Marketing Strategies: Mature and Declining Markets

ByNachiket Kulkarni 311

Maturity Stage
Slowdown of sales growth Product entering a stage of relative maturity Lasts longer and poses big challenges Divided into 3 phases: 1. Growth maturity 2. Stable maturity 3. Decaying maturity

Growth Maturity:
Sales growth rate starts to decline No new distribution channels to fill New competitive force emerges (marketing insight)

Stable maturity:
Sales flatten on per capita income basis Potential customers have tried the product

Decaying Maturity:

Absolute level of sales starts to decline; customers switch to other products

Marketing insight
A new product or service dimension expands boundaries of an existing category: Yoplait Go-Gurt v/s Danones Dannon. A new product or set of products carves out a fresh niche in an existing category: Energy

bar by PowerBar

A new competitor devises a way to handle existing category into a super category:
Siebel CRM

A new competitor repositions existing products or services to create an original category: Ford Galaxy minivan in UK

Marketing insight contd..

Customer needs propel a new product category or subcategory: Dual trends; SoBe A new technology leads the development of a product category or subcategory: Asahi

super cry beer V/S Kirin

A company exploits changing technologies to invent a new category: TiVo Inc. Home TVs

Electrolux AB

Polarized between the low and high end segments

Bajaj Auto:

Abandon weaker products and concentrate on more profitable and new ones

Change the course

Market Modifications Product Modifications Marketing Program Modifications

Market modification
Volume= number of brand users* usage rate per user Increase no. of brand users: convert non

consumers, enter new market segments, attract competitors customers

Increase usage rate among users: have

consumers use the product on more than one occasion, have consumers use more of the product on each occasion, have consumers use product in new ways

Product modification

Quality improvement

Feature improvement

Style improvement

Marketing program modification

Prices Distribution Advertising Sales promotion Personal selling Services

Declining Stage
Declining sales Low cost per customer Declining profits Laggards Declining number

Floppy disk: rapid decline

Sewing machine: slow decline

Problems faced
Identifying a weak product Exit barriers

Objectives: Reduce expenditure and milk the brand

Strategies
Phase out weak products Cut price Go selective: phase out unprofitable outlets Harvesting and Divesting

References

Marketing management ; 13th edition; Kotler, Keller, Koshy and Jha