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.