Product Life Cycle

The Product Life Cycle maps the various stages of development any product undergoes: introduction, growth, maturity to decline/renewal. 

The introduction stage is marked by the launch of the product through its early period. By the growth stage, the product is gaining market share and is developing over its competitors. The product has reached the scope of its market share and customer share by maturity stage and typically the business runs in profit. The decline period is categorised by a irreversible decline in sales. By contrast, a product may be renewed. 

Characteristic of the stages:

Introduction:

(a) The product sales are the lowest and move up very slowly at snail's pace
(b) Highest promotional Stage: During this period of introduction or the development ,promotional expenses bear the highest proportion of sales
(b) Highest Product prices:Lower input and sales absorbing fixed costs.

Growth(a) The product sales are soaring. Awareness of the product is gaining at this stage
(b) Promotions serve to increase customer awareness and profits. It is aimed at building brand

Maturity
(a) Market at peak: Sales at this stage will be in its peak. 
(b) The market will have many competitors; competition is fierce
(c) Companies aim to retain customers and win new customers from rival brands
(c) Promotions aim to maintain customer loyalty

Decline
(a) Brand kills off fringe products that are non-profit making, narrowing down to the best -selling products
(b) Brand brings down costs to retain loyal customers

 

We see here a Product Life Cycle (PLC) model.

Industry Life Cycle

Industry life cycle follows the sames stages. As it comprises all the brands in the industry, the ILC is distinct to each product life cycle. 

Vicks VapoRub's launch in the US was careful proposed to the US market. It was not until 1918, when the Spanish flu broke out, that people used it en masse. The introduction in India was comparatively effortless considering Indians were familiar and comfortable using topical balms and ointments.Surprisingly, however, Vicks decided against promoting itself as an all-purpose balm, as was possible, as had its competitors. It positioned itself as a Cold and Flu relief OTC.

Introduction Stage - Early 1950s

Vicks VapoRub was introduced in the marketed in 1951 as a function-specific balm - a cold rub. There were many competitors in the market from herbal and home remedies to all-purpose ointments and balms and prescription medicine. Vicks' direct competition were Amrutanjan and Zandu (namely) and indirect competition was home remedies. 

Growth Stage - 1950s - 1960s

Vicks was penetrating further. To increase sales and awareness they: 

1. promoted themselves as a winter remedy. (This was the marketing strategy in the remainder of the world). Vicks observed that the monsoon season too could be exploited likewise. There was a heightened need for cold remedies in this season. 

2. attracted the rural market. Vicks VapoRub was not accessible to the rural communities the 19g bottles priced at 2 Rs was too expensive. The company later produced 5g tins for the rural market who were favourably disposed to buying the product. This promoted Vicks in the rural market, much to their success. 

The aim in this period is to increase awareness and market share. Vicks VapoRub had comfortably perpetrated most of the Indian market by this time. 1970s were also spent attracting customers who had not yet engaged with the product. By then most users of alternative remedies were switching to Vicks.  

Maturity Stage - 1970 - present

1.Class Differentiation - Indians perceive a differentiation that is strengthened by brand loyalty

2. Diversified innovative products –  Vicks had expanded in product range

3. Vicks owns about 50% of the market - it is P&G's best selling brand in India

Possible Threats to Vicks VapoRub[1] in future
 1. Increasing availability of prescription strength OTC

 2.Top pharmaceutical players are joining forces
 3. Expiration of patents

The task now was to maintain this position.

Renewal Stage - Present 

Vicks is continuously expanding its range of products that it is renewing its brand image as a comprehensive store supplying Cold/Flu/

Assessment of Porters Five Forces - To Study Dynamcis 

New Entrants pose less of a threat as[2]:
1. They are low
2. Vicks owns a large market Share
3. P&G invests heavily in R&D
4. Vicks maintains a strong relationship with retailers

Substitute Products are an increasing threat as product differentiation (between Vicks and other products) is narrowing. This is because they provide the same relief.

Vicks VapoRub is doing very well in India, if the market shares are anything to go by. However, to remain in the market, it must bring differentiate itself once again from all other substitute products. The Indian Vicks VapoRub market is quite mature, but soon enough substitute products available in Western countries will become available in India. In that even this rub will run the risk of dying.

---

[1] http://prezi.com/y7jqpwyeyy8w/vicks-vaporub/

---

[2] Ibid <http://prezi.com/y7jqpwyeyy8w/vicks-vaporub/>

Consumer Buying Behaviour

Consumer Buying Behavior studies explore how individuals, groups, and organizations select, buy, use, and dispose of goods, services, ideas or experiences to satisfy their needs & wants.

A consumer’s buying behaviour could be influenced by all kinds of factors: cultural (cultural and subculture roots and social class); social( with reference to family, social roles and status); or personal (to do with age, stage in the life-cycle, occupation, economic circumstances, lifestyle, personality and self-image). The process of buying is influenced by these factors, and indeed other customers!

Depending on their circumstances, customer can be initiators, influencers, deciders, buyers or users.

And this interests marketers, who map the customer’s profile in order to streamline their product marketing.

Vicks VapoRub, therefore is positioned as a premium brand, albeit accessible to all economic belts. In ---, Vicks welcomed the rural market into it's customer population by selling 10gm tins. These tins were received skeptically at first, but soon went on to sell like hot cakes! As it stands, “The largest penetrated cold medicine in rural India is Vicks.[1]” A doubtless wise decision. This point will be revisited in the next post.

But How do Consumers Buy?

Consumers follow what Kotler describes as the Five Stage Model of Consumer Buying Process.

Need Recognition

Step one is need recognition - when the customer recognises a problem or need caused by by an internal or external stimuli.

Vicks VapoRub is relied on the health need of consumers. Colds and Flu don't (generally) have curative medicines, so people rely on symptom relief. Families would want to ensure their children are not suffering from colds and coughs so they will want immediate relief - Vicks banked on this need.

Vicks entered the Indian market after years of success internationally. Its entry impressed on people's minds' the specialised role Vicks played in relieving cold discomfort, as opposed to other balms that served general functions. Vicks slowly widened its product pool to include other products along the same principle.

Vicks continues to satisfy the same need - of cold relief - and capitalises on this desire of the parent to aid his child. 

Information Search

At This stage, the consumer is engaged in two levels of search. The first is milder, called heightened attention and the next level is active, called information search. While in the former scenario a consumer is more conscious about a product and therefore is receptive about it, in the latter scenrio the consumer actively seeks information himself. To aid in the process, important sources of information for consumers would include: personal acquaintances,commercial groups like ads,websites,salespersons etc, public media and experiential group.i.e the handling,examining, use of the product

Option Evaluation

At this stage the consumer is conscious of the values delivered by each product in consideration. He weighs each individual product alongwith its association values minus its cost. 

Purchase Decision

Just as the customer sets out to purchase a product, he is sure to have formed preferences among the brands. He may choose to buy the brand he prefers best.

To execute his decision, the customer passes through the following spheres.

·                                 Brand (Vicks ,Amrutanjan etc)

·         Dealer( dealer 1,dealer 2)

·         Quantity (one tin/tub)

·         Timing (at the time of illness, before, in the monsoon season, other seasons)

·         Payment method (cash,credit card)

The product bought may not be the product 'sought' for different reasons: availability of a new offer, clearance sales etc. 

Postpurchase Behaviour

A product is successful when the customer is delighted or satisfied with it. On the other hand, a dissatisfied customer not only spreads bad news about the brand,but also moves to a competitive product.

Vicks VapoRub is a successful product given its large market share and popular image. 

The Different Product Levels to Vicks VapoRub

CORE BENEFIT :- Vicks VapoRub is a cold and flu relief ointment providing healing and relief

BASIC PRODUCT :- Vicks VapoRub is packaged in tins and tubs beginning 10mg upwards. It has a pleasant, methanol fragrance, non greasy texture and is convenient to use and handle. 
 EXPECTED PRODUCT :- Vicks VapoRub provides instant relief and six benefits in one. It is easy to use.

POTENTIAL PRODUCT :- Vicks VapoRub could possibly come in gel form. A Vicks VapoRub ointment that leaves little no grease at all will  be an improvement.

Market Structure And Competition

Vicks VapoRub has been in India for 60 odd decades, in the Fast Moving Health and Goods category. It pioneered the Over-the-Counter Cold rub in India and is currently the leader. At the time of its entry, precription medicines, balms and home remedies were Vicks' competitors:

Today Vicks competes against against the following cold rubs:

Amrutanjan

Amrutanjan offers a range of cold and flu products, including cold-relief balms, nasal sprays, cough syrups and mints.

Zandu Balm

Zandu balm presents itself as a composite Ayuredic treatment for cold. It helps relieve not only colds but headaches and body aches.   

Aside from these (and lesser known products) all other competition to Vicks VapoRub is indirect. The other products offer a different set of values to the customer. 

These products range from medicated skin treatments, cough syrups and drops, digestives, health supplements to Ayurvedic treatments and home remedies. 

-        

It is often the case that Vicks is used as a supplement to all alternative treatments. 

Vicks Success:

Vicks is claimed to be the largest market share in the cold rub category. Indeed it is the largest penetrated cold medicine in rural India.[1] This is an interesting point to note as it is intuitive to think that rural India would take to ayurvedic treatments and home remedies over a premium product. Vicks' decision to make small tins (of 5g) allowed more people to buy these without spending a lot in one purchase - making it a value-added good for the rural population. 

The first real success of Vicks in India is on account of the following:

1. Introduction of the Cold Rub category (until then all other balms were multi-purpose)
2. Category pioneer
3. Change in customer loyalty
4. Gives the same quality relief over the years, or has improved
5. Same product offers many benefits

[1] http://articles.economictimes.indiatimes.com/2011-06-17/news/29670073_1_olay-head-shoulders-pampers

Customer Value

Customers of Vicks VapoRub seek the following:

1. A cold rub

2. One stop relief from cold symptoms

         a. Clearing blocked nose

         b. Cough relief

         c. Body ache relief

         d. Head ache relief.

         e. Relaxing muscle stiffness

         f. Easing breathing difficulty.

3. Convenient - small size, easy to carry, readily available

4. Affordable
5. Other Benefits - less greasy and smells better

At this stage, there is little differentiation between Vicks and its competitors. 

An Introduction

The American Marketing Association offers this definition to marketing:

“Marketing is the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large.”[2]

The Vicks Timeline - A Century of Caring

Vicks VapoRub falls in the category of Over-The-Counter medication for Cold and Flu. It is a leader in this category with the largest market share in the OTC category.

Lunsford Richardson, the maker of Vicks first produced a salve for pneumonia in the 1890s. He reworked his model until he came up with the VapoRub, as we know it. The Spanish flu in 1918 sky-rocketed Vicks' sales and over-night it became a success.

Vicks' entry in the Indian Market was in 1951, and was later purchased over by Procter & Gamble... it has since been the leader. [3]

...This familiar aromatic cream in blue and green tins and tubs toppled over Indian brands (in the same category), Auyrvedic medicines, tablets and home remedies. 

All because it positioned itself just right.
                                                         - Gurcharan Das,
                                                            Marketing Controller
                                                            Richardson Hindustan Ltd

***

This diary will document Vicks VapoRub's interesting story on the highs and lows, market blues and greens and the legacy and vision Vicks offers its customers. That is to say, I hope to apply the lessons learnt in our Marketing Tutorials to this blog.

[2] http://www.marketingpower.com/_layouts/Dictionary.aspx?dLetter=M

[3] http://www.vicks.co.in/about/