Product life cycle of Coca-Cola
The product life cycle is a key aspect in successful products. Strategic managers often use the events that occur in the products life cycle to form the basis of strategic choices that a commercial entity or business decides to make in order to make sustainable sales and market share.
Coca-cola Company has been there for a century and has undergone the stages of introduction and growth and now has its presence in almost every county of the world but the brand managers responsible for Coca-Cola have been able to rejuvenate the awareness and value of the band over time making it quite popular among various consumers worldwide. The product has matured and stabilized its sales in various countries of the world and is now in the maturity stage.
During the initial stages, the Coca-Cola Company spent a lot of resources developing it brands and has thus created a brand image that has enabled it reach the peak of its sales volumes and it has even reached a saturation point whereby it is hard for its sales to go any higher.
The costs that are used in the prices of production have gone significantly down over time due to increase in economies of scale, this has also contributed to the drop of prices of their product assisting in market penetration of their product. Due to reduced growth in sales the company has often been forced to promote its products vigorously around the world, diversify and introduce other differentiated forms of Coca-cola such as diet coke in order to increase and stabilize sales.
Aims and objectives of small, medium and large scale businesses
The aim of every business is to survive and make profits in today’s economic environment. Small businesses often understand upon inception that it will take time before they start enjoying profits; the main aim of businessmen and entrepreneurs is often to survive at the first years of inception, but as time goes by.
The owners usually wish to stabilize their businesses and gain a niche of loyal clientele before they start hungering for more, but once they establish a footing they step up efforts of ensuring that their brands get more brand recognition and sustained profitability within their niche markets.
Medium-scale businesses are most of the time businesses that were once small businesses that have now expanded and grown their capacity and their objectives are often to increase their sales and revenues so that they can continue growing and expanding.
On the other hand, large scale businesses and corporations often aim to dominate the market, create reputation and build superior brand images and compete successfully among other industry participants by selling more and gaining more market share which in turn increases their revenues and funds which can be put into research of enhancing their numerous product lines.
Product oriented routes vs. Market-oriented routes
The Ansoff matrix usually assists product and brand managers to decide whether to pursue a market growth or product growth strategy in order to boost the sales and market position of their brands. Product-oriented routes often aim to concentrate on issues such as the re-arranging the elements of the marketing mix through product diversification and product development.
Product-oriented routes usually require investing more on the product by either expanding existing product lines or even introducing new product lines by launching more product lines companies usually expect that consumers will end up choosing from the wide range of their products and that this will increase the revenues for the company.
Conversely, market-oriented routes usual aim to increase the penetration of brands and products into the market by either entering into new territories or increasing market penetration in the current market. Marketing oriented routes aim to increase brand awareness with the aim of motivating consumers to purchase the product or brand.
Diversification
Kellogs option for product development was highly advantageous because Nutri-Grain had a well-established reputation and image in the market and thus, the company avoided the option of diversifying its products because it would have ended up being highly costly.
In the short run, diversification may seem as expensive in the short run but in the long run if Kellogs decided to diversify its product line by introducing other versions of Nutri-Grain which were made up of different ingredient and nutrient combinations targeting specific niches of the market this would increase their chances of profitability and even increase their competitive advantage.
Introducing new product lines that targeted different age groups, income brackets, occupations would thus appeal more specific to the needs and desires of the market and ensure continued sales. The advantage of product differentiation over product development is that diversification will allow Kellogs create more specified products that will appeal to a particular segment of consumers making it easy to cater to the varying needs of various consumers rather that use a mass-market approach.