Product Life Cycle

Product life cycle essentially means:

1. Products have a limited life.
2. Product sales pass through distinct stages, namely – Introduction, Growth, Maturity, and Decline.
3. Profits rise and fall at different stages.
4. Products require different strategies in each life cycle.

As far as Cadbury Chocolates (now under Mondelez India Foods Private Limited) are concerned, let us have a look at how the company has strategized its market presence and growth, from the angle of product life cycle. Mondelez India Foods Private Limited has been in India for over 6 decades, having started in 1948 as an importer of chocolates. Ranked 3rd amongst India’s Most Admired Companies by Fortune India in 2013 and headquartered in Mumbai, Mondelez India Foods Private Limited has sales offices in New Delhi, Mumbai, Kolkata and Chennai and six manufacturing facilities at Thane, Bengaluru, Hyderabad, Induri (Pune), Malanpur (Gwalior) and Baddi (Himachal Pradesh).

Since Cadbury Dairy milk is what we can refer to as the ‘star product’ of the brand, we can focus on it for the ease of understanding. Let us look at each stage of Product Life Cycle individually and relate it to Cadbury Dairy Milk:

Introduction: This stage of the cycle could be the most expensive for a company launching a new product. The size of the market for the product is small, which means sales are low, although they will be increasing. Even though 1948 was the year when Cadbury began its operation in India, Cadbury Dairy Milk was strongly repositioned in the market as ‘the perfect expression of love’ in the 1980s.

• Cadbury embraced the new wave of advertising from that point onward and started taking over the market gradually by communicating that it was ‘the real taste of chocolate’ in the 1990s.
• The country lived through a lot of memorable introductory campaigns by the brand which eventually proved to be path breaking campaigns, like the ‘real taste of life’ campaign in 1994, which helped the brand redefine itself and anchor itself effectively in the consumer consciousness.
• The strategy implemented by Cadbury paid off tremendously as sales volumes grew by over 50%.

Growth: The growth stage is typically characterized by a strong growth in sales and profits, and because the company can start to benefit from economies of scale in production, the profit margins, as well as the overall amount of profit, will increase. Once Cadbury successfully etched its image in the consciousness of the consumers as well as in the market, it was time for it to venture into more aggressive and tricky arenas – keeping the brand value alive and kicking while making it grow further.

• The year 1998 saw the next stage of the brand growth – which was done with a no holds barred aggressive approach of making its way into the hearts, rather, habits of the biggest chunk of consumers – the great Indian ‘middle class’. So began the journey of popularizing the brand in a more social context, using traditional occasions and festivities such as weddings and the multitudes of other festivals that India is all about.
• Right after that came the infectious, catchy ‘Khaane walon ko khaane ka bahaana chahiye’ campaign along with its happy jingle that took the nation by storm. All one could hear on television and radio was this one jingle, which was more than just a song. It was actually successful in making people increase their chocolate consumption habits.
• After that came the award winning ‘Kuch khaas hai’ campaign, which actually achieved the company’s goals of increasing penetration levels and ended up penetrating smaller towns successfully this time, increasing the sales volumes by 40%.

Maturity: During the maturity stage, the product is established and the aim for the manufacturer is now to maintain the market share they have built up.  After Cadbury successfully captured the market and reached the maturity stage, it was time for it to keep the position afloat by reintroducing the brand image in consumers’ psyche.

• Cadbury resorted to the fail-safe option of making Mr. Amitabh Bachchan the brand ambassador and came up with the ‘Kuch meetha ho jaaye’ campaign that till date enjoys the status of one of the most successful and memorable campaigns in India. The campaign can also be termed as fiercely ambitious because now it started taking on the great Indian ‘Mithaai’ market, even though the products are vastly different.
• More innovative campaigns started – such as the ‘Pehli taareekh’ campaign, which is extremely suited to the Indian sensibilities of treating your loved ones to something sweet on the day of your salary payment.
• Another barrage of ads with the tagline ‘Shubh Aarambh’ started which capitalized on the Indian belief system that having something sweet before embarking on something important yields success. It became hugely successful.
  

Decline/Introduction of new product: Eventually, the market for a product will start to shrink, and this is what is known as the decline stage. This shrinkage could be due to the market becoming saturated (i.e. all the customers who will buy the product have already purchased it), or because the consumers are switching to a different type of product.  Though the sales never really went down, as a brand that knows its strategies, Cadbury decided to reinvent itself without waiting for a pitfall.

• A whole new range called ‘Silk’ was introduced, which appealed enormously to the consumers because of its attractive packaging and decadently shot ads.
• Despite the success of the existing flavors of Silk (Fruit and nut, Orange Peel, Regular etc.) Cadbury introduced interesting news flavors like the ‘Caramello’.
• Cadbury went one step further and went on to experiment with textures as well, and introduced the new Silk ‘Bubbly’ recently.