Saturation
At this point the sales of the product are not growing at all, though clearly sales are still high. A business might be thinking about developing a replacement when saturation is reached, unless the life cycle itself can be extended. At saturation a product may need some new offers to keep sales high.
Decline
The final stage of the life cycle, here sales are falling and though the product may be given some support in the form of further promotional offers, consumers see the product as old and switch to those of the competitor. It is at this point that a successful business would have developed a new product to replace the one that is in decline.+
The blue and green lines on the graph are extensions, these are when Cadbury’s bring out a new product and attempt to increase sales, revenue and profit.
* This is where Cadbury’s is round about in their life cycle, because they bring out new products all the time to try stop the decline of their product, and it works. Cadbury’s are always in demand because customers wont necessarily stop buying the products.
Price
There are many different methods of pricing that businesses use. In different situation the method of pricing may differ. The most commonly used methods are:
Competitor Pricing
This method looks at the prices being charged by the competing businesses, so it gives the business which is bringing out a product an idea of what sort of price they should charge for their product. It would be sensible to make their price lower and gradually bring it up as they get a well known product.
Cost plus pricing
Cost plus pricing is when companies extend their price to what they feel they will pay, E.g. A Cadbury’s bar may have been about 30p 4 years ago but when they realized people are willing to spend more on their product they increased the price over time.
Price Penetration
As a new business which is not known to the public, its hard to persuade customers to buy their product instead of the popular, familiar brand named products which the consumer would be used to, so the new business may make their products cheaper than the others to get customers to buy them.
Skimming
This is when a product is majorly better than the competing products, the new product can be offered at a higher price, this is because many consumers are willing to spend more to get the “latest product”. This is also known as “creaming”. After a while the product becomes “ordinary” so the demand drops resulting in the customers not willing to spend more on the product, so the company reduce the price so more customers would buy it like penetration pricing skimming would be only used for only a short period of time.
Differential Pricing
This method of pricing is used when different businesses charge different prices for the same product when selling to different customers. It’s common to transport businesses like trains charge different prices for adults then to children.
Promotional Pricing
Promotional pricing is a reduction in price used either to attract customers to an existing product or to sell off old products (as in a sale). Sales of a product may be falling a little and in need of a boost, or stock may need to be sold to make room for the new stock.
Psychological Pricing
Psychological pricing or price ending is a marketing practice based on the theory that certain prices have a psychological impact. The retail prices are often expressed as "odd prices": a little less than a round number, e.g. £19.99 or £6.95 (but not necessarily an odd number, it could also be 2.98)
Relative to Cadbury’s
Cadbury’s price their products mainly though competitor pricing and psychological pricing. Competitor pricing because of companies selling a similar product (Mars Corp. which sell are the leading brand selling chocolate next the Cadbury’s) Psychological pricing to make the product seem a lot cheaper than it actually is, for example: If two of the same chocolate bars were sold at different prices, one priced at 49p and the other at 50p, the 49p one would have sold more because the consumer thinks their getting a bargain.
Place
Place represents the location where a product can be purchased. It is often referred to as the distribution channel. It can include any physical store as well as virtual stores on the Internet.
Cadbury’s use physical stores only from what I know I haven’t yet found a internet site which sells Cadbury’s products. Cadbury’s will use shops such as local corner shops, Superstores, and airports. Because the type of product that Cadbury’s produce customers would rather buy the product and have it straight away instead of waiting for it to arrive in the post. You can find Cadbury’s product in almost every Corner shop, grocery shop and superstore in the UK so they have done well with the place.
Promotion
Promotion represents all of the communications that a marketer may use in the marketplace. Promotion has four distinct elements - advertising, public relations, word of mouth and point of sale. A certain amount of crossover occurs when promotion uses the four principal elements together, which is common in film promotion. Advertising covers any communication that is paid for, from and cinema commercials, radio and Internet adverts through print media and billboards. One of the most notable means of promotion today is the Promotional Product, as in useful items distributed to targeted audiences with no obligation attached. This category has grown each year for the past decade while most other forms have suffered. It is the only form of advertising that targets all five senses and has the recipient thanking the giver. Public relations are where the communication is not directly paid for and includes press releases, sponsorship deals, exhibitions, conferences, seminars or trade fairs and events. Word of mouth is any apparently informal communication about the product by ordinary individuals, satisfied customers or people specifically engaged to create word of mouth momentum.
Cadbury's adverts have been some of the most successful adverts in a long time. Cadbury’s caught onto the idea of that if they had a “entertaining piece” instead of an original advertising commercial they would catch more of an audience. It started off with the Gorilla Advert in 31 August 2007, the advert was a hit, it had completed and checked all boxes that a commercial has to do, The main thing is that it was on everyone's mind, most people were talking about the ridiculous monkey playing the drums, and every time someone herd the Phil Collins song, you instantly thought about the monkey which then thinking about Cadbury's.
And even now Cadbury’s continue their Good work of promoting their products with the new adverts like the one with the eyebrow’s and the Cream egg/twisted. There promotion methods are some of the best because it gets you talking about their products and that is the main aim of a commercial, obviously as well as to get people buying them.
Cadbury’s Also Promote though billboards, internet, competitions and offers.
