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It has been well established that the Product Life Cycle (PLC) concept has a significant impact upon business strategy and corporate performance. Since the term was first used by Levitt (1965 ) in a Harvard Business Review article “Exploit the Product Life Cycle” the concept has been widely accepted and applied by marketing practitioners all over the world. The product life cycle concept is one of the most quoted and most frequently taught elements of marketing theory.
According to Mercer (1993: 269) the influence of the product life cycle can be seen in other theories, from new product development, positioning & differentiation and portfolio analysis. Since its adoption by marketing, the product life cycle (PLC) has achieved universal acceptance because of its appeal and wide application. According to Weber (1976: 12) the product life cycle concept provides an intuitively appealing and readily understandable framework of analysis for considering future growth opportunities and pitfalls.
As time passes sales increase slowly at first (introduction phase), then more quickly (growth phase), then once again more slowly (maturity and saturation phases), and finally decrease (decline phase). This assignment discusses the importance of repositioning and differentiating for an organization’s products or services using the concept of Product Life Cycle (PLC). It also critically analyses the actual practice an organization undertakes to repositioning or differentiating it products.
Based on the critical analysis a set of recommendations are provided for the selected organization to improve its overall positioning & differentiating efforts during the various stages of PLC. Within this context, the organization that is selected is Bahrain International Retail Development Centre (BIRD) which is one of the leading corporate training providers in Bahrain. 2. Discussion 2. 1 Description of the selected organization- BIRD Bahrain International Retail Development Centre (BIRD) is a sister concern of Bahrain Duty Free. It is a joint venture between Bahrain Duty Free & Air Rainta International, set up since 2001.
It is one of the leading corporate training providers and broadly caters to Management Development, Retail, Customer Service/Sales, Purchasing & Supply Management & Business English training areas or categories. Within each of these training areas or categories it provides a range of courses that are tailor made training programme to assist the participants in their professional development right from entry to higher levels. In addition to customized training programmes, it also designs & delivers a range of open programmes workshops on relevant topics/ areas on a regular basis.
BIRD in the last seven years approximately has successfully conducted a range of such effective training programmes for leading organizations in Bahrain such as Bahrain Duty Free, Batelco, Bin Hindi, Y K Almoayyed & Sons, Al Hawaj, Jashanmals, National Motors, Al Rashid Group, Garmco and many such leading & reputed organizations in Bahrain. 2. 2 Key issues facing BIRD BIRD has positioned itself as a quality training provider with emphasis of satisfying the client training needs through innovative training programmes that have quality in every aspect right from design to delivery.
However though it is able to meet its client needs satisfactorily it be profitable it faces key competition from other training providers. Further BIRD operates in a price sensitive training market. The entire training market is fragmented with many competitors trying to capture each other market share purely on price. However what needs to be established that whether the training market is mature or BIRD’s products are mature. There are few companies which are actually quality conscious but they are not enough to justify the revenue generated by BIRD.
Majority of the clients or companies want new training at reasonable prices. In addition they are looking for value addition, such that the training is not a cost, but an investment in human resources for their staff. This value addition can be through quality accredited globally recognized training programmes, training needs analysis at no cost or any other consultancy services required by the client. Further the clients or companies are not able to differentiate BIRD’s training solutions or products from others specifically on the basis of quality.
In other words, ‘BIRD’ needs to reexamine and reassess the following issues related to its training programmes – 1. It needs to critically analyze its current positioning & differentiating strategies for each of its broad training programmes or categories specifically which if they are in maturity stage. This should also to be done for the company as whole that is what brand image BIRD has and how do clients perceive it. 2 based on the analysis it needs to explore various repositioning & differentiation strategies for its range of training programmes to make it more effective in the long run. . It needs to establish whether the training market is mature or BIRD’s products are mature. 2. 3 Understanding Positioning & Differentiation Positioning is the aspect of the product or brand actively communicated to the target audience, specifically, its competitive advantage, values and imagery. It is strongly related to the perception and image of the product. When devising a positioning strategy for a product, marketers must establish a unique and distinctive image of that product in the mind of the consumer. This will differentiate a company’s product from its competitors. Kotler, 1998) Similarly Kotler and Keller(2006) define positioning as the act of designing the company’s offering and image to occupy a distinctive place in the target market whereas repositioning can be defined as the changing/modifying the existing positioning to occupy a distinctive place in the target market. Differentiating is the deliberate marketing decision by organizations to differentiate their products on the basis of various dimensions such as product features, benefits, performance, conformance, durability etc. or even its service dimensions such as ordering ease, durability, installation, maintenance & repair etc. Kotler,1998) Whatever dimensions a company selects to differentiate its product it then decides to effectively position it in consumer’s mind. 2. 4 What is Product Life Cycle Concept (PLC)? PLC includes the different stages an organization’s product goes through right from the day it introduced in the market to the day it is withdrawn or declines from its market. It includes four stages- Introduction, Growth, Maturity & Decline. (Kotler, 1998) This PLC Concept is usually for a product category (training), a product form (retail training) or product/brand (City & Guilds retail training qualifications).
Typically the product life cycle is a bell shaped curve as seen in figure 1 ,but their can be variations such as growth slump maturity pattern, cycle – recycle pattern and scalloped pattern (Swan & Pinl 1982; Tellis & Crawford, 1981) Figure 1 – Typical bell shaped curve of PLC During each of the stages the product sales, profits, level of competition and number of customers vary and go through different changes, thus pose different marketing challenges, opportunities, and problems to the organization (Kotler & Keller, 2006)
The pattern of sales, profits, number of customers & level of competition are summarized below – 1. Market introduction stage o high costs osales volume low olow or no profits due to high developmental costs ono/little competition – competitive manufacturers watch for acceptance/segment growth losses odemand has to be created ocustomers have to be prompted to try the product 2. Growth stage ocosts reduced due to economies of scale osales volume increases significantly oprofitability opublic awareness competition begins to increase with a few new players in establishing market oprices to maximize market share 3. Maturity stage ocosts are high to maintain market share sales volume peaks oincrease in competitive offerings oprices tend to drop due to the proliferation of competing products obrand differentiation, feature diversification, as each player seeks to differentiate from competition with “how much product” is offered osales are high but profits are low 4. Decline or Stability stage ocosts become counter-optimal osales volume decline or stabilize oprices, profitability diminish profit becomes more a challenge of production/distribution efficiency than increased sales. (Kotler,1998;Kotler & Keller,2006) 2. 5 Positioning & PLC The maturity stage tends to be longer than the previous stages and poses big challenges to marketers. This is the stage the marketers need to mange the most otherwise the product will move into decline stage which is not desirable. According to Kotler & Keller (2006) the organization has various options- 1) Market modification by working out two factors that make up sales volume Volume= number of product/brand users x usage rate per hour
This can be done by expanding the number of brand/product users by connecting nonusers or by entering new market segments and winning competition’s customers. Volume can also be increased by convincing current users to increase their product or brand usage. 2) Product modification: – Sales are also stimulated by modifying the products characteristics through quality, feature or style improvement. This may also involve repositioning the existing product with improved/ modified changes and then to be communicating this repositioning successfully to the target market ) Other marketing mix modification This includes changing the other marketing mix such as prices, distribution, advertising, sales promotion etc Thus maturity stage is the most challenging stage that needs to be managed effectively so that the product does not loose it market share or enter decline stage. According to Kotler and Keller (2006) the company’s overall positioning and differentiating strategy must change over the various stages of PLC. When products reach maturity they are well known.
However, as competing products enter the market; mature products can begin to look old and tired. Action must then be taken to refresh the product’s image or repositioning. This repositioning can create new appeal for existing consumers or attract new consumers. Business 200 Case Study (http://www. business2000. ie/cases/cases_9th/case7. htm) 2. 6 Critical analysis of BIRD’s product in terms of PLC stage & positioning strategies 2. 6. 1Applying the PLC concept majority of all BIRD’s training programmes are in mature stage, other than the Purchasing & Supply training programmes.
These Purchasing & Supply training programmes which are offered in association with Chartered Institute of Purchasing & Supply (CIPS) were introduced this year (2008) and are thus are in introductory stage but if considered from overall training market, these training progranmmes are already existing in the market, being offered by many competitors. Thus the market for these programmes is mature & highly competitive. 2. 6. 2 The retail training programmes which are the main revenue generator are two fold –globally accredited City & Guilds training programmes and company specific customized training programmes.
Both the kinds of programmes are in maturity stage and they drastically need to be re assessed in terms of being repositioned to consolidate its position in the market. The overall market for these is also some what late growth stage transiting into mature stage. 2. 6. 3Other training programmes such as Management development & Customer service / sales are more or less in similar stages as retail training but probably more competitive. 2. 6. 4 Business English training programmes is in maturity stage and the overall market for these products is also in maturity stage. 2. 6. The overall image or positioning of The BIRD as a quality training provider is well accepted in the market palace but it can be enhanced further and communicated and understood clearly by its clients. 2. 7 Recommendations Based on the above critical analysis following recommendations have been provided for BIRD- 2. 7. 1 Product modification As regards its Purchasing & Supply training programmes, since it is in introduction stage it needs to create more awareness about its programmes and position them on the basis of quality such as qualified trainers, suitable class timings, quality infrastructure- class room, pantry etc. nd other issues related to training. Every thing related to training programmes specifically all the elements of marketing mix should spell out quality so that the positioning is clearly communicated and understood by its target market. Regarding its retail training programmes specifically for City & Guilds it should continue to position it as quality programmes with clear emphasis on its accreditation from City & Guilds. Regarding the customized training programmes it should emphasize on BIRD’s experience & expertise in delivering these programmes.
For its management development, customer service / sales & Business English courses it needs to reposition and make them value added without compromising on quality. This value addition can be providing detailed pre course and post course evaluation, training needs analysis( TNA ) if cist allows and any other elements of training that the client value. This repositioning with changes in the product need to be communicated effectively to the target market is able to understand and appreciate this repositioning. . 7. 2 Market expansion & modification As regards the overall positioning of BIRD as one stop training solution provider for its client which means they should consider BIRD for all their training requirements in all areas. This will increase the market share of BIRD and also the raise the bar of BIRD as quality training provider in all areas. This will also provide market expansion and modification increasing the number of clients and their volume of business as well. 3. Summary
This assignment established that an organization products go through different stages and each stage needs to handled differently as regards its positioning &| differentiating strategies. Maturity stage is the most crucial stage and thus is the most challenging for an organization. The critical analysis of BIRD’s products established that most of its products are in mature stages operating in more or less mature markets. As a result a set of recommendations were provided to effectively improve the overall positioning as well as individual positioning of broad categories of training programmes
References •Levitt, T. (1965) Exploit the Product life cycle: Harvard Business Review: Vol. 43: Nov- Dec:pp 81 -94 •Kotler, P. , (1998), Marketing Management – analysis planning implementation and control, (9th ed. ), Prentice Hall, Australia •Kotler, P. & Keller, K . L. (2006) Marketing Management: 12th eds:Pearson Education Limited: Upper Saddle river: New Jersey •Business 2000 case study: Extending the product life cycle through repositioning (http://www. business2000. ie/cases/cases_9th/case7. tm) •Weber, J. A. (1976) Planning Corporate Growth with inverted product lifecycle: Long range planning: Oct: 12 -29 •Mercer, D. (1993) A Two decade test of Product life cycle theory: British Journal of Management: Vol4: Issue 4: Dec: 269 – 274 •Swan, J. E. & David, R. R. (1982) Fitting Marketing Strategy into varying product life cycles: Business Horizons: 72 – 76 •Gerald, J. Tellis & Crawford, C. M. (1981) An evolutionary approach to Product growth theory: Journal of Marketing: Fall: 125 – 134