• Marketing Strategy for Decline Stage

    Posted on April 2, 2012 by admin in Marketing.

    The main characteristics of the maturity stage which help to define the appropriate marketing strategies are

    • Sales of most product forms and brands eventually decline
    • Decline may be due to
      • Technical advances which lead to better substitutes
      • Change in customer taste with time
      • Increase in competition
    •  Lower sales volume leads to
      • Over capacity
      • Increases price cutting
      • Profit erosion

    Carrying a weak product may be very costly if there are no suitable strategic reasons to keep the prodict alive in the market. To handle declining sales, marketing strategy could be

    • Increase firms invest to dominate market/strength competitive position
    • Maintain investments in innovations and R&D until uncertainties above industry are resolved
    • Decrease firms invest, selectively by dropping unprofitable products and focus on nice areas and profitable products
    • Harvesting or divesting the product as per the GE Matrix strategic growth model.

    Appropriate marketing strategy for this phase depends completely on Industry’s relative attractiveness and Company’s strength in the industry. If the industry is attractive and company has significant strength in the industry then the company may decide to hold the product or brand even if sales volume decline during this phase.

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