Effect Of GST on Sectors.....

The GST is a Value added Tax (VAT) and is proposed to be a comprehensive indirect tax levy on manufacture, sale and consumption of goods as well as services at the national level. It will replace all indirect taxes levied on goods and services by the Indian Central and State governments. It is aimed at being comprehensive for most goods and services.

The taxes which will be subsumed into GST include central excise duty, services tax, additional customs duty, surcharges and state-level value added tax

DUAL GST

A dual GST module for the country has been proposed by the EC(Empowered Committee of State Finance Ministers (EC). This dual GST model has been accepted by centre. Under this model GST have two components viz. the Central GST to be levied and collected by the Centre and the State GST to be levied and collected by the respective States. Central Excise duty, additional excise duty, Service Tax, and additional duty of customs (equivalent to excise), State VAT, entertainment tax, taxes on lotteries, betting and gambling and entry tax (not levied by local bodies) would be subsumed within GST. Other taxes which will be subsumed with GST are Octroi, entry tax and luxury tax thus making it a single indirect tax in India.

HISTORY

The Constitution (One Hundred and Twenty-Second Amendment) Bill, 2014 was introduced in the Lok Sabha by Finance Minister Arun Jaitley on 19 December 2014, and passed by the House on 6 May 2015. In the Rajya Sabha, the bill was referred to a Select Committee on 14 May 2015. The Select Committee of the Rajya Sabha submitted its report on the bill on 22 July 2015. The bill was passed by the Rajya Sabha on 3 August 2016, and the amended bill was passed by the Lok Sabha on 8 August 2016

The bill, after ratification by the States, received assent from President Pranab Mukherjee on 8 September 2016  and was notified in The Gazette of India on the same date.

Ratification

The Act was passed in accordance with the provisions of Article 368 of the Constitution, and has been ratified by more than half of the State Legislatures, as required under Clause (2) of the said article. On 12 August 2016, Assam became the first state to ratify the bill, when the Assam Legislative Assembly unanimously approved it.[14][15] State Legislatures that ratified the amendment are listed below:

WORKING

Goods and Services Tax would be levied and collected at each stage of sale or purchase of goods or services based on the input tax credit method. This method allows GST-registered businesses to claim tax credt to the value of GST they paid on purchase of goods or services as part of their normal commercial activity. Taxable goods and services are not distinguished from one another and are taxed at a single rate in a supply chain till the goods or services reach the consumer. Administrative responsibility would generally rest with a single authority to levy tax on goods and services.^[1] Exports would be zero-rated and imports would be levied the same taxes as domestic goods and services adhering to the destination principle.

EFFECT

·         would mitigate cascading or double taxation,

·         facilitating a common national market.

·         The simplicity of the tax should lead to easier administration and enforcement.

·         From the consumer point of view, the biggest advantage would be in terms of a reduction in the overall tax burden on goods, which is currently estimated at 25%-30%,

·         free movement of goods from one state to another without stopping at state borders for hours for payment of state tax or entry tax and

·         reduction in paperwork to a large extent

CHANGES

“The tax rate under GST may be nominal or zero rated for the time being. It has been proposed to insulate the revenues of the States from the impact of GST, with the expectation that in due course, GST will be levied on petroleum and petroleum products.” The central government has assured states of compensation for any revenue losses incurred by them from the date of introduction of GST for a period of five years.

The Central Goods and Services tax grants power to the officers to discharge their duties under the GST Act.

GST threshold was set at ₹10 lakh (US$15,000) for the north-east and hill states and ₹20 lakh (US$30,000) for other states in the first GST council meet

 

Problems in the Present Structure

Present Indirect structure is marked with following problems:

Multiplicity of Taxes

Presently, the Constitution empowers the Central Government to levy excise duty on manufacturing and service tax on the supply of services. Further, it empowers the State Governments to levy sales tax or value added tax (VAT) on the sale of goods. This exclusive division of fiscal powers has led to a multiplicity of indirect taxes in the country. In addition, central sales tax (CST) is levied on inter-State sale of goods by the Central Government, but collected and retained by the exporting States. Further, many States levy an entry tax on the entry of goods in local areas. Taxes by Union Government, State Governments and the local governments have resulted in difficulties and harassment to the tax payer. He has to contact several authorities and maintain separate records for each of them.

Complex

The taxes are levied by central government as well as state government. So, a person has to maintain accounts which will comply with all the applicable laws. This multiplicity of taxes at the State and Central levels has resulted in a complex indirect tax structure in the country that is ridden with hidden costs for the trade and industry.

Cascading effects of taxes

In current indirect tax structure in India, there is cascading of taxes due to ‘tax on tax’. No credit of excise duty and service tax paid at the stage of manufacture is available to the traders while paying the State level sales tax or VAT, and vice versa. Further, no credit of State taxes paid in one State can be availed in other States. Hence, the prices of goods and services get artificially inflated to the extent of this ‘tax on tax’.

 Multiple Compliance

A business person might have to comply with multiple compliance in terms of indirect taxes in India.

Tax Arbitrage

The problem of tax arbitrage for a single nation poses an invisible barrier for free trade. In many cases, a small difference in rate of tax can result in manifold implications and thus, can induce the business to move into a lower tax territory. As an example, the different rate of VAT as levied on sale of goods in different states .

GST is seen as a solution to the above problems.

GST shall subsume the following taxes in the times to come once the law is in force:

The proposed GST regime shall have the following features:

·         It shall be a destination based taxation

·         It shall have a Dual Administration – Centre and state

·         State wise determination of taxable person – no more centralized registration

·         Seamless credit amongst goods and services

 

Tax-Rate under the proposed GST

As per the decisions made by all will of GST Council on November 3rd, 2016, The tax rates would be at 4 slabs of 5%, 12%, 18% and 28%. Although rates have come down, tax collection would go up due to increased tax elasticity. The government is working on a special IT platform for smooth implementation of the proposed Goods and Services Tax (GST). The IT special vehicle (SPV) christened as GST N (Network) will be owned by three stakeholders—the centre, the states and the technology partner NSDL, then Central Board of Excise and Customs (CBEC) Chairman S Dutt Majumdar said while addressing a "National Conference on GST". On the possibility of rolling out GST, he said, "There was no need for alarm if GST was not rolled out in April 1, 2012.

Renewed GST concerns

With heterogeneous State laws on VAT, the debate on the necessity for a GST has been reignited The best GST systems across the world use a single GST, while India has opted for a dual-GST model. Critics claim that CGST, SGST and IGST are nothing but new names for Central Excise/Service Tax, VAT and CST, and hence GST brings nothing new to the table. The concept of value-added has never been utilized in the levy of service, as the Delhi High Court is attempting to prove in the case of Home Solution Retail, while under Central Excise the focus is on defining and refining the definition of manufacture, instead of focusing on value additions. The Revenue can be very stubborn when it comes to refunds, as the Maharashtra Government proves, and software entities that applied for refunds on excess service tax paid on inputs discovered

The all-new Cenvat Credit Rules, 2014 do little to clarify eligibility for input credits, by using general terms such as "any goods which have no relationship whatsoever with the manufacture of a final product" and "services used primarily for personal use or consumption of any employee.

BENEFITS OF GST

GST has been envisaged as an efficient tax system, neutral in its application and distributionally attractive. The advantages of GST are:

• Wider tax base, necessary for lowering tax rates and eliminating classification disputes
• Elimination of multiplicity of taxes and their cascading effects
• Rationalization of tax structure and simplification of compliance procedures
• Harmonization of center and state tax administrations, which would reduce duplication and compliance costs
• Automation of compliance procedures to reduce errors and increase efficiency

·         Destination principle

·         The GST structure would follow the destination principle. Accordingly, imports would be subject to GST, while exports would be zero-rated. In the case of inter-state transactions within India, State tax would apply in the state of destination as opposed to that of origin.

·         Taxes to be subsumed

·         GST would replace most indirect taxes currently in place

features of the proposed Indian GST system

• The power to make laws in respect of supplies in the course of inter-state trade or commerce will be vested only in the Union Government. States will have the right to levy GST on intra-state transactions, including on services.
• The Centre will levy IGST on inter-state supply of goods and services. Import of goods will be subject to basic customs duty and IGST.
• GST is defined as any tax on supply of goods and services other than on alcohol for human consumption.
• Central taxes such as Central Excise duty, Additional Excise duty, Service tax, Additional Custom duty and Special Additional duty as well as state-level taxes such as VAT or sales tax, Central Sales tax, Entertainment tax, Entry tax, Purchase tax, Luxury tax and Octroi will subsume in GST.
• Petroleum and petroleum products, i.e., crude, high speed diesel, motor spirit, aviation turbine fuel and natural gas, shall be subject to GST - date to be notified by the GST Council.
• Provision will be made for removing imposition of entry tax /Octroi across India.
• Entertainment tax,, imposed by states on movie, theatre, etc., will be subsumed in GST, but taxes on entertainment at panchayat, municipality or district level will continue.
• GST may be levied on the sale of newspapers and advertisements. This would mean substantial incremental revenues for the Government.
• Stamp duties, typically imposed on legal agreements by states, will continue to be levied.
• Administration of GST will be the responsibility of the GST Council, which will be the apex policy making body for GST. Members of GST Council comprise Central and State ministers in charge of the finance portfolio

Sometime mistakes happen..

(WILL SAMSUNG GAIN BACK ITS POSITION AS A SMARTPHONE LEADER AGAIN? )

Samsung’s large-screened, stylus-toting Android smartphones launches on August 19. TIME describes it as “a modest but welcome improvement over its predecessor, offering a more ergonomic design, an enhanced stylus, the same camera as its Galaxy S7 cousin, and some software tweaks” and awards it 4.5 out of 5 stars.

Tales of Note 7 devices catching fire begin to spread. Samsung receives 92 reports of batteries overheating in Galaxy Note 7 phones in the U.S.; it says there were 26 reports of burns and 55 reports of property damage.

The world’s three largest carriers by passenger traffic, American Airlines, Delta Air Lines and United Airlines, say that employees will tell passengers at the gate and on board aircraft to keep the Note 7 switched off until they deplane.

In total, Samsung recalls 2.5 million of the new Notes across 10 worldwide markets, including one million in the U.S. More than 500,000 replacement units of the device are shipped to carrier and retail stores in the U.S.

Samsung’s market value begins to plummet as shares fall to their lowest level in nearly two months on Sept. 12. Investors wipe 15.9 trillion won ($14.3 billion) off the South Korean firm’s market capitalization as a series of warnings from regulators and airlines around the world raised fears for the future of the device.

Analysts say the recall could have a lasting impact on the $211 billion company’s brand image, which could derail a recovery in its smartphone market share against rivals like Apple Inc. Some estimate the firm might lose $5 billion won worth of revenue after accounting for recall costs.

New reports suggest replacement phones are also catching fire.

On Oct. 9, Samsung stops exchanging recalled Note 7 devices due to reports of replacement phones catching fire, just as the original phones did.

The week before, a Southwest Airlines flight is evacuated because of a phone that is smoking and making “popping” noises after it is turned off.

The Note 7 battery problem will now sow seeds of doubt about all future Samsung phones and also about Samsung's customer service and capacity to make things right in similar cases.

 SAMSUNG GALAXY NOTE 7 TRAGEDY

Once the leader in the smartphone market who was deemed by even its critics to have had nothing short of a winner-take-all yearwas hit by a blow when In the midst of what is sure to have some think twice about picking up another “Galaxy,” it is said that the Note 7 recall has dealt a “deadly blow to the Galaxy Note brand,” that Samsung cannot recover from this, and that its best strategy is to scrap the cherished brand.

It is a costly mistake, beyond financial, since individuals were injured and the Galaxy Note brand along with it.

Samsung shares were trading at 1.65 million won -- down 3.2 percent.

Baystreet Research’s latest report says that Samsung’s total US smartphone sales are down 6% (to 7.2 million units) for the third quarter, year-on-year.

Major partners like Oculus also removed support for Note 7 on Gear VR.

The Note 7 features that “Samsung Cloud” was also taken on hold because of the death of the Galaxy Note phone.

Samsung saw $22 billion (£16bn) wiped off its market value in just two days.

The sales of future premium phones like the upcoming Samsung Galaxy S8 may be affected. It’s a natural reaction that we’re guessing the same will happen to other Galaxy phones. Even the Galaxy S7 is also now receiving the negative effect but Samsung already said that the S7 phones are safe.

KEY BENEFICIARIES

     

They will be benefited by looking into the future prospects of business and avoiding marketing myopia and will take up Issues which should be part of the company mission, vision and objectives on which Samsung has not kept a tight hold.

Those are:-

·         Accept and Value Customer Feedback.

·         Use Effective Problem Solving Techniques.

·         Use Advanced Quality Product Planning.

·         Know and Understand the Real Cost of Quality.

·         Never Lose Customer Focus.

Samsung loosed on these aspects which has lead to downfall of such a giant enterprise.

Rushing a product to the market costed billions in the back end.

2) Customers will be benefited as the Galaxy Note 7 has again bought in needs to shine a light on PRE-ORDERING, smartphone reviews, and how we think about our devices.

Early adopters constantly run into issues like this with new tech. Sure, it may be the second generation (or fourth, fifth, sixth) of a device, but that doesn’t mean it is incapable of a catastrophic failure.

Samsung again bought in concept of “STOP PRE-ORDERING!” as said by video games critics and Samsung fans.

Customers will understand the importance of long review periods and will actually take the time to do   reviews thoroughly.

Judge Companies on its actions, not its words.

There has certainly been a short-term financial hit to Samsung's bottom line. Recalls are expensive with no commercial upside. Samsung's losses could be as high as one billion dollars. Expect this to be reflected over two or three quarters of financial reports from the South Korean company.

There's also the loss of income from not having the Galaxy Note 7 on sale. The phablet was expected to match the sales of the Galaxy S7 and S7 Edge. With the Note 7 removed from the market there was room for the competition to pick up potential sales. Google's Pixel XL was an obvious beneficiary with many of the geekerati promoting it as an alternative. As a new brand in the market with limited stock the Pixel XL certainly had a sales boost but Google did not have the resources to fully exploit the gap in the market.

Neither did Apple. Although the iPhone 7 Plus is a natural competitor to the Note 7's phablet form factor it also suffered the usual stock shortages that feature during the launch period of a new Apple device. No doubt other Android device manufacturers saw increased sales, but no handset stepped up to dominate the vacated space.

What is better- INNOVATION OR IMITATION??????

You might be thinking this is a very simple question to answer and the definite answer to the question is "innovation".But it is not always true. Sometime copying with efficiency and efficacy leads to greater success than the innovation itself.(creative imitation).

Even the regulatory bodies allows copying without the breakage of law. Everything cannot be invented.Many companies are running successfully just because they can copy well.

Studies showed that imitators do at least as well and often better from any new product than innovators do. Followers have lower research-and-development costs, and less risk of failure because the product has already been market-tested.

Legal Imitation: When you can copy the product but without involving the name of the company.Sometime the process cannot be imitated ,sometimes the product depending upon the law and rights initiated.

And who says that only small companies or startups copy.Even big companies like Apple have copied .The iPod was not the first digital-music player; nor was the iPhone the first smartphone or the iPad the first tablet. Apple imitated others’ products but made them far more appealing. The pharmaceutical industry is split between inventors and imitators.

 Some innovators, such as Pfizer, have joined the copycats, starting generic-drugs businesses themselves. The multi-billion-dollar category of supermarket own-label products is based on copying well-known brands, sometimes down to details of the packaging. Fast-fashion firms have built empires copying innovations from the catwalk.”

Today is the world of who can present their product well and the product is able to justify itself in the eyes of the customers.It should provide benefits to the customer and then your product whether it is innovated or imitated will be a success.

Also there is a limitation to innovation but not to imitation as imitation doesn't just mean copying. It requires skills because it might be possible that the company that is innovating may not be so good in its product and you come out with a better version of it in terms of quality,preferences,benefits ,stability,durability etc.

 There is another point to this that, Innovators as a group get only a small fraction of the value of an innovation. Typically, the better returns go to business people often derided as copycats.For Example, innovated new products but lost out in the marketplace to others afterward. Among them, Diners Card created credit cards but lost the market to MasterCard and Visa , EMI created CAT scans but the market today is dominated by General Electric.

                                     

Coming to the Emerging countries like India  etc it is said that they should go for imitation rather than innovation because innovation requires lots of investment along with a lot of time and India is just beginning to mark its economic growth and its better to have something rather than nothing and We have seen earlier that most of the successful companies have copied in an efficient way and have made them Market leaders.

Imitation also gives you the benefit of lower risk of failure as the risk has been subdued by the innovating company.So if you are low on investment you can go for imitation rather than innovation.

All these points are not to deny that innovation does not work.

Innovation is the seed which on nourishment will let a plant(copiers) grow upon it.If there is no innovation there cannot be anything to copy.Innovation requires resources,time,skill ,competencies etc and once these grow as core competency of the innovating company no copier can take its position.

So both are good in two different situation.Check out which one will you prefer.

Why some products fail in the market?

“Make sure you are building The Right It before you build It right.”

This is very important for new ventures of products because if we are not clear enough about what we want to make and offer how can we guarantee that the customer will get a clear idea and understand our product.

The market is loaded with lots of products and everyday few products gets added on the existing list but very few get success while others just stay as substitute and still others gets removed from the market.
Why does this happens?Why few products are successful while others don't get the taste of success?
So I came with my new Blog about why few products fail in the market.

Its not always that the product made is a failure.A product can fail due to other reasons also.

The philosophy of F.L.O.P can explain it easily why the products fail.It states that product may fail due to Failure of Launch or at Operations or at Premise.
So what does these three means.
First,Failure at launch means that that the product was bought in the right time,at the right place at a right price but the awareness of the product was not there in the market which led to its failure. It happens when not enough awareness is made on social sites,news,other medias etc.So proper preparation should be made in advance of  product launch to make the upcoming product known to the market.

Second,Failure at Operations means that the product had a great launch and initially early adopters accepted the product.But as time passes by there are some technical(reliability,reusability ,durability etc) or non technical defects which gets the product bad reviews and ultimately the customers move away from the product.

Third,Failure at Premise,the products were well built (solid, reliable, stable) and the teams responsible for the launch did a great job; there was a lot of buzz and, sometimes, even strong initial sales and adoption. But after a short while, even though the product did exactly what it was designed to do–and did it well–people realized that they didn’t really need it or want it after all. The people who had already bought it stopped using it, and those who were thinking of buying it changed their mind and went after the next new thing.

There are a few examples that stand out as so colossal you have to wonder what the company was thinking. Still, others seem to have just been a case of bad timing, bad marketing and bad luck.

Product failures allows those in the planning and implementation process to learn from the mistakes of other product and brand failures. Each product failure can be investigated from the perspective of what, if anything, might have been done differently to produce and market a successful product rather than one that failed. The ability to identify key signs in the product development process can be critical. If the product should make it this far, assessing risk before the product is marketed can save an organization’s budget, and avoid the intangible costs of exposing their failure to the market.

Few examples of product failures of different companies are..

• New Coke

The new coke which was bought in by the Coca-Cola company as a strategy to fight the Cola war during the 80s. But sometime the brand name is so important as in this case that the Neew Coke was not accepted in the market and the company ultimately decided to get back to its original name CocaCola.

• Crystal Pepsi

Pepsi introduced this clear cola in the early 1990s. Unlike other clear carbonated drinks, this one didn't have a lemon/lime flavor - yet it didn't quite have a normal cola flavor either. Despite a very expensive media blitz, this see-through soda just didn't catch on. 

• Ford Edsel

Ford came out with the new car named Ford Edsel but the timing for the launch was not correct and hence The Edsel has become synonymous with failure, and it is well known as a marketing catastrophe, but the 1958 recession certainly played a large part in its undoing.

• Mc Donald's Arch Delux

McDonald's also fell prey to this with the release of the Arch Deluxe menu in the '90s. No one was fooled when Mickey-D's claimed to have moved into the fine dining racket just by slapping a tomato on top of a burger. McDonald's reportedly spent $100 million on advertising the failed line.

So we can see that even top companies of the world has suffered due to failure products. Customers are the ultimate decision maker and no one can fool them. Everything has to be planned right from the idea till the execution of the plan and even the its maintenance and market occupancy rate and improvement too.So its not an easy task to get away just by bringing in product.Actually the story begins here...

If you want to be an entrepreneur or manager you should definitely know this...HOW TO MANAGE A PRODUCT PORTFOLIO..

A company at its inception comes out with one or two products but as time move ahead the product portfolio gets bigger and managing those needs some knowledge and as the complexity rises a process has to be developed to check that all products of the portfolio are well managed and new products also gets its share as needed.
To start with,Let me tell you about how the entire working goes on..

 IDEAS:
ideas for new products is the input and is the reason to have a process in the first place. Ideas should come from many different sources including both internal and external stakeholders.

The portfolio management process as shown consists of three primary activities including
 1) the portfolio process,
 2) a resource allocation process, and
3) generation of a consolidated project plan.

The process is iterative and will be repeated formally maybe 2-4 times per year, but product and senior management should be spending a considerable amount of time outside the formal process to engage key personnel in all business functions.

PORTFOLIO PROCESS
The portfolio process is how the business prioritizes existing and potential new projects and culminates in a portfolio document that can be in the form of an Excel spreadsheet. The rows list all active and potential projects in order of business priority. The columns would typically include the current priority, a “scorecard” ranking number, the project status and phase, and the project type.

RESOURCE ALLOCATION PROCESS

The next step is to take this list of projects and align them with resources.

For existing projects, it is much easier to determine resource requirements compared to future projects where there may not even be a clear definition, but you have to start somewhere and consider resources in making decisions on the portfolio. The important thing to remember for all involved is that the further out you go, and the less defined the future projects are, the higher the uncertainty in the projections. The second comment is that because of resource constraints, some projects that are ranked lower than others may be worked on sooner just because of resource availability.

CONSOLIDATED PROJECT PLAN
The consolidated project plan, or road map attempts to communicate to the organization when specific new products will come to market. Depending on the type of industry and cycle time, it might provide a current snapshot of what the organization believes is possible over the next several years.  It will list projects that are active where the new product will be introduced in the short to medium term, and other projects where either minimal or no resources have been committed, may have very limited definition, and are projected to come to market in the medium to long term.

The key areas where senior management can support the process.

1)First, the senior manager must make the process a priority and be engaged and supportive.

2)Another key role of senior management is maintaining a balanced portfolio. Just as with any investment portfolio, you need a good mix of projects from incremental, new-to-the-firm, and radical. No firm can survive in the long run by focusing on only one type. Another key role of senior management is maintaining a balanced portfolio. Just as with any investment portfolio, you need a good mix of projects from incremental, new-to-the-firm, and radical. No firm can survive in the long run by focusing on only one type.

3)They also need to guard against listening exclusively to current customers and pushing the boundaries of  existing technology past the point where customers value the next generation product.

4)It is important that the senior manager hear and listen to all the voices and not let decisions be driven to a particular outcome. It is important that the culture support an open and honest discussion about project risk.

 The senior manager, therefore, has to walk a fine line to make sure all the voices and opinions are heard, but not let the process bog down to the point where no decisions are made or are made late.

I think after reading the process you would have got a little knowledge of how to carry on your business.

Do you know about Product life Cycle?

We all know something or the other about the Product Life Cycle.It is a four stage cycle starting with the Introduction stage and then the Growth Stage followed by Maturity Stage and finally the decline stage,

At its core, the PLM process aims to establish and protect information defining the product. This information is then shared with stakeholders to ensure that the product remains in focus and a priority proactively to ensure it is managed in the best possible way. The three core principles therefore are:
Provision of secure and managed access of the product information
Maintenance of information integrity throughout the life of the product
Management of business processes that will use, share and build on this information

But have we ever thought that the product life cycle have significance apart from just a diagram .Yes,Product life Cycle has Strategic importance to the company.

The actual story begins after the product life cycle is constructed.

Many questions arises like:

Given a proposed new product or service, how and to what extent can the shape and duration of each stage be predicted?
Given an existing product, how can one determine what stage it is in?


Given all this knowledge, how can it be effectively used?

Each of the above question needs to be strategically dealt with.


INTRODUCTION STAGE

All depends upon the product’s complexity, its degree of newness, its fit into consumer needs, and the presence of competitive substitutes of one form or another.


Few products don't need to be marketed. They are so essential and needed in the market that the automatically make their space in the market. Eg. Medicines of some fatal disease.


Customer-oriented new product development is one of the primary conditions of sales and profit growth.


And being a new product we cannot even say whether they will have any life cycle or not.It may not have growth at all.Instead they may be falling continuously . The fact is, most new products don’t have any sort of classical life cycle curve at all and may completely go the negative way.



GROWTH STAGE


In this stage the product is accepted in the market and sales begins to boom and enters the growth stage. Potential competitors who got a hint of the market growth come into play and design similar products by bringing in either a photocopy of it or some product with some development or some change in the specifications and at this point product and brand differentiation begin to develop.


there is a fight for customer patronage which brings in new set of problems.. But the policies and tactics now adopted will be neither freely the sole choice of the originating producer, nor as experimental as they might have been during Stage I.


Some of these will begin to charge lower prices because of later advances in technology, production shortcuts, the need to take lower margins in order to get distribution, and the like.








MATURITY STAGE


In this stage all the requirements are fulfilled and the product is well accepted in the market .Only production needs to be fulfilled as per the population need.Not much investment is needed in this stage.However the price war is prominent in this stage and the companies fight for minute specifications differentiation and customers build in brand preferences in this stage.


Retailers and distributors will now frequently have been reduced largely to being merchandise-displayers and order-takers. In the case of branded products in particular, the originator must now, more than ever, communicate directly with the consumer.


DECLINE STAGE


When the product comes to the decline stage the industry gets transformed.As it is the decline stage the companies tries its best to make the product to survive and may take many aggressive decisions. Consumers get bored. The only cases where there is any relief from this boredom and gradual euthanasia are where styling and fashion play some constantly revivifying role.

All the products in the market goes through these stage.It just depends upon when and which product is in which stage.The companies try to keep its product in the growth or maturity stage which are cash generators.But if there are many products which are in different stages then a proper balance of investment,product extension,newer technology etc has to be maintained otherwise the product will reach the last stage very soon and those in the last stage will get removed from the market without any notice.

So, we should always keep a keen eye on,in which stage is our product/products are.