Step 1: Product Life Cycle
Position in Product Life Cycle
Based on the sales report of 2015 and 2016, the Alikay Natural’s moisturizing black soap shampoo is at the decline stage of product life cycle. A continuous decline could be seen in units sold and revenue generated from the product in last two years. The turnover of the product has started increasing while market share is decreasing with each passing quarter. Decreasing sales volumes, reducing revenues, increased inventory turnover, and declining market share suggests that it might be the beginning of the end for the moisturizing black soap shampoo by Alikay Naturals. Such downturn the market reflects that consumer tastes have been changed or more innovative products are already introduced into the market. The customers might like to buy the product at lower prices as compared to the innovative products or want new improved products meeting their needs and preferences (Sychrová, 2012).
Questions To Understand Product Position in PLC
What are the opportunities available to continue selling moisturizing black soap shampoo at a profit by practicing cheaper production?
Instead of withdrawing the product altogether, is there any way to make a profit at decline by accessing cheaper markets for sale?
How can moisturizing black soap shampoo be rejuvenated by introducing new features and uses?
Step 2: Product Changes
Recommendations to Improve or Replace the Existing Product
Step 3: New Product Development
Product Recommendation
The existing product can be replaced by Alikay Naturals moist black soap shampoo with dandruff control. This new product is an improved version of moisturizing black soap shampoo. It is recommended because it has the features and ingredients that could meet the specific needs and problems mentioned by the customers. It promotes a healthy scalp, reduces dandruff, scalp infection, and inflammation. By supporting a clean and moist scalp, it can strengthen the roots and promise healthy hair growth. Another problem mentioned by customers was the unpleasant scent of the shampoo which can be met by new improved moist black soap shampoo as this new product can be ordered with custom scents mixed in the shampoo with favorable density (Sychrová, 2012).
Type of Innovation
The chosen innovation strategy is the sustaining innovation. The new Alikay Naturals moist black soap shampoo with dandruff control is an improved product version of black soap shampoo prevailing at the decline stage of product life cycle. This innovation type is selected to improve and increase the performance of the existing product which already has established its role in the market. It is less cost consuming as compared to the other new product development strategies. The particular problems and needs collected from the survey of 2000 customers have been incorporated before taking the decision about new product development.
Step 4: Production Methods
Production Method Used By Alikay Naturals
According to the current position of decline in product life cycle, the sales volumes are decreasing after each quarter since 2015. The expected production method is batch production where Alikay Naturals is processing the black soap shampoo in groups or batches. The shampoo in each batch goes through the whole production process altogether. The product report reflects that there have not made any particular changes into the product despite the packaging, so it shows that Alikay Naturals is producing similar items together by using a simple process where all items are expected to go through one stage of the manufacturing process before going into the next phase.
Production Method for Test Market Product
There are still many opportunities available for the companies at decline stage to sell the products at a profit. By evaluating the alternatives manufacturing methods and finding a cost effective and efficient method of production the Alikay Naturals can launch the moist black shampoo with dandruff control for a limited time only. To introduce moist black shampoo with dandruff control as a test market product, the company can utilize the lean manufacturing and share the commitment toward reducing the waste. This can enable the firm to share an image of sustainability and environmental concern which can add value for the customers (Kumar, Kumar, Haleem, & Gahlot, 2013).
Step 5: Real World Application
One of the best examples to explain the maturity stage of product life cycle is the Samsung laptops. The laptop computers have been around for a number of years but with the passage of time a vast variety of advanced components have been introduced which have a strong appeal for tech-savvy market segments. The Samsung laptops have shown a rapid increase in sales and had maintained a peak level, but now the sales have slowed down due to the introduction of tablets, iPads, Microsoft Surface Pro, etc. the Samsung laptop’s costs are declined due to the increase in production volume and the effects of experience curve. The product has met the sales volume peaks, and the market is already saturated. The prices are increasingly reducing as a result of the proliferation of the competing products as the electronics market is highly dynamic and extensively competitive. One of the biggest challenges for Samsung is the innovative products launched by Apple Inc which are state of the art products. Although Samsung is very successfully maintaining a competitive advantage in the industry but it has to utilize the brand differentiation strategies and feature diversification to increase the market share and launch the products that have the ability to compete for the iPads, iPods, and iPads pro.
References
Kumar, N., Kumar, S., Haleem, A., & Gahlot, P. (2013). Implementing lean manufacturing system: ISM approach. Journal of Industrial Engineering and Management, 6 (4).
Sychrová, L. (2012). Evaluation Of Approaches Using The Product Lifecycle. Economics And Management, 17 (4), 1479-1483.
