Coca Cola product life cycle Case Study Example | Topics and Well Written Essays - 1500 words

Coca Cola product life cycle - Case Study Example This concept holds that the life of any product can be divided into four distinct periods. The first one is the introduction phase, in which the initial sales are made to customers that like trying out new products, although sales in this phase are inadequate to recuperate costs of the product’s development (GecÃŒÅ'Evska et al, 2010: p209). The second phase is the growth stage, in which the sales rapidly increase with increasing product popularity and profits begin to be generated. The third stage is referred to as the maturity stage, which generates most of the product’s profits and sales and is the longest phase. Most companies seek to prolong this phase to increase profits by implementing extension strategies. The last stage is decline, in which the product sales begin to fall and being profitable. Marketing strategies should be adapted to external dynamics within the marketplace for every stage (Matsokis & Kiritsis, 2010: p789), which Coca-Cola has done to make it t he most consumed global soft drink company. Coca-Cola was founded in mid-1886 by John Pemberton and was first introduced in form of a soda fountain drink (Coca-Cola Company.com, 2012: p1). During this stage, it was sold at 5 US cents for each glass. Because John Pemberton’s partner and accountant Frank Robinson believed that C’s would be attractive in advertising, they settled on the name Coca-Cola. The objective of Coca-Cola during this phase was to generate initial awareness about the product and put it in the market for trial by the public, which exceeded Dr. Pemberton’s initial targets (Allen, 2012: p13). In addition, they only launched a basic product that was not even sold in bottles. Rather, they sold the product from soda fountains located strategically at Dr. Pemberton’s businesses. In addition, the company used a cost plus pricing strategy during this phase and it has been suggested it is most likely they used price skimming in order to