A

REPORT ON

Product life cycle

OF

Royal Challenge

(A Product of Sabmiller PLC.)

Presented By:-

SATYABRATA KUNDU (09BS0002100)

IBS - KOLKATA

Date of Submission

(1st September 2009)

CONTENTS

Authorization i

Acknowledgement ii

Abstract iii

Introduction to Product Life Cycle 01

About The Company 03

About The Product 07

Other Products of SabMiller 09

Stages of Product Life Cycle 13

Product Life Cycle of Royal Challenge 17

PLC Graph for Royal Challenge 23

Recommendations 24

Conclusion 25

Bibliography 26

AUTHORIZATION

This report is submitted as partial fulfillment of the requirement of MBA program

in IBS, Kolkata. This report is prepared as the internal assessment for Marketing

Management. This project is given by our respected faculty, Mr. Sibhasish

Chakraborty.

Acknowledgement

Words often fail to portray one‘s inner feelings of gratitude and indebtedness to

one‘s benefactor but then it is the only readily available medium through which the

undersigned can express their sincere thanks to all those who have contributed to

this work and learning thereof.

I would sincerely like to thank Professor Sibashish Chakraborty, Faculty IBS,

Kolkata, for his proper guidance and supervision of our work and devoted tireless

effort in making my work better.

I am also highly indebted to my seniors who gave me the proper guidance to go

forward with this project.

I would also like to thank Mr. Mohit Arora, Area Sales Manager, SabMiller PLC.,

Kolkata…for showing his support towards this project.

ABSTRACT

The beer industry in India operates in a challenging environment. Success in such

an environment can only be achieved by constantly reinventing and recreating

practices that adapt to a changing environment.

People who understand that progressive initiatives are critical to the long-term

success of the beer industry and business and who work constantly towards

creating a strong performance management ethos are vital to any company.

Introduction to Product Life Cycle

The course of a products sales and profits over its lifetime is called the product life cycle. After launching the product the management wants the product to enjoy a

long and happy life. Although it does not expect the product to sell forever, the

company wants a decent profit to cover all the effort and risk that went into launching it. Management is aware that each product will have a life cycle,

although the exact shape and length is not known in advance.

The product life cycle is based upon the biological life cycle. For example, a seed

is planted (introduction);it begins to sprout (growth); it shoots out leaves and puts down roots as it becomes an adult (maturity); after a long period as an adult the

plant begins to shrink and die out (decline).In theory it's the same for a product.

After a period of development it is introduced or launched into the market; it gains

more and more customers as it grows; eventually the market stabilizes and the product becomes mature; then after a period of time the product is overtaken by

development and the introduction of superior competitors, it goes into decline and

is eventually withdrawn. However, most products fail in the introduction phase. Others have very cyclical

maturity phases where declines see the product promoted to regain customers.

Not all the product follows this product life cycle. Some products are introduced and die quickly; others stay in the mature stage for a long, long time. Some enter

the decline stage and are then cycled back into the growth stage through strong

promotion or repositioning

The PLC concept can also be applied to what are known as styles, fashions, and

fads.

Style: A style is a basic and distinctive mode of expression. For example, styles appear in homes (colonial, ranch), clothing (formal, casual), and art (realist,

surrealist, abstract).Once style is invented, it may last for generations, passing in

and out of vogue. Fashion: A fashion is a currently accepted or popular style in a given field.

Fashion tends to grow slowly, remain popular for a while, and then decline

quickly.

Fads: Fads are fashions that enter quickly, are adopted with great zeal, peak early, and decline very quickly.

They last only a short time and tend to attract only a limited following. Most fads

do not survive for long because they normally do not satisfy a strong need or satisfy it well.

The PLC concept can described a product class, a product form, or a brand. The plc concept applies differently in each case. Product classes have the longest life

cycles ___the sales of many product classes stay in the mature stage for a long time

.product forms, in contrast tend to have the standard PLC shape.

A specific life cycle can change quickly because of changing competitive attacks and responses.

Using the PLC concept to develop marketing strategy also can be difficult, because

strategy is both a cause and a result of the product‘s life cycle. The product‘s current PLC position suggests the best marketing strategies, and the resulting

marketing strategies affect product performance in later life-cycle stages .Yet,

when used carefully, the PLC concept can help in developing the good marketing strategies for different stages of the product life cycle.

ABOUT THE COMPANY

SABMiller Inc -

The Parent Company

One of the world‘s largest brewers, SABMiller has brewing interests and

distribution agreements across six continents.

SABMiller has wide portfolio of brands includes premium international beers such

as Pilsner Urquell, Peroni Nastro Azzurro, Miller Genuine Draft and Grolsch along

with market-leading local brands such as Aguila, Miller Lite, Snow and Tyskie. Six of its brands a re among the top 50 in the world.

SABMiller plc is one of the largest bottlers of Coca-Cola products in the world.

SABMiller plc is listed on the London and Johannesburg stock exchanges. Over the past 21 years it has grown rapidly from our original South African base into a

global operation, developing a balanced and attractive portfolio of businesses. Our

markets range from developed economies such as North America to fast growing developing markets such as China and India.

SABMiller‘s history is also one of exceptional growth and returns to shareholders.

In the year ended 31 March 2009, the group revenue was US$25302 million and EBITA was US$ 4129 million. This success is equally attributable to the way

SABMiller conducts its business, with respect for partners and employees and a

desire to do the best for its local communities.

SABMiller India is a wholly owned subsidiary of SABMiller plc, one of the

world`s leading brewers, operating across six continents with over hundred years

of heritage.

SABMiller‘s India sojourn began in 2000 and in just a few years, it has cornered

nearly one third of the Indian beer market with brands such as Haywards 5000,

Haywards 2000, Haywards Black, Knock Out, Royal Challenge, Castle Lager and

Fosters.

Based on consumer insights, SABMiller India has taken innovative measures to fill

up the packaging, pricing, occasion and product gaps. Expertise on a global level

has come in use to create many firsts in India including the use of one-way bottles,

flash pasteurization, establishing draught standards, and now Haywards Black — a

genuine stout beer.

With ten world-class breweries strategically located across India, SABMiller is

well positioned to easily access and efficiently service the beer markets. The

Company's commitment to India and ethos of quality is reflected in the fact that it

invested over Rs. 125 crores in the last two years to upgrade breweries in line with

global standards.

SABMiller is a market facing and brand led organization that continuously

refreshes itself in pursuit of its mission of owning and nurturing local and

international beer brands which are the first choice of the consumer.

The company invests in bottles, which are returnable in nature and are accounted

for as fixed assets in its books. The company pays to its customers/agents for

returning the empty bottles at the prevailing market prices. The company urges its

customers/agents to return the empty bottles to the company for which the

company will reimburse them at prevailing market prices

Our market is spread over a large geography. We have chosen a decentralized

organization model supported by a lean central function that will introduce and

implement proven best practices in the beer industry.

SABMiller India has nine world-class breweries strategically located across India,

which are well positioned to easily access and efficiently service the beer markets.

MANAGEMENT:-

At SABMiller India, it aims to be amongst the three most admired beverage

companies in India.

The company believes that people, processes and practices drive our operational

performance. Achieving our goal requires a strong organisation embedded with

systems and practices with high standards of performance.

The essence of management at SABMiller India lies in setting goals, monitoring

performance against them as well as adequate employee recognition. SABMiller

India is a company managed in a modern fashion, making use of extensive

experience, knowledge and skills of experts from various areas of the company

operation under the leadership of the Executive Committee.

Director- Marketing

Shalbh Sen

Director- Supply Chain

Dave Johnstone

Director- Technical

Hari Krishna

Director- Human Resources

Kevin Heydenrych Director- Finance

Sundeep Kumar Director- Corporate Affairs & Communication

T. J. Venkateshwaran

Director- Sales

Derek Jones

About The Product

Royal Challenge

Launched in the year 1993, Royal Challenge Premium

Lager is the second largest selling mild beer in India. Royal Challenge is brewed with the choicest 6 malt

barley. Its long brew duration provides it with a distinct,

smooth taste and rich flavour. It has all the hall marks of a great beer - Color that is golden honey, taste that is

smooth and crisp, lace that sticks to the wall of the

glass. Royal Challenge Premium Lager is the beer for

the discerning who has the confidence to make their choices based on their superior taste and knowledge

rather than follow the crowd.

The brand has moved from strength to strength since its relaunch by SABMiller in 2004, and has set itself on a

growth momentum that is well ahead of the mild beer

industry.

It is now become the largest selling mild beer brand in many large beer markets,

including Andhra Pradesh, Uttar Pradesh and Orissa. Besides being available

across most states in India, Royal Challenge Premium Lager is also exported to USA, Europe, Middle East, Australia and Hong Kong.

Brewed from select malts and imported hops, on a specially developed recipe by

the brewmasters from SABMiller, one of world‘s largest brewers with over a hundred years of heritage, Royal Challenge symbolizes a perfect harmony between

the high art of brewing and the assurance of modern technology.

Royal Challenge Premium Lager offers a difference with an edge. Besides its international class packaging, premium image and path breaking advertising, what

sets the brand apart is the long brew cycle which lends it a distinctly smooth and

easy flowing taste.

About this brand

Brand: Royal Challenge Premium Lager

Colour: Golden Honey

Taste: Rich Smooth Taste

Alcohol content by volume: < 5%

Serving Temperature: 4 - 9 ° C

Fats: Zero

Proteins: 3.2 gm / liter

Fermentation Process: Bottom fermenting Lager Yeast

Malts: 6 row malted barley

Hops: German hop extract complimented with locally grown Indian hop

Packaging:

Non returnable green bottles - 650 ml & 330 ml

Glass Bottle, Cans - 500 ml, 330 ml, Draught (in Select Cities)

Other Products of the Company

SABMiller entered the Indian market in the year 2000 by acquiring Narang breweries and has

since acquired several breweries and brands, the

most notable being its acquisition, in June 2001,

of Mysore Breweries (with its Knock Out brand) and in May 2003 of Shaw Wallace‘s beer brands

(Royal Challenge & Haywards)

Year 2000-01:

Entered in July 2000 with JV and later

acquisition of Narang Breweries (UP)

Year 2002:

Launched Castle in Delhi from Himneel Breweries (contract brewery)

Acquired Mysore Breweries (MBL) with 2 breweries in west and south.

Rolled out Knock Out nationally

Year 2003:

Acquired Rochees Breweries in February

Formed JV with Shaw Wallace, later acquired

Year 2006:

Acquired Fosters India

SABMiller India Operations

Total Breweries: 10 (Owned), 3 (Contract)

Total Market Share: 35 percent

Haywards 5000

Haywards 5000 is India's largest selling strong beer brand, which perfectly combines strength

with quality credentials that meet the high expectations of today‘s demanding consumers.

Launched in the year 1983, Haywards 5000 is synonymous with strong beer in India.

FostersFoster's® Lager is a uniquely Australian beer, brewed with the finest sun-dried

malted barley, the purest water, and Foster's® own specially bred 'Pride of

Ringwood' hops imported directly from Australia to give the beer an authentic flavor.

Foster's® Lager Beer has always been at the forefront of brewing technology and

the Foster's® Lager brewed today is the result of over a century of attention of the

brewing art. Quality has been the strength of Foster's® since its earliest days and

remains a paramount concern at every stage of the beer's journey from brewery to

consumer. Foster's® crisp, clean flavour won it immediate international acclaim

when it was first brewed in Melbourne in 1888. Today, more than one hundred years

later, it is still recognized as one of the world's best beers.

SABMiller India now brews & markets Foster's® in India

Indus Pride

Introducing Indus Pride, a 100% malt beer made using aroma hops and the finest malt that gives it a rich and vibrant taste specially suited to the Indian palate.

So what is so special about a 100% malt beer?

Most beers use a combination of sugar, maize or rice with malt. 100% malt gives the beer the full flavor, vibrant sunrise color and brewery fresh clarity. Indus Pride,

with its 100% malt content has a well balanced taste, great mouth feel and is a

great drinking experience.

BREW CHARACTERISTICS:

Special hops

Essential oils of the special hops are used in Indus Pride to add a distinctive flavor and aroma to the beer.

Special brewing process

Indus Pride has been brewed with passion to give you a consistent, balanced and

fresh taste. The beer stays stable longer and has a longer shelf life.

Indus Pride is a beer for the confident, fun, vivacious and passionate Indian who

believes in living his passions to the fullest. He is passionate, modern and proud of

his roots.

Indus Pride is brought to you by SABMiller group, one of the world‘s Largest

brewers with a heritage of over 100 years brewing history and presence across 6

continents and 60 countries.

Indus Pride will offer its consumers and retailers a young, rich and vibrant

alternative to the old, traditional beers. SABMiller group commits to support the

brand with outlet visibility drives and promotional incentives, thus ensuring that

the brand moves off the shelf quickly.

Knock Out

Ever since its launch in 1984, Knock Out has grown from strength to strength to establish itself as one of the

largest selling strong beers brands in the country.

Today there are millions of consumers in the states of Karnataka, Maharashtra, AP, and some parts of the

northern India for whom the brand has come to acquire

an iconic status.

The popularity of the brand can be gauged by the fact,

that despite being available only in limited markets,

around 3 lakh bottles of Knock Out Beers are guzzled

by the consumers everyday.

Now part of SABMiller‘s portfolio in India, Knock Out

is brewed in modern, state of the art breweries to ensure

consistent conformance to the highest international standards.

Automated and modern techniques help ensure that the

beer is produced under hygienic conditions, free from any external impurities.

Peroni Nastro Azzurro

Peroni Nastro Azzurro is an intensely crisp and refreshing lager, with

an unmistakable touch of Italian style, brewed in Italy to the original recipe, since

1963

Today; Peroni Nastro Azzurro has become highly representative of classic Italian

style and culture. This premium beer is 5.1% alcohol by volume and expertly

brewed using only the finest quality and variety of spring barley, maize, malts and

hops and by following a meticulous production process.

This gives Peroni its unique taste which is refreshing and dry, with a clear-cut,

clean character and clarity, achieved through the exclusive brewing process. This

ensures that the beer has both a fresh and natural quality.

Positioned as ‗Italian style in a bottle‘, from presentation to pouring the

brand, Peroni has struck a chord with modern urbanites looking for

cosmopolitan class.

Stages of Product Life Cycle

INTRODUCTION STAGE

The introduction stage starts when the new product is first launched. Introduction

takes time and the sales growth tends to be slow at this stage. Because it takes time

to roll out a new product and fill dealer pipelines. Advertising costs typically are high during this stage in order to rapidly increase

customer awareness of the product and to target the early adopters.

During the introductory stage the firm is likely to incur additional costs associated with the initial distribution of the product. These higher costs coupled with a low

sales volume usually make the introduction stage a period of negative profits.

Because the market is not generally ready for product refinements at this stage, the

company produce basic versions of the product. The firms focus their selling on those buyers who are readiest to buy the product.

Promotional expenditures are at their highest ratio to sales because of the need to

inform potential consumers, induce product trial and secure distribution in retail outlets.

During the introduction stage, the primary goal is to establish a market and build

primary demand for the product class. In short, following are some of the

marketing mix implications of the introduction stage: · Product - one or few products, relatively undifferentiated

· Price - Generally high, assuming a skim pricing strategy for a high profit margin

as the early adopters buy the product and the firm seeks to recoup development costs quickly. In some cases a penetration pricing strategy is used and introductory

prices are set low to gain market share rapidly.

· Distribution - Distribution is selective and scattered as the firm commences

implementation of the distribution plan. · Promotion - Promotion is aimed at building brand awareness. Samples or trial

incentives may be directed toward early adopters. The introductory promotion also

is intended to convince potential resellers to carry the product.

· Advertising –Advertising is aimed to be high ad build product awareness among early adopters and dealers.

GROWTH STAGE

If the new product satisfies the market, it will enter a growth stage, in which sales will start climbing quickly. The early adopters will continue to buy, and later

buyers will start following their lead, especially if they hear favorable word of

mouth.

Once the product has been proven a success and customers begin asking for it, sales will increase further as more retailers become interested in carrying it. The

marketing team may expand the distribution at this point.

Profits increase during the growth stage, as promotion costs are spread over a large volume and as unit manufacturing costs fall faster than the price declines owing to

the producer learning effect. Firms have to watch for a change from an accelerating

to decelerating rate of growth in order to prepare new strategies. Attracted by the

opportunities for profit, new competitors will enter the market. They will introduce new product features, and the market will expand. The increase in competitors

leads to an increase in the number of distribution outlets, and the sales jump just to

build reseller inventories. The firm uses several strategies to sustain rapid market growth as long as possible.

· It improves the product quality and adds new product features and improved

styling.

· It enter new segments · It lowers prices to attract the next layer of price sensitive buyers

· It shifts from product awareness advertising to product preference advertising.

· It adds new models and flanker products (i.e., products of different sizes, flavors, and so forth that protect the main product.

In the growth stage, the firm faces a trade-off between high market share and high

current profit.

During the growth stage, the goal is to gain consumer preference and increase sales. In short, the marketing mix may be modified as follows:

· Product - New product features and packaging options; improvement of product

quality. · Price - Maintained at a high level if demand is high, or reduced to capture

additional customers.

· Distribution - Distribution becomes more intensive. Trade discounts are minimal

if resellers show a strong interest in the product. · Promotion- Promotion expenditure are at high level.

· Advertising- Increased advertising to build brand preference

MATURITY STAGE

The maturity stage is the most profitable. This maturity stage normally lasts longer

than the previous stages and it poses strong challenges to the marketing management. Most products are in the maturity stage of the life cycle, and

therefore most of the marketing management deals with the mature products.

The company can try modifying the marketing mix by improving sales by

changing one or more elements. The company might also try modifying the product by changing characteristics

such as quality, features, or style to attract new users and to inspire more usage.

The company might try to expand the market for its mature brand by working with

the two factors that make up sales volume: Volume= number of brand users * usage rate per user

During the maturity stage, the primary goal is to maintain market share and extend

the product life cycle. In short, marketing mix decisions may include: · Product - Modifications are made and features are added in order to differentiate

the product from competing products that may have been introduced.]

· Price - Possible price reductions in response to competition while avoiding a

price war. · Distribution - New distribution channels and incentives to resellers in order to

avoid losing shelf space.

· Promotion - Emphasis on differentiation and building of brand loyalty. Incentives to get competitors' customers to switch.

DECLINE STAGE

The sales of most product forms and brands eventually dip. The decline may be

slow or may plunge to zero or they may drop a low level where they continue for many years. Sales decline for many reasons, including technological advance,

shifts in consumer tastes, and increased in competition. Carrying a weak product

can be very costly to a firm, and not just in profit terms. There are many hidden costs. A weak product may take up too much of management‘s time. It often

requires frequent price and inventory adjustments. It requires advertising and sales

force attention that might be better used to make ―healthy‖ products more

profitable. A product‘s failing reputation can cause customer concerns about the company and its other products. The biggest cost may well lie in the future.

Keeping weak products delays the search for replacements, creates a lopsided

product mix, hurts current profits, and weakens the company‘s foothold on the

future.

Management may decide to reposition or reformulate the brand in hopes of moving

it back into the growth stage of the product life cycle. Management may decide to harvest the product, which means educing various costs (plant and equipment,

maintenance, R&D, advertising, sales force) and hoping that sales holdup. If

successful harvesting will increase the company‘s profits in the short run. Or

management may decide to drop the product from the line. It can sell it to another firm or simply liquidate it at salvage value.

In a study of company strategies in declining industries, marketing agents have

identified five decline strategies available to the firm: · Increasing the firm‘s investment (to dominate the market or strengthen its

competitive position).

· Maintaining the firm‘s investment level until the uncertainties about the industries

are revolved. · Decreasing the firm‘s investment level selectively, by dropping unprofitable

customer groups, while simultaneously strengthening the firm‘s investment to

recover cash quickly. In short, the marketing mix may be modified as follows:

· Product - The number of products in the product line may be reduced. Rejuvenate

surviving products to make them look new again.

· Price - Prices may be lowered to liquidate inventory of discontinued products. Prices may be maintained for continued products serving a niche market.

· Distribution - Distribution becomes more selective. Channels that no longer are

profitable are phased out.

· Promotion - Expenditures are lower and aimed at reinforcing the brand image for continued products.

PLC CHART

PLC of Royal Challenge

INTRODUCTION STAGE OF ROYAL CHALLENGE BEER

A new product progresses through a sequence of stages from introduction to growth,

maturity and decline. This sequence is known as the product life cycle and is associated

with changes in the marketing situation, thus impacting the marketing strategy and the

marketing mix.

In the introduction stage, the firm seeks to build product awareness and develop a

market for the product. The impact on the market mix was:

Product – One or few product remain undifferentiated, as Royal Challenge was

launched in 1993. Also the new breweries were set up newly; it was difficult to

recognize the product in market.

Pricing - Pricing under introduction is kept moderate to building market share

rapidly or high skim pricing to recover development costs. SabMiller kept its price

very reasonable because income level in 90‘s was just improving after the 1991

economic liberalization.

Distribution – Distribution is selective until consumers show an acceptance of

product. Royal Challenge distribution was merely in metropolitan cities and near

by places.

Promotion- It was aimed at innovators and early adopter‘s. Marketing

communications seeks to build product awareness to potential consumers about

the product. Royal Challenge promotion was very high in introduction stage.

Applications in Introduction stage of Royal Challenge beer

SALES

During the introduction stage sales were low. Developing economy India

was not able to understand and accept the concept of having a smooth chilled beer

after a hard day‘s work to refresh them. People were not ready to waste their money

on mild smooth beer. They were used to strong beer which would give them a high

and make them have a good sleep. Also other beer brands capitalized on this idea

and gained a market share, e.g. Kingfisher strong, Haywards 5000, Knockout, and

Zingaro etc.

COSTS

Costs were very high in initial stage; Royal Challenge was getting per unit

cost very high. As the first reason was distribution cost was high initially, secondly

people were not aware about the product.

PROFITS

Profits were negative at initial stage. As the sales were slow and expenditure

was high at that time.

MARKETING OBJECTIVES

Marketing objectives were to create product awareness and trial. SabMiller

made trial in many segmented markets to improve its slow sales of their new

product.

ADVERTISING

Advertising was very moderate. The reason was of their unawareness of the impact

of electronic media. Advertising is an important criterion to enhance the sales of

Royal Challenge during occasions and festive seasons.

GROWTH STAGE OF ROYAL CHALLENGE BEER

If the new product satisfies the market, it will enter a growth stage, in which sales start

climbing quickly. The early adopters will continue to buy and later buyers will start

following their head, especially if they hear favorable word of mouth publicity.

The firm‘s several strategies to sustain rapid growth as soon as possible are-

It improves the product quality and adds new product features and improved

styling.

It enters various new segments.

It lowers prices to attract the next layer of price sensitive buyers.

It shifts from product awareness advertising to product preference

advertising.

During the growth stage the goal is to gain customer preference and increase sales. In

short marketing-mix may be defined as follows:

Product- new product features and packaging options, improvement of product

quality.

Price- maintained at high level if demand is high or reduced to capture

additional customers.

Distribution- distribution becomes more intensive. Trade discounts are minimal

if resellers show a strong interest in the product.

Promotion - promotion expenditure are at high level.

Advertising- increased advertising to build preference.

Advertising of Royal Challenge beer is considered a domain factor in growth of

Royal Challenge. Also the packaging of the beer made people take notice of it. It

was much more stylized and gave people the feel of sitting together among greener pastures as free land is considered to be stress free. Also the word of mouth

publicity of the taste of the beer made people to stand up and look and accept the

product. SabMiller during the growth stage, targeted consumers in the age range of

21 to 35. These people were the upcoming youth generation of a developing economy i.e. India, were ready to work hard but party harder as well. Also the

name of the product signified royalty, niche class of people and people who dared

to face any kind of challenge.

Applications in Growth stage of Royal Challenge beer

Sales

For Royal Challenge the growth stage is from 2004 when it was relaunched, when

the taste and preference of people started changing and consuming the product was

seen as an option of relaxation and having a good time, sales started increasing.

Costs

In growth stage, average cost per customer was decreasing as people were gaining

knowledge about the product in market.

Profits

In growth stage profit started increasing as Royal Challenge started grasping the

market.

Marketing objectives

Royal Challenge‘s marketing objectives was to maximize market share.

Price

Royal Challenge keeps the price reasonable in the growth stage as well to penetrate

the market.

Distribution

Royal Challenge paved the way on making the distribution channel of Royal

Challenge more powerful.

In the growth stage the firm faces a trade off between high market share and high

current profit. By spending a lot of money on product improvement, promotion and

distribution, the company can capture a dominant position. In doing so however it

gives up maximum current profit which hopes to make up in the next stage. In the

growth stage of Royal Challenge Beer the huge contribution in making the product

successful, considered for advertising. Also it came up with the promotional idea

of introducing different music CDs which were of a party mood genre which made

it sales increase rapidly. This also helped it capture the market and grow its net

profit.

PLC Graph for Royal Challenge Beer

Year Sales Profit

2002 372 201

2003 480 345

2004 601 430

2005 613 397

2006 1065 657

2007 709 415

2008 2129 1054

0

500

1000

1500

2000

2500

1 2 3 4 5 6 7

Year

Sales

Profit

Conclusion

To conclude my report, I would say that the PLC theory has its share of critics.

That life cycle pattern is too variable in shape and duration. PLCs lack what living organism‘s have namely, a fixed sequence of stages and a fixed length of stage.

Critics also charge that marketers can seldom tell what stage the product is in. A product may appear to be mature when actually it has reached a plateau prior to

another usage.

So, in the end, I would like to say that the PLC concept helps us interpret product and market dynamics. It can be used for planning and control, although as a

forecasting tool it is less useful.

In real life situation, the PLC Graph is never bell-shaped in nature. No product can have a perfectly inelastic demand although it might be possible in theory.

Bibliography

Philip Kotler, Marketing management, Millennium Edition

Philip Kotler, Principles of Marketing, Thirteenth Edition

www.wikipedia.com

www.sabmiller.in/royalchallenge

www.marketingteacher.com

www.google.com