Question

what are the reasons of pepsi being in maturity stage

Answer 1

Answer:

This post is a business case study on Pepsi’s product life cycle. This is a valuable tool for marketers to manage the product as it progresses through its life cycle. Managers are encouraged to anticipate industry changes and have strategies in place for each stage – it promotes a proactive planning approach.

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Answer 2

Explanation:

This post is a business case study on Pepsi’s product life cycle. This is a valuable tool for marketers to manage the product as it progresses through its life cycle. Managers are encouraged to anticipate industry changes and have strategies in place for each stage – it promotes a proactive planning approach.

There are five key stages of the product life cycle:

1) Pre-launch – no sales and profit are made because the product is still in development.

2) Introduction – initial sales are made to innovators, consumers who enjoy trying new products, but these are insufficient to recuperate development costs

3) Growth – sales being to increase rapidly as the product gains popularity among the early majority. It is at this stage that profits are first generated.

4) Maturity – this is the longest stage and generates the majority of a product’s sales and profits from the late majority. To ‘milk’ the product for as much profit as possible, extension strategies are often implemented to pro-long the maturity stage.

5) Decline – eventually all products stop selling, such as VHS tapes. As expected, sales begin to decline until the product is no longer profitable.

At each stage, marketers should adapt their marketing strategies to the external changes in the market place. Let’s take a look at how PepsiCo have used the product life cycle to successful grow Pepsi into one of the most consumed drinks in the world.

Product Life Cycle of Pepsi:

1) Pre-launch – the 1890s

In 1898, pharmacist Caleb Bradham developed ‘Brads Drink’, a formula designed aid digestion. After strong interest from consumers in his pharmacy, Brad renames the drink ‘Pepsi-Cola’ and purchases the trademark ‘Pep Cola’ for $100. The origins of Pepsi are very similar to that of Lucozade, which was also first produced for medicinal purposes.

Although $100 does not appear much, adjusted for inflation that amount of money in the 19th Century is equivalent to $2516.34 in 2014. This highlights the difficulties companies have in the pre-launch phases with surviving periods of negative cash-flow, large research costs and development expenditure.