Subject STRATEGIC MANAGEMENT Code

Topic PRODUCT LIFE CYCLES Assignment Individual

Date
Name MAZNI BINTI ABDUL GHAFFAR Programme BBA (ENT)

1) Select one local product and subscribe the 4 stages in the product life cycles.

AIRASIA BERHAD
Introduction AirAsia Berhad
 Established in 1993 and commenced operato on 18 November 1996.
 2 December 2001, it was purchased by former Time Warner executive Tony
Fernandes’s company Tune Air Sdn Bhd from ownership of HICOM Holdings Bhd for
the token sum of only RM1, and with only 2 Boeing 737-300 aircraft together with
RM40 million in debt.
 AirAsia Berhad is a Malaysia-based low-cost airline.
 The largest low-fare, no-frills airline and a pioneer of low cost travel in Asia.
 AirAsia is proud to be a truly ASEAN (Association of South East Asian Nation) carrier.
 Operates scheduled domestic and international flight
PRODUCT LIFE CYCLE
A concept that provides a way to trace the stages of a product’s acceptance, from its
introduction to its decline.

Introductory Stage
 No competiton
 High-failure Rates
 In debt
 Limited Distribution
 Promotion focuses on awareness and information
 Frequent product and Modification
 Market Penetration Strategies

Growth Stage
 Increase rate of sales
 Entrance of competitors
 Fernandes turned the company around, producing a profit in 2002 and launching new
routes from its hub in Kuala Lumpur
 undercutting former monopoly operator Malaysia Airlines with promotional fares as
low as MYR 1 (US$0.27).
 AirAsia opened a second hub at Senai International Airport in Johor Bahru near
Singapore and launched its first international flight to Bangkok.
 AirAsia subsequently started its Thai AirAsia affiliate, and began flights to Singapore,
Indonesia, Macau, China (Xiamen), Philippines (Manila), Vietnam, Cambodia, Brunei
and Myanmar.
Maturity Stage
 Declining sales growth
 Saturated market
 Extending product line
 profits increased by 168% on a year-over-year basis.

Decline Stage