Product Life Cycle
While going through the product report for Alikay Naturals Moisturizing Black Soap Shampoo, it seems that the product stands in the decline stage of the product life cycle. Obviously, decline is the final stage of the product life cycle where a product is about to go out of the market. The major characteristic of the decline stage is that there will be long-run drop in sales due to customer taste changes and increased availability of substitute products (Lamb, Hair & McDaniel, 2016, p.202). This long-run drop in sales would naturally lead to a decrease in revenues. While going through the product report, the sales report makes it clear that the product experienced sales decline for six consecutive quarters starting Q1 of 2015. To illustrate, the shampoo’s sales dropped from 381,009 units in Q1-2015 to 275,776 units in Q2-2016. During the same period, sales revenues declined from $4,572,108 to $3,309,312. Over the time span of these six quarters, the market share of the shampoo dropped gradually from 3.8% to 2.8% (Product report). Therefore, this product is in the decline stage of the product life cycle.
Three Questions
What factors did influence customers to switch their demand to other shampoos?
What is the likelihood of customers suggesting Alikay Naturals Moisturizing Black Soap Shampoo to others (friends and relatives)?
What changes to the product would bring customer attention back to this shampoo?
Product Changes
While going through the User Survey in the product report, it seems that customers are satisfied with some aspects of this shampoo whereas they are not satisfied with some other aspects. Hence, there is no need to replace the Moisturizing Black Soap Shampoo with a new product as an improvement in the product design will suffice. Here, the Alikay Natural is recommended to invest significantly in R&D to improve the product features/quality in such a way to meet the needs of the target audience. Users of this shampoo mainly complain that they do not like the density and consistency of this product relative to other shampoos. In addition, it is advisable for the company to make adequate changes to its product content so as to keep the hair hydrated in a better way. At the same time, the R&D team should try to maintain smell and scalp cleaning capacity of the shampoo. Based on the non-user survey in a target market, the company is advised to make the shampoo more organic and protein- rich in order to meet the changing needs of customers. Another strategy to improve the product is to increase the content of keratin and soy proteins in the shampoo because today a good number of customers believe that these proteins can give a better shininess to hair than artificial foaming agents and synthetic colors (New Product Proposal). Considering that this product is in the decline stage, it is better for the management to cut down its price in order to influence more customers. A majority of the participants in the user survey said that they would continue the regular use of this shampoo if it is available at a lower price.
New Product Development
If I had to recommend one product out of the three given, I would recommend Rochelle and her team to proceed with the development of ‘Alikay Naturals Coconut Protein Shampoo and Conditioner’. The impeccable feature of this product is that it contains organic coconut milk to nourish hair; hydrolyzed keratin to increase hair’s strength and elasticity; and weightless coconut oils to enhance hydration and balance (New Product Proposal).As noted already, the non-user survey findings reveals that current customers would prefer more organic and protein-rich shampoos to other shampoos. In addition, customers think that most of the shampoos currently available in the market are not rich in proteins and hence are not able to provide additional nutrition to the scalp. Most of the participants in the survey also disagreed with the claim that a daily dose of proteins is unsafe and unhealthy for the hair. Another justification for choosing this product is that prospective customers participated in the survey responded that they do not think that shampoos with protein conditioners cannot be used on color-treated hair. In addition, “this thick formula is fortified with Prunus Amygdalus Dulcis (SweetAlmond) Oil, a natural protein that envelops the hair shaft to build strength and elasticity, add softness, reduce frizz, and revitalize incredible shine” (New Product Proposal). Although the product titled Moisturizing Black Soap Shampoo with Dandruff Control also seems to be a potential product, the target market survey indicates that there is a much more need for organic and protein rich shampoos. ‘Alikay Naturals Coconut Protein Shampoo and Conditioner’ represents a sustaining innovation as this product innovation came from listening to the needs of customers in the existing market. In addition, this innovation pays specific attention to meeting predicted needs for future. The reason for choosing this type of innovation is to sustain short-term and long-term business growth through adapting effectively to changing market situations.
Production Methods
Considering that the product is in the decline stage of the product life cycle, I assume that the company is using the lean production method for the Black Soap Shampoo. It is clear that sales volume will be constantly dropping in the decline stage and hence marketers are expected to generate maximum sales during this final stage of the product life cycle. In addition, it is better not to make huge investments in the product during the decline stage unless the marketer thinks that the production is capable of generating notable sales further. Referring to the user- and target-market surveys, the Black Soap Shampoo would not sustain in the market for a long-period. At this juncture, lean production appears to be the best production strategy for the company as this manufacturing technique aims to reduce the quantity of resources used. The lean production method tries to cut down production costs through minimizing the use of labor, materials, space, and time (Modi &Thakkar, 2014). The company might be adopting this production technique to minimize manufacturing costs and to maximize profitability in the short-term. In addition, this production approach seems to be a great way to reduce the quantity of waste and ensure product quality. If Alikay chooses to keep the Moisturizing Black Soap Shampoo and launch ‘Alikay Naturals Coconut Protein Shampoo and Conditioner’ as a“limited time only” trial, it is advisable for the company to use job production method for this test market product. Under job production strategy, production is carried out with the labor of one or a few workers. In addition, this production method avoids bulk and large scale production of goods.
Real-world Application
Currently, smartphone is in the mature stage of the product life cycle. According to International Data Corporation (IDC), smartphone sales growth showed a single-digit for the first time in 2015 (cited in Dutta & Saha, 2015, p.45). The IDC adds that smartphone sales growth in China, the world’s largest smartphone market, would remain stagnant (Thomas, 2015).The primary characteristic of the maturity stage is that sales increase at a decreasing rate (Dutta and Saha, p.45); and this trend is clearly visible in the smartphone market. In this stage of the product life cycle, smartphone companies cannot add new users indefinitely as majority of the prospective customers have already bought a smartphone. It is identified that current smartphone companies give specific emphasis to post-sale service as they strive to highlight their product from others. In addition, a significant price fall in the smartphone market was observed in the last year as this product is nearing saturation. Smartphone marketers are suggested to introduce new innovations in smartphone technology to change the current path of the market.
References
Dutta, S & Saha, D. G. (2015). Mastering Commercial Applications. New Delhi: Vikas Publishing House. Google Books.
Lamb, C. W., Hair, J. F & McDaniel, C. (2016). Principles of marketing. US: Cengage Learning.
Modi and Thakkar. (2014). Lean Thinking: Reduction of Waste, Lead Time, Cost through Lean Manufacturing Tools and Technique. International Journal of Emerging Technology and Advanced Engineering, 4 (3), 339-344.
Thomas, P. (2015). Has the Smartphone Reached Its Maturity Stage? Yahoo Finance. Retrieved from http://finance.yahoo.com/news/smartphone-reached-maturity-stage-144702570.html
