Question

analyze and illustrate the different stages of PLC with PEPSI starting from the pre launching period 1890 till 1980s.

(marketing analysing stages of PLC-5 marks and illustration pf PLC with profit and sales line-5 marks)

Answer 1

Different stages of PLC with PEPSI

• The PLC model is of a point of usefulness to marketing managers, therein it's supported factual assumptions. Nevertheless, it's difficult for marketing management to measure accurately where a product is on its PLC graph.
• A rise in sales intrinsically isn't necessarily evidence of growth. A fall in sales intrinsically doesn't typify decline. Furthermore, some products don't (or so far , at the smallest amount , have not) experienced a decline. Coca Cola and Pepsi are samples of two products that have existed for several decades, but are still popular products everywhere the planet . Both modes of cola are in maturity for a few years.

There are five key stages of the merchandise life cycle:

1. Pre-launch – no sales and profit are made because the merchandise remains in development.
2. Introduction – initial sales are made to innovators, consumers who enjoy trying new products, but these are insufficient to recuperate development costs
3. Growth – sales being to extend rapidly because the product gains popularity among the first majority. It is at this stage that profits are first generated.
4. Maturity – this is often the longest stage and generates the bulk of a product’s sales and profits from the late majority. To ‘milk’ the merchandise for the maximum amount profit as possible, extension strategies are often implemented to pro-long the maturity stage.
5. Decline – eventually all products stop selling, like VHS tapes. As expected, sales begin to say no until the merchandise is not any longer profitable.

At each stage, marketers should adapt their marketing strategies to the external changes within the market place. Let’s take a glance at how PepsiCo have used the merchandise life cycle to successful grow Pepsi into one among the foremost consumed drinks within the world.

Product Life Cycle of Pepsi:
1) Pre-launch – the 1890s

• In 1898, pharmacist Caleb Bradham developed ‘Brads Drink’, a formula designed aid digestion. After strong interest from consumers in his pharmacy, Brad renames the drink ‘Pepsi-Cola’ and purchases the trademark ‘Pep Cola’ for $100.
• The origins of Pepsi are very almost like that of Lucozade, which was also first produced for medicinal purposes.
• Although $100 doesn't appear much, adjusted for inflation that quantity of cash within the 19th Century is like $2516.34 in 2014.
• This highlights the difficulties companies have within the pre-launch phases with surviving periods of negative cash-flow, large research costs and development expenditure
• When a product enters the market, often unbeknownst to the buyer , it's a life cycle that carries it from being new and useful to eventually being retired out of circulation in the market. This process happens continually - taking products from their beginning introduction stages all the way through their decline and eventual retirement.
• The product life cycle is that the process a product goes through from when it's first introduced into the market until it declines or is faraway from the market. The life cycle has four stages - introduction, growth, maturity and decline.
• While some products may stay during a prolonged maturity state, all products eventually end of the market thanks to several factors including saturation, increased competition, decreased demand and dropping sales.
• Additionally, companies use PLC analysis (examining their product's life cycle) to make strategies to sustain their product's longevity or change it to satisfy with market demand or developing technologies

Illustration pf PLC with profit and sales line

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