Product Life Cycle (PLC), Industry Life Cycle (ILC)

PLC: Every product has a life cycle and goes through various stages bearing numerous opportunities and challenges. Different market strategy should be followed by a company at every stage, sales and profits in these life cycle stages vary. Four stages that make a product life cycle are- Introduction, growth, maturity and decline. A product may not undergo all these stages in its life cycle. The different stages of Marico’s Parachute Oil are as described below: 

Introduction: When a product is just introduced in the market, it is in its first stage, the introduction stage. In this stage, most of the cost is spent on promotions to introduce the product into the market and it may not earn profits. A business, before entering the market should have sufficient knowledge about its target customers, sufficient demand for product, risk involved and if they would be able to keep delivering anticipated outcomes in terms of quality and expenses. All of these factors must be taken into account before deciding to launch a new product. A customers begins to induce interest for the product, during this stage. The possibility is that the customer may not accept the product willingly. However, Parachute set foot in the market safely in 1990s.  Fortunately, the hair oil sector was overpowered by unbranded oils. Marico grabbed the opportunity and came up with its brand ‘Parachute’ which also became India’s first branded Hair Oil with attractive packaging of oil in Plastic bottles. Parachute in its earliest days was flourishing in structuring a decent relation with the mass, especially because middle class households was based on the concept of ‘Grandma’s hair care solution’ and ‘100% purity’.

Growth: A product can be said to be in its growth stage, once it has accomplished a place in the market and boosted interest and customers begin demanding for it. There is an increase in sales and profitability in this stage. This stage also has a few challenges. Competition begins to increase and thus it becomes difficult for a product to survive in the market. Parachute also started facing competition from brands like Bajaj, Keo-karpin, Dabur etc. This was a driving force for Parachute to launch new brand variants in other oil types. Around 10 years back, Parachute showed emergence of competitive brands coming up with hair oils of different types like olive, almond, Alma et cetera. Hence, it launched its Parachute Advanced Oil series with non sticky fragrant coconut oil. It certainly improvised on its product to win customers from competitors.

Maturity: Once a product has proved itself in the market firmly as leader, it is said to be in its maturity stage. Parachute has managed to bring about faithful customers for itself. It is one of the biggest producers and leaders in the world for branded hair care products. It recorded a volume growth of 10% during year 2012-13. Hence, Parachute is in its maturity stage with good amount of brand visibility. Now, it should focus on retaining its faithful customers and target new markets. It has already started to expand its international reach covering under explored markets like Malaysia and South Africa. It has also taken over brands from Bangaldesh and Egypt slowing unfolding globally. It concentrates on targeting the youth with its innovative variants and juvenile appeal. It has launched variants targeting kids and middle aged people. It clearly holds the position of a credible brand.

Decline: The product begins to decline and die in this stage. The possible reasons are shift in consumer interest, competition, technological advancement et cetera. In this stage, companies can either rethink their market strategies or policies to reanalyze their product or else can just let it die gradually while while they start working on introducing another product in market. Products in decline are acquired by competitors at times. This can be a good pick if the brand is incurring loss to owning company and company ceases to see any advantage in bringing it back to the market. Marico has roughly a few brands in declining stage and now whose production is stopped. For example, Sweekar Oil.

However, Industry Life Cycle is an apt way of describing the life cycle as it depicted across a particular category. Industry Life Cycle graph can well depict competitions and its effects.