Plc: Cadbury

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The Product Life Cycle concept: Cadbury

The product life cycle model helps marketers identify the different stages that the sales and profits of a product go through during the course of its lifetime. There are five stages to the product life cycle: introduction, growth, maturity, saturation and decline.
1. Introduction: Sales are slow as the product is not yet known. Costs are high due to heavy marketing spend to create awareness. Emphasis is on advertising and distribution. The recently launched Cadbury Snaps range is an example of a brand at the introduction stage.
2. Growth: This stage shows growing market acceptance and increasing profits. Competitors begin to enter the marketplace. The business concentrates on optimizing product availability. The Natural Confectionery Company is an example of brand at growth stage.

3. Maturity: The rate of sales growth slows down as the product has been widely distributed and sold. The company now focuses on creating brand extensions and promotion offers to boost sales. New product research is critical to ensure future sales. The Cadbury Snack range is an example of a brand at the maturity stage.
4. Saturation: Sales slow down as the market becomes saturated. Profits level off and may even decline due to increased investment in marketing to defend against competitors. McDonald’s is an example of a brand that has reached saturation stage.
5. Decline: Sales slow down dramatically and profits fall off. The product may be dropped to make way for new products and the cycle recommences. MG Rover is an example of a brand that has reached the decline stage. The product life cycle is very useful for managers as it can act as a guide for changes in strategy at different stages in the product’s life. However, the concept runs the danger of becoming a selffulfilling prophecy. In reality, not all products (or brands)…...

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