5.4. mlc maturity stage

5.4. mlc maturity stage

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  ][Welcome to Marketing Strategy MarketingStrategies During The Maturity Stage
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  McGraw-Hill/Irwin © 2006The McGraw-Hill Companies, Inc. All rights reserved. Marketing Strategy During The Maturity Stage • Generate Cash Flow. By the time a market reaches maturity, the firm’s products should be yielding a very positive cash flow. This is essential to recoup the initial investment and to generate the excess cash necessary for the firm to grow and develop new products. • Hold Market Share. Marketing strategy should stress holding market share among the dominant brands in the market. Firms having marginal market share must decide whether they have a reasonable chance of improving their position. If not, they should consider pulling out of the market. • Steal Market Share. Any firm in a mature market can pursue this goal; however, it is more likely to be used by firms holding weaker market positions. The key to this strategy is to create incentives that encourage brand switching, even if only temporarily. Even small gains in market share can lead to large increases in profits. • Increase Share of Customer. Share of customer refers to the percentage of each customer’s needs in a particular area met by the firm. This strategy is quite common in financial services. Likewise, many large grocery chains increase share of customer by adding features ranging from ready-to-eat meals to dry cleaning services in an effort to create one-stop shopping for family needs. 1-2
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  McGraw-Hill/Irwin © 2006The McGraw-Hill Companies, Inc. All rights reserved. Common Strategic Traps During Market Shakeouts Failure To Anticipate Transition From Growth To Maturity • No clear competitive advantage • Assumption that an early advantage will insulate the firm from price or service competition • Sacrificing market share in favor of short-run profit 1-3
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  McGraw-Hill/Irwin © 2006The McGraw-Hill Companies, Inc. All rights reserved. Keys To Surviving Shakeouts in Mature Markets •Sustain your competitive advantage (low cost or differentiation), customer satisfaction and loyalty •Pursue growth opportunities that arise as market and competitive conditions change 1-4
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  McGraw-Hill/Irwin © 2006The McGraw-Hill Companies, Inc. All rights reserved. How to Differentiate - In Mature Market With Many Competitors • Product quality • Functional performance • Durability • Conformation to specifications • Features • Reliability • Serviceability • Fit and finish • Quality reputation of the brand name • Service Quality • Reliability • Responsiveness • Empathy • Assurance 1-5
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  McGraw-Hill/Irwin © 2006The McGraw-Hill Companies, Inc. All rights reserved. Maintaining a Low Cost Position - In Mature Market With Many Competitors •A no-frills product •Innovative product design •Cheaper raw materials •Innovative production processes •Low-cost distribution •Reductions in overhead 1-6
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  McGraw-Hill/Irwin © 2006The McGraw-Hill Companies, Inc. All rights reserved. Maintaining Market Share - In Mature Market With Many Competitors •Fortress defense •Add flanker brands •Pursue niche strategy 1-7
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  McGraw-Hill/Irwin © 2006The McGraw-Hill Companies, Inc. All rights reserved. Strategic Options For Growing The Market • Increased penetration: adding new users • Line extensions • Systems selling • Added value services • Expand distribution • Extended use: adding new uses or increasing frequency of use • Move product inventories closer to the point of use • Offer additional package sizes or designs • Sales promotion programs • Line extensions • Develop and promote new uses • Market expansion: add new geographic or customer segments • Develop a differentiated flanker brand • Develop multiple line extensions • Produce private labels • Design marketing campaigns that address specific interests of potential customers • Build unique distribution channels • Enter global markets 1-8
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  McGraw-Hill/Irwin © 2006The McGraw-Hill Companies, Inc. All rights reserved. 10-9 A Note For Marketers in Mature Markets • Don’t give up - think strategically. Most of the world’s leading companies and brands serve mature markets. • A key imperative: maintain the satisfaction and loyalty of existing customers • Find avenues for market growth: someone will, so it might as well be you!
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  McGraw-Hill/Irwin © 2006The McGraw-Hill Companies, Inc. All rights reserved.  THANK YOU 