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Mature & declining markets

Mature & declining markets. Mature market strategies. Objective -- “Maximize the flow of profits over the remaining life of the product-market” (p. 447) “Maintain and protect the business’ market share” (p. 447) Fortress defense Flanker brands Niche strategy. Mature market strategies.

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Mature & declining markets

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  1. Mature & declining markets

  2. Mature market strategies • Objective -- “Maximize the flow of profits over the remaining life of the product-market” (p. 447) • “Maintain and protect the business’ market share” (p. 447) • Fortress defense • Flanker brands • Niche strategy

  3. Mature market strategies Customer retention & loyalty • Crucial in most mature markets • Related to satisfaction

  4. Mature market strategies • To retain customers, measure: • Expectations • Perceptions • Satisfaction • Behavior • Retention rate • Frequency of purchases • % of total purchases in category

  5. Mature market strategies • Market penetration • new users within current markets (increased penetration) • new uses for current customers (extended use) • more usage per consumer (extended use) • Market development (market expansion) • Product development (increased penetration?)

  6. Mature market strategies • Sources of sustainable competitive advantage • Cost leadership • Differentiation

  7. Ways to achieve cost leadership (from text) • No-frills product • Innovative product design • Cheaper raw materials • Innovative production processes • Low-cost distribution • Reductions in overhead

  8. Bases for differentiation • Product differentiation • Features • Performance • Durability • Reliability • Repairability • Style • Design

  9. Personnel competence courtesy credibility reliability responsiveness communication High service quality delivery installation customer support Bases for differentiation (cont’d)

  10. Service quality model (p. 444) Word-of-mouth communications Personal Needs Past Experience Expected Service

  11. Service quality model (p. 444) Expected Service Gap 5 Perceived Service Gap 4 External communication to consumers Service Delivery Gap 1 Gap 3 Translation of perceptions into service quality specifications Gap 2 Management perceptions of consumer expectations

  12. Strategies for declining markets (p. 457) • Harvesting • Maintenance • Profitable survivor • Niche

  13. Strategies for declining markets (p. 457) • Harvesting • Avoid additional investment • Reduce expenditures • Promotion • Marketing • Production?

  14. Strategies for declining markets (p. 457) • Conditions for harvesting • Leading share position • Existing base of loyal customers • Few strong competitors • Future rivalry not intense • Low exit barriers

  15. Strategies for declining markets (p. 457) • Maintenance • Maintain share in short term

  16. Strategies for declining markets (p. 457) • Conditions for maintenance • Leading share position • Future direction uncertain • Few strong competitors

  17. Strategies for declining markets (p. 457) • Profitable survivor • Increase share of market • Encourage weaker competitors to exit

  18. Strategies for declining markets (p. 457) • Conditions for profitable survivor • Slow and steady market decline • Substantial pockets fo demand will continue to exist • Leading share position • Superior resources or competencies necessary to encourage competitors to exit • Few strong competitors • Low exit barriers

  19. Strategies for declining markets (p. 457) • Niche • Strengthen position in a profitable niche

  20. Strategies for declining markets (p. 457) • Conditions for niche • Niches will remain in the market • Strong competitors absent from the target market • Sustainable competitive advantage in niche

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