Lovely Professional University Term Paper Ofmanagement Marketing

LOVELY PROFESSIONAL UNIVERSITY TERM PAPER OF-

Marketing

Management

TOPIC:- Identify two products in each stage of

the product life cycle and suggest strategies which can be adopted by them.

SUBMITTED TO:SUBMITTED BY:HA RENDER

Jaspreet Kaur R OLL NO:-1903B43

C LASS:-MBA1st

R EG.NO:-10906162

Introduction Product lifecycle management (PLM) is the process of managing the entire lifecycle of a product from its conception, through design and manufacture, to service and disposal. PLM integrates people, data, processes and business systems and provides a product information backbone for companies and their extended enterprise. Product lifecycle management is more to do with managing descriptions and properties of a product through its development and useful life, mainly from a business/engineering point of view; whereas product life cycle management is to do with the life of a product in the market with respect to business/commercial costs and sales measures. Product lifecycle management is one of the four cornerstones of a corporation's information technology structure. All companies need to manage communications and information with their customers (CRMCustomer Relationship Management), their suppliers (SCM-Supply Chain Management), their resources within the enterprise (ERP-Enterprise Resource Planning) and their planning (SDLC-Systems Development Life Cycle). In addition, manufacturing engineering companies must also develop, describe, manage and communicate information about their products. A form of PLM called people-centric PLM. While traditional PLM tools have been deployed only on release or during the release phase, peoplecentric PLM targets the design phase.

Recent ICT development (EU funded PROMISE project 2004-2008) has allowed PLM to extend beyond traditional PLM and integrate sensor data and real time 'lifecycle event data' into PLM, as well as allowing this information to be made available to different players in the total lifecycle of an individual product . This has resulted in the extension of PLM into Closed Loop Lifecycle Management Benefits Documented benefits of product lifecycle management include:       

Reduced time to market Improved product quality Reduced prototyping costs Savings through the re-use of original data A framework for product optimization Reduced waste Savings through the complete integration of engineering workflows

Areas of PLM Within PLM there are five primary areas; 1. 2. 3. 4. 5.

Systems Engineering Product and Portfolio Management. Product Design Manufacturing Process Management Product Data Management

Note: While application software is not required for PLM processes, the business complexity and rate of change requires organizations execute as rapidly as possible. Systems engineering is focused on meeting all requirements, primary meeting customer needs, and coordinating the Systems Design process by involving all relevant disciplines. Product and Portfolio Management is focused on managing resource allocation, tracking progress vs. plan for projects in the new product development projects that are in process .

Portfolio management is a tool that assists management in tracking progress on new products and making trade-off decisions when allocating scarce resources. Product Data Management is focused on capturing and maintaining information on products and/or services through their development and useful life. Introduction to development process The core of PLM (product lifecycle management) is in the creations and central management of all product data and the technology used to access this information and knowledge. PLM as a discipline emerged from tools such as CAD, CAM and PDM, but can be viewed as the integration of these tools with methods, people and the processes through all stages of a product’s life. It is not just about software technology but is also a business strategy.

For simplicity the stages described are shown in a traditional sequential engineering workflow. The exact order of event and tasks will vary according to the product and industry in question but the main processes are: 

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Conceive  Specification  Concept design Design  Detailed design  Validation and analysis

Tool design Realize  Plan manufacturing  Manufacture  Build/Assemble  Test (quality check) Service  Sell and Deliver  Use  Maintain and Support  Dispose 

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The major key point events are:     

Order Idea Kick-off Design freeze Launch

The reality is however more complex, people and departments cannot perform their tasks in isolation and one activity cannot simply finish and the next activity start. Design is an iterative process, often designs need to be modified due to manufacturing constraints or conflicting requirements. Where exactly a customer order fits into the time line depends on the industry type, whether the products are for example Build to Order, Engineer to Order, or Assemble to Order. The Product Life Cycle (PLC) 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.

Strategies for the differing stages of the Product Life Cycle. Introduction. The need for immediate profit is not a pressure. The product is promoted to create awareness. If the product has no or few competitors, a skimming price strategy is employed. Limited numbers of product are available in few channels of distribution. Growth. Competitors are attracted into the market with very similar offerings. Products become more profitable and companies form alliances, joint ventures and take each other over. Advertising spend is high and focuses

upon building brand. Market share tends to stabilize. Maturity. Those products that survive the earlier stages tend to spend longest in this phase. Sales grow at a decreasing rate and then stabilizes. Producers attempt to differentiate products and brands are key to this. Price wars and intense competition occur. At this point the market reaches saturation. Producers begin to leave the market due to poor margins. Promotion becomes more widespread and use a greater variety of media. Decline. At this point there is a downturn in the market. For example more innovative products are introduced or consumer tastes have changed. There is intense price-cutting and many more products are withdrawn from the market. Profits can be improved by reducing marketing spend and cost cutting. Problems with Product Life Cycle. In reality very few products follow such a prescriptive cycle. The length of each stage varies enormously. The decisions of marketers can change the stage, for example from maturity to decline by price-cutting. Not all products go through each stage. Some go from introduction to decline. It is not easy to tell which stage the product is in. Remember that PLC is like all other tools. Use it to inform your gut feeling.

Product life cycle of Toyota Life Cycle Analysis In an effort to reduce the impacts of cars on the environment and society, Toyota has developed ‘Eco-Vehicle Assessment Systems’ (Eco-VAS) to evaluate performance.

Eco-VAS is a comprehensive design tool, which Toyota’s engineers use to measure vehicle impacts through their ‘life cycle’ (LCA) - during their design and production, distribution, use and disposal. >> Design and production >> Distribution >> Driving >> Disposal

Design and production Development and design greatly affect the overall environmental impact of a vehicle. Fuel efficiency, exhaust emissions, the use of hazardous substances and raw materials are all assessed. Engineers use data from the Eco-VAS design tool to explore every potential impact and ways to overcome them prior to sending a single new car into production. Production. All Toyota manufacturing facilities are accredited to ISO14001 environmental management system, and work to aggressive targets to reduce energy and natural resource use, as well as waste and emissions. A range of other ‘sustainable plant’ activities are also adopted. >> http://www.toyota.co.jp/en/environment/sustainable_plant/index.html In New Zealand, our Thames plant is ISO14001 accredited – a world first for a used vehicle facility. Green Purchasing Guidelines. Toyota uses its considerable purchasing power to encourage suppliers to develop more sustainable products, materials and operating practices. Vehicle parts suppliers are required to achieve ISO14001 as well as introduce other voluntary actions to reduce their environmental footprint – such as reduce CO2 emissions from

their activities, and harmful substances from their products. Distribution within Japan, Toyota measures its environmental impact from the distribution of vehicles and vehicle parts throughout Japan and overseas. Vehicles are imported into NZ on the Toy Fuji shipping line, owned by Toyota. The modern fleet is specifically designed as car carriers and incorporates the latest fuel-saving technologies for sea freighting, saving a third of the fuel compared to conventional shipping.

Toyota has set reduction targets for fuel and CO2 emissions, and waste from wrapping and packaging and is implementing them through improved loading rates and package containers, shifting to more efficient modes of transportation and increasing fuel efficiency. Within NZ, Toyota measures the CO2 emissions from our vehicle distribution and works with freight providers to reduce the environmental impact from our distribution network. We are reducing costs and improving freight efficiencies after completing a review of how vehicles are moved around NZ. We reduce waste packaging from our parts distribution by sending returnable containers to our dealer network. Parts are packaged with 100%

recycled cardboard and protected from damage with shredded recycled paper from our office.

Costs: Though this cost less than a Civic, has a very good crash test rating, and is loaded with safety features, you might pay MORE to insure the Elantra. I was flabbergasted. Resale isn't as good, but I don't intend to sell this car too soon, so it is a non-issue with me. I rather save $3000 at purchase time than hope to get it back later. Driving As well as leading the way with hybrid technology, Toyota is constantly improving conventional petrol and diesel engines to increase fuel efficiency and reduce emissions. In NZ we have the widest range of vehicles available including compact fuel efficient vehicles and commercial vehicles which feature the latest ‘common rail’ clean diesel technology. Our models are amongst the most fuel efficient in the market and the average fuel economy of all the vehicles we sell in NZ has improved by 13% since 2002. The maintenance and servicing of vehicles also has an environmental impact. To reduce the volume of waste generated during the driving stage, Toyota has extended service intervals, developed long-life fluids and funded equipment to recycle and recover materials at dealerships. In addition, all Toyota dealers follow a comprehensive environmental management programmed which goes beyond local authority requirements. >> Average fuel economy >> Dealer Environmental Management

Disposal End of Life Vehicles are cars which have come to the end of their lives. They are usually sent to dismantling companies where a number of parts are removed and reused. Toyota’s Eco-VAS design approach aims to improve the dismantling, resource recovery and recycling of materials at the end of the vehicles life. This approach has led to the development of a number of innovative technologies and processes, which reduces the demand on natural resources and the volume of waste to landfill. Toyota began recycling vehicle parts in 1970 and, since then, has been progressively implementing numerous recovery and recycling measures – in some cases creating new products for ‘wastes’ discarded by society. These include: •

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Innovative materials – Toyota uses plastic bottle waste as insulation materials, converting them into car parts such as engine covers and floor mats. Recycled and easy-to-recycle plastics – Toyota developed the Toyota Super Olefin Polymer in 1991 which does not deteriorate even after repeated recycling and Thermo Plastic Olefin (TPO). Bioplastics - Toyota uses recycled plastic in many car parts and is a leader in the development and use of bio-plastics, which don’t contain harmful chemicals and petroleum used in conventional plastics. These are being used in a number of car parts including spare wheel covers and floor mats, and have the potential for much wider application as an everyday plastic. In 2000 Toyota also began the use of knead fibers in the Corolla, and in 2006 expanded its use in the package tray and door trim of the Lexus LS460. Auto Shredder Residue – Toyota diverts old car waste away from landfill and into a raw material for sound proofing new cars. The shredded material has excellent sound absorbing qualities and is used in doors, floors and dashboards. Improved dismantling – Toyota has incorporated a range of easy-todismantle features into its new vehicles since 2003. Toyota’s Automobile Recycle Technical Centre researches tools and designs for improved dismantling.

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Reduction of harmful substances – Today many thousands of chemical substances are manufactured for a wide range of products, and the effects on human health and the environment are not always clearly known. Toyota is voluntarily working towards the early elimination of the use of four substances of concern. In addition, Toyota is reducing the amount of PVC resin used, as well as toluene and xylem in thinning and cleaning solvents. Collection and recycling of hybrid batteries. Toyota hybrid batteries have a warranty of 8 years or 160,000kms and last for the life time of the vehicle. We have a programmed in place for nationwide collection and recycling of HV batteries. Batteries are transported overseas for disassembly and component parts from electrode plates, casing, cables etc., are recycled or reprocessed.

The whole package The coming together of multiple Eco-VAS technologies result in vehicles with a smaller environmental footprint. For example, the current Pries combines innovations in design, materials and recycling with the outstanding fuel economy and low emissions from the Hybrid Synergy Drive system.

End of Life Vehicle Research Motor vehicles contain hazardous fluids, gases and heavy metals, posing a potential risk to the environment at disposal, and a cost to society – especially for the 25,000 vehicles which are abandoned or illegally dumped each year. A further 170,000 used vehicles enter NZ ever year. As these cars have an average age of seven years, they are closer to the end of their life which creates disposal problems here. At best NZ has an ‘average’ infrastructure to deal with cars, and only around 75% of a vehicle by weight, is recycled. In addition to its own research, Toyota invested in a major study by Massey University that investigated this issue and presented recommendations for improving the manufacture, dealer, customer and governmental response.

Product life cycle of Hyundai Santro

Santro is a fine example of successful branding. It is a classic example of successful marketing in Indian context. Santro was launched in India in 1998. When Hyundai was contemplating its foray into the Indian market, it was planning to launch a C segment car (Accent) . But however, Hyundai

changed its strategy and launched Santro in the tough small car market. Santro is the Indian version of the successful Hyundai model Atos. Hyundai was faced with lot of perception issues prior to the launch of Santro. The issue was with regard to the country of origin. Indians were unsure about Korean products especially automobiles. Hence the first task was t o ensure that Indian consumers develop a positive association with Korean car makers. Second issue was developing a corporate image for Hyundai. Since cars are high involvement product, customers will make a choice looking on the maker, service support, spares availability, quality etc. Hence the launch of Santro should also launch the corporate brand Hyundai. Third issue was about the design of Santro. Santro was designed to be a tall boy car and initial product testing revealed that Indians did not liked the tall boy design. So the unenviable task for Hyundai was to make Indian consumers like Santro. The fourth issue was the grip of Maruti on the Indian car market. The B segment was dominated by Zen which has proved itself to be a reliable

workhorse. Zen was the preferred and logical upgrade to 800 and the car was considered to be the most reliable and powerful in that segment. To convert the potential Zen users to Santro was really a nightmare for any marketer. Hyundai marketers had a tough task ahead. A lot was dependent on Santro's success. For the brand launch, Hyundai roped in Saatchi & Saatchi as the ad agency. Thus came the first commercial: Watch the first Santro commercial here: Santro 1 The ad introduced Kim and Shah Rukh and a glimpse of the car. Kim was the Hyundai official who wanted SRK to be the brand ambassador for Santro. The name Kim was chosen wisely because the only familiar Korean name known to Indians was KIM .The ad introduced the brand and the company with a subtle statement from Kim: We settle only for the best. The first ad was followed by teaser ads where Kim tries to convince SRK that Hyundai is serious about India, the quality issue and the brand Santro. Watch the two launch ads: Here & Here These ads really created a hype in the market about Santro. Teaser ads are dangerous and expensive. Dangerous because if the teaser failed to click, the entire product launch will land up in trouble . Another issue is that the brand should follow up the hype built by teaser ads. In the case of Santro, the teasers were intelligently made and clicked. Finally came the launch ad which showed Shah Rukh who represented the Indian consumer saying " I am Convinced" to Kim. Shah Rukh fitted perfectly to the promotional scheme of Santro. Along with the launch came the criticism. Understandably the criticism was towards the tall boy design of Santro . There were reports which called

Santro the Ugly car. Santro answered that through h its performance. Indian consumers experienced a new way of driving comfort. More than the campaigns, it was the performance that made Santro

a runaway success. With in 4 years of launch, Santro became the second largest selling car in India displacing Zen. Those who wrote bad about the tall boy design began to write about the advantages of this tall boy design. Santro was initially positioned on the design aspect. It turned its biggest disadvantage into an advantage. But later, Santro was positioned itself as a complete family car. The brand was targeting those 800 users who wanted to upgrade into the B segment. The target market was the 35-45 yrs middleclass Indians. All through these years, Hyundai also came out with product improvements and upgrades. Santro Zipplus was launched focusing more on the zippy nature of the car. But then came the competition. Maruthi launched Alto and Wagon R and came Indica which displaced Santro from the second position. The brand was also facing the issue of looking dated. It was time for Hyundai to reposition the brand. Hyundai changed Santro completely in 2003. The entire design was changed and new Santro was launched as Santro Xing. Santro Xing launch ad also featured SRK and Kim. Santro Xing gave a new life to Santro. The car looked more spacious and the look was contemporary. Santro along with the new looks also changed its TG from 35- 45 to 25 -30. The brand felt that Santro should be considered as the first car rather than the upgrade. The brand wanted to appeal to the first time car buyers. To catch the young buyers, the brand was positioned as "Sunshine car’. Santro roped in Priety Zinta also as the brand ambassador. Watch the commercial here: Sunshine car Sunshine was communicating two intangibles: Freshness and youthful attitude. The brand was moving to a “Change your life “positioning. Priety was the sunshine girl. The big idea was that Santro will bring sunshine to your life. A car that can change the life of a young Indian. As usual the campaign and the new Santro was a big hit. Along with these campaigns, Santro also ran some ads focusing on promoting the brand as the first choice rather than as an upgrade. The last campaign of Santro was highlighting the virtues of a Santro user. Watch the campaign here: Santro wale The campaign was to portray Santro users as smart and intelligent and the ad

was pitted against a similar campaign of Wagon R after nine years of launch, Santro is facing its maturity stage in its PLC. The sales have stagnated and price war from Maruti and a slew of launches like Chevy Spark, have hurt the sales of Santro. Santro is also banking on price cuts and sales promotions to stay afloat. Hyundai has recently launched a new brand i10 to take the place of Santro. With the imminent launch of Tata's 1 lakh car in 2009, Santro may be used as a low priced flanking brand for i10 in future. Santro is the best example of managing a product lifecycle. Santro has managed to keep its market position by regular upgrades, product changes, relaunches and repositioning. It has been consistent in delivering excellent quality and functional performance through out its life. The brand is still a preferred upgrade for many middleclass car users. On this context, I wish to cite a personal experience at the dealership experience I had while choosing my car. I inquired about Santro aweless Alto at respective dealers in Cochin. While the Maruti dealers were constantly following up with offers and schemes, I was surprised to find that Santro dealer was least interested in making a sale. Complacency has already crept in at the dealer points (my perception). Understandably so because sales were happening without much effort. As a marketing professional, I feel that Santro is losing some 10 % sale because of this laidback approach of its dealers. Santro still has lot of fuel to keep it going. But for that Hyundai may have to keep the price down so that potential Alto users can stretch a bit and buy Santro. There is a chance that with the launch of i10, the focus on Santro will slowly decrease

Accent is one of the highly successful long serving car brands in India. Launched in 1999, this brand is now on its 10 th year in India. The simple fact that this brand has survived the highly competitive market in India speaks volume about the success of this brand.

Accent, when launched competed with the highly successful Maruti Esteem in luxury sedan market. While Esteem perished, Hyundai Accent is still managing its product lifecycle. Accent is a brand which has survived only because of the product performance and quality. Frankly there is nothing to write about the marketing or branding strategy for this brand. Accent was a highly performing work-horse which was well designed quality product that offered excellent value for money. The company was able to make enough changes in the price which enabled the brand to ride the PLC effectively. Accent now belongs to the entry level sedan market. When launched it was a premium car. Accent was an instant success because of its product quality and the rub-off from the success of Santro. The company managed the product lifecycle of Accent using variants. Hyundai regularly updated Accent by launching different variants in line with the changing consumer expectations. There were four variants for Accent in 2002 which were GLS,GLX,GVS Tornado and Viva. One of the most successful variants was the Accent Viva. VIVA launched in 2002 was positioned as a sporty sedan. The engine was tweaked to give more power and the variant was styled to give it a sporty look. Accent Viva was priced at a premium and was a successful niche variant. In 2002 , the company launched the first diesel variant of Accent. The brand was the first one to launch the CRDI Diesel engine . Although the CRDI gained lot of interest, there was lot of problems for the diesel variants.

Ultimately the diesel version was phased out in 2007. Accent started losing in the segment when Ford launched Ikon . Later the segment became crowded with lot of product launches by the competitors. At the branding front, except for the marketing of Santro, Hyundai in my opinion is a lousy advertiser. I don't remember any highly creative campaigns from them for any of their products be it i10, Verne or Terracan. The quality of creatives for Santro also has come down drastically. They have always built their brands on the product performance. For Accent also I don't remember any highly creative or good campaigns. But I remember some lousy ads of Accent trying to position it as a asp rational product. In those campaigns Accent had the tagline “Respect comes naturally ". Accent had tried out different taglines during its different stages. The frequent changes in the tagline have really messed up the positioning of the brand. Accent is confused about whether it should focus on performance or image. The taglines of Accents were Sheer Pleasure Expect More The Next Step The Power to Excite What dreams drive Although the taglines were more performance oriented, the ads especially the television commercials was unfocused. The agency failed to understand that the core brand value for Accent was its product performance and value for money proposition. Even in 2008, Accent topped the segment in customer satisfaction in a survey done by TNS.

There were many rumors about the phasing out of Accent. But like Maruthi, Hyundai also does not believe in phasing out old brands. Auto an analyst was predicting the phase out primarily because the brand was considered dated. It has been around for 10 years and consumers have become bored by the brand. The rumor was further fueled with the launch of another mid size sedan Verna. In global markets Verna is sold as the new generation Accent. And in USA, Accent (Verna) is one of the largest selling economy sedans. With the launch of Verna, Hyundai reduced the number of variants for Accent. Now Accent has only one variant. But Hyundai had other plans for Accent. In 2008 Accent was launched in CNG version. The CNG version is expected to boost the sagging sales of this brand. The launch also is an indication that Hyundai is not going to phase out this brand. This year, Accent was relaunched as Accent Executive with spruced up interiors. One of the strong points for Accent is its design. Accent is still looking great. If Hyundai plans to keep this brand alive, it should focus on the design. Accent can ride the PLC by positioning itself as a stylish brand. It should experiment with colors and graphics. The product quality is already established, what the brand needs is excitement. At this stage of the PLC, Accent will get a boost if the brand is endorsed by a celebrity. A high profile young film star can rejuvenate the brand.

Conclusion: Hyundai :Hyundai's done a fantastic job at coming up with a Corolla competitor. Except with fuel economy, it is as good or better in all respects that matter.

If you want a practical, reliable, family-friendly compact, but don't want to be the 3rd Corolla or Civic owner on your block, the Elantra is a worthy alternative It is all you have ever wanted in a small car. High performance coupled with spacious and comforting interior, this small size car definitely deserves admiration While Hyundai sells it automotive products in over 80 countries throughout the world it is committed to retaining North America as its major marketing area. To do so it is continually updating its production facilities to produce safe, top quality automobiles Toyota Conclusion:Toyota is making a product that is both good for the society/environment and practical at the same time. It is practical in that there is a demand for it and that Toyota presumably is making money or will make money on the product. Toyota is also looking towards further development of the engine, possibly combining an alternate fuel source other that gasoline with the electric component. I believe that Toyota is acting as a social entrepreneur with these lines of cars. They are providing a service to humanity and the environment while also presumably sustaining a business. According to James Brook of the New York Times, Toyota has claimed that it reached the break-even point for its profitability on its hybrid models, but industry experts in Tokyo find it impossible to know exactly how profitable these cars have been for Toyota so far. i Even if they are losing money, I think in the long run it will be where all auto production is headed, evidenced by the fact that oil is a limited resource and by the increased competition in the hybrid sector (while Toyota and its competitors do not disclose how much they put into research and development of these cars, Toyota, Nissan, and Honda all raised their budgets for R&D by ten percent). Toyota was the one to first mass-market

and produce these cars with the Prius and deserves much of the credit for leading the way.

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www.automotive.com/2009/12/toyota/corolla/

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www.indiacar.com/

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