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 Customer retention & loyalty Crucial in most mature markets Related to satisfaction

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

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?)

Mature market strategies Sources of sustainable competitive advantage Cost leadership Differentiation

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

Bases for differentiation Product differentiation Features Performance Durability Reliability Repairability Style Design

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

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

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

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

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

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

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

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

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

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

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

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