Pertemuan Keduapuluhempat
Marketing Strategies for Mature and Declining Markets
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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
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• 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
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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
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– Vertical integration
– Single-product competitors
• Rivalry determinants:
– Customer industries
– Customer switching costs
– Diseconomies of scale
– Dissimilar strategic groups
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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.
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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.
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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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