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traditional costing
life cycle costing involves tracing costs and revenues of a cost object (i.e. projected life of the cost object).
traditional cost accounting system reports cost object profitability on a calendar basis
PLC shows the stages that products go through from development to withdrawal from the market.
Sales
Profits Time Product Development Losses/ Investments ($) Introduction Growth Maturity Decline
Characteristics
Product life cycle costing involves tracing of costs and revenues of a product over the several calendar periods throughout its life cycle.
Each phase of the product life-cycle poses different threats and opportunities that may require different strategic actions.
Product life cycle may be extended by finding new uses or by increasing the consumption of the present users.
demerits
Benefits
earlier action to generate revenue or lower costs than otherwise might be considered. There are number of factors that need to be managed in order to maximize return in a product.
LUX SOAP
GLAMOUR FACTOR
INTRODUCTION TO LUX:
We all want to be pampered, to look and feel great And that's just what Lux offers you on a daily basis at a price you can afford.
Lux is the brand of UNILEVER INDIA LTD. It has been winning hearts of INDIAN consumers for 80 years. Lux stands for the promise of beauty and glamour as one of India's most trusted personal care brands.
Introduction Stage
Growth Stage
Maturity
Decline Revival
Introduction stage
Lux launched the worlds first mass-market beauty soap in the US in 1924 & had been launched in India in 1929. In the initial stages Lux was introduced in the major cities of INDIA like Calcutta, Mumbai etc.
At that time there was only one competitor of Lux, which was from its own brand LIFEBUOY.
MARKETING OBJETIVES - was to create the product awareness and to attract the customers towards the product. The Lux MARKETING STRATEGIES in the initial stages :
Introduction stage
Product = They offer 1 on product in the market.
Price = In the initial stages of the product, they offer the relatively higher price than their competitor (LIFEBUOY).
Advertising = In the initial stages, they allocate more advertising budget So that more and more customers could be attracted towards the product. The first ambassador, Leela Chitnis. Distribution = was selective and only covers the major cities of INDIA to get recognition in those cities.
Wholesaler
&
Sales
Low sales
Costs
Profits
Negative
Product Strategy
Price Strategy
Use cost-plus
Distribution Strategy
Advertising Strategy
Introduction Stage
Growth Stage
Maturity
Decline Revival
Growth stage
In the growth stage, their sales rapidly started rising. They have expanded their market to the other cities of INDIA. MARKETING OBJECTIVES = The marketing objectives of the Lux were to expand their market to the other cities of INDIA. Another objective was to maximize more market share. MARKETING STRATEGIES : Product = In the growth stage, the company had offered the same product in the market along with new products.
Growth stage
Price = In this stage, the company had changed their price to some extent because of maximizing the market share. Advertising = In the growth stage, they had increased their advertising budget as in the initial stages because of attracting the new customers or to retain the existing customers. Sharmila Tagore, Hema Malini, Zeenat Amaan, Juhi Chawla, Madhuri Dixit, Sridevi Distribution = In this stage, company had expanded their market to the other cities of INDIA. Their distribution channel was the same as in the initial stages of the product. Promotion = In the growth stage, the company had also used the different proportioning strategies to attract the new and the existing customers.
Intro
Growth
Maturity stage
They modified the product by adding some changes in the product. In this stage, few competitors enter into the market like ( CINTHOL, FAIRGLOW, SANTOOR, CHANDRIKA, FIAMA DI WILLS and VIVEL ). The company has expanded their market to almost all the cities of INDIA. MARKETING OBJECTIVES The marketing objective of Lux is to maximize more profit while defending the market share. And to expand the market to all the cities of INDIA. MARKETING STRATEGIES Product = The Lux has made the modification in the product by introducing: Lux Almond, Lux Orchid , Lux Fruit, Lux Saffron, Lux Sandalwood, Lux Rose, Lux International, Lux Chocolate, Lux Aromatic Extracts, Lux Oil and Honey.etc
Maturity stage
Price The Lux products are now available at higher prices in the market, the reason behind is that the companys marketing objectives is to maximize more profit. Distribution = Now Lux products are available in almost all the cities of INDIA. Their distribution channel is same as in the initial stage. Advertising = In this stage Lux advertising has been reduced to some extent because of the more brand awareness in the minds of customers. Recently, they have shown Aishwarya Rai , kareena kapoor & Shah Rukh khan . PROMOTIONAL OFFERS : Like buy 3 get 1 free.
Sales Costs
Peak sales
High profits
Diversify brand and models Price to match or best competitors Build more intensive distribution Stress brand differences and benefits
Intro
Growth
Maturity
Decline &
Revival
Decline stage
The reasons for its decline are : 1. Currency fluctuations: Unilever products are in over 100 countries worldwide, As a result, it is exposed to adverse currency fluctuations. 2. SLOWDOWN: In year 2008 - 09 due to hard economic conditions in INDIA and other countries the sales were highly affected
3. Competition: Lux has been facing competition from HUL itself (Lifebuoy) & from other companies like:Godrej Consumer Products : GCPL, Indias second largest soap maker with 9.2% market share.
Decline stage
with leading brands such as CINTHOL, FAIRGLOW & NIKHAR. Fairglow brand, India's first Fairness soap, has created marketing history as one of the most successful innovations.
Wipro : The presence of Wipro in the toilet soap industry can be seen through their brands such
as SANTOOR and CHANDRIKA. In the southern market of India it is a major market player in toilet soap.
ITC : It entered the segment last year and has made a strong headway in a short time by growing to 1.75% in just five months. With the brands like: Superia, Fiama Di Wills and Vivel.
Sales
Declining sales
Costs
Profits
Declining profits
Marketing obj
Reduce expenditure
Product Strategy
Price Strategy
Orchid touch
Almond delight
Energising fruit
Aqua sparkle
THANK YOU