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Marketing Strategies for Mature & Declining Markets

Learn how to maintain market share, stimulate growth, and navigate mature and declining markets. Discover strategies for increasing volume, harvesting cash flow, and more.

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Marketing Strategies for Mature & Declining Markets

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  1. Pertemuan Keduapuluhempat Marketing Strategies for Mature and Declining Markets

  2. Marketing Strategies for Mature Markets • Strategies for maintaining current market share: • Business objectives: maintain and protect the business’s market share. • Most obvious strategy is to strengthen market position through a fortress defense • Additional flanker brands can be helpful to maintain competitive position

  3. Strategies for Extending Volume Growth: • Stimulating additional volume growth can be an important secondary objective after innovations and/or aggressive marketing strategies. • Other strategies include : to squeeze additional volume from a mature market, increase penetration strategy, extend use strategy and market expansion strategy

  4. Environmental Attractiveness • Conditions of demand: • Speed of decline • Certainty of decline • Pockets of enduring demand • Product differentiation • Price stability • Exit barriers: • Reinvestment requirements • Excess capacity • Asset age • Resale markets for assets • Shared facilities

  5. Vertical integration • Single-product competitors • Rivalry determinants: • Customer industries • Customer switching costs • Diseconomies of scale • Dissimilar strategic groups

  6. Strategies for Declining Markets • Harvesting: maximize short term cash flow; maintain or increase margins even at the expense of a slow decline in market share. • Maintenance: maintain share in short term as market declines, even if margins must be sacrificed. • Possible survivor: increase share of the declining market with an eye to the future profits; encourage weaker competitors to exit. • Niche: focus on strengthening position in one or a few relatively substantial segments with potential for future profits.

  7. Divestment or Liquidation • When the market environment in a declining industry is unattractive or a business has a relatively weak competitive position, the firm may recover more of its investment by selling the business. • The firm divests early runs the risk that its forecast of the industry’s future may be wrong.

  8. Conclusions • Declining markets can still offer attractive opportunities for sales revenues and profits. Their attractiveness and the appropriate marketing strategy to follow depends on the pace, and certainty of market decline. • An important objective for some firms in mature markets is to stimulate further volume growth by taking actions to convert nonusers into users, to increase use frequency.

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