.culture-at-work.com/highlow.html 7. Hall, E.T. (1998). Basic concepts of intercultural communication: The Power of Hidden Differences. Maine: Intercultural Press Inc. 8. Hall, E. T. (1983). The dance of life: The other dimension of time. New York: Random House. 9. Hall Edward T.: The hidden dimension, 1966, Doubleday Company, Inc. 10. Tool for Proxemic research: Edward T. Half, A System for the Notation of Proxemic Research, American Anthropologist, Vol. 65, 1963, pp. 1003-1026. 11.http://www.shkaminski.com/Classes/Handouts/Communication%20Models.htm#TheShannonWeaverMathematicalModel1949 12. http://faculty.mdc.edu/jmcnair/Communication%20Theory%20A%20First%20Look.htm 13. http://www.zainbooks.com/books/mass-communication/introduction-to-mass-communication_4_elements-of-communication-and-early-communication-models.html 14. http://www.executiveplanet.com/index.php?title=France:_Appointment_Alert! 15. http://www.executiveplanet.com/index.php?title=France:_Business_Dress 16. http://plushtext.com/6-ways-to-communicate-more-effectively-in-the-workplace 17. http://www.worldbusinessculture.com/Meals-and-Entertaining-in-France.html 18. http://www.executiveplanet.com/index.php?title=France:_Prosperous_Entertaining 19. http://www.executiveplanet.com/index.php?title=France:_Public_Behaviour 20. http://www.executiveplanet.com/index.php?title=France:_Gift_Giving