Maturity Phase: Strategy

MATURITY PHASE
STRATEGY :
 Objective: maximize profit while defending market share
 Diversify brands/items
 Price to match or beat competition
 Intensive distribution
 Stress brand differences and benefits
 Increase promotions to encourage switching
Features- Maturity Stage
 Sales growth slows down

 The maturity stage is divided into 3 parts:
 Growth : sales growth starts declining
 Stable : sales flatten on per capita basis
 Decaying Maturity : absolute level of sales
falls
 Sales slowdown leads to overcapacity and
intense competition
Features- Maturity Stage
 Competitors look for niche markets and

engage in frequent markdowns
 Increased advertising and trade and
consumer promotion
 Increase in R&D
 Weaker competitors withdraw
 Firm must decide whether to become
one of the ‘big three’ or operate in the
niche
Examples - Maturity Stage
 Markets may become polarized

between low and high end
segments
 Example: Electrolux segmented
the market according to the
lifestyle and purchasing patterns
of about 20 different types of
users
Examples - Maturity Stage
• Bajaj the brand

synonymous with scooters
in India focuses on
motorcycles
Strategies for brands in a mature market
1. Market Modification: Expand the sales volume by

expanding two factors
Sales volume = number of brand users X usage rate per user
Expansion of no. of brand users by:

a) Convert non users- e.g. shampoo sachets
Market Modification Strategy
b) Enter new market segments-

e.g. Johnson & Johnsons baby
shampoo
c) Attract competitors’ customers-

e.g. Surf and Ariel & Surf
Market modification Strategy
Increasing the usage rate:

a) Have consumers use the product
on more occasions- e.g. Monaco
biscuits, Cadbury’s chocolates,
Nestle Milkmaid
Strategies for a mature market
b) Have consumers use the product

in new ways: e.g. daily dose of
aspirin to reduce chances of
stroke
2. Product Modification
through:
– Quality Improvement
– Feature improvement
– Style improvement
Product Modification Strategy
• Occasionally customers
may be unwilling to accept
a new, improved product
e.g. Coca- Cola and Maggi
suffered customer backlash
on trying to modify the
product
Marketing program modification
3. Marketing program modification- Stimulate sales by

modifying marketing program elements:
 Price
• Distribution
• Advertising
• Sales promotion
• Personal selling
• services
DECLINE PHASE
CHARACTERISTICS STRATEGY
 Declining sales  Objective: reduce costs

 Low costs and milk the brand
 Phase out weak models
 Declining profits  Cut price
 Declining competition  Selective distribution
 Reduce advertising to
levels needed to retain
hard-core loyalists
 Reduce promotions to
minimal levels
Reasons for Decline
• Technological advances...floppy, scooter
• Shift in consumer tastes.... Normal TV sets  Flat screen
• Competition, domestic vs foreign
How to handle ageing products

• Withdraw from smaller market segments
• Withdraw from weaker segments/ channels of distribution
• Cut promotion budget
• Reduce price
• Harvesting :
Reduce business costs , maintain sales...
a) Cut R & D costs, plant, equipment investment
b) Reduce product quality, sales force size, marginal
services, and advertising expenses.
c) Dilute product, but will increase company’s current
cash flow.
Critique of PLC Concept
 Product may seem mature but actually its nearing

an upsurge.
 It gives a product oriented picture, not market
oriented.
Market Evolution
1. EMERGENCE : 3. MATURITY
Designing products for “diffused- • Competitors cover all major
preference market” segments,
• Saturated market
• Single-niche strategy • Competitors invade each others
• Multiple- niche strategy segments, reduce others profits
• Mass-market strategy • Market growth slows down
• Market fragmentation
• Market consolidation
2. GROWTH 4. DECLINE
 If a product sells well, new firms • Demand decreases
will enter the market. WHY??
 It depends on the size of the firm • Technological advances
what its strategy will be. • Societal preferences change

Maturity Phase: Strategy

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MATURITY PHASE

 Sales growth slows down

 Competitors look for niche markets and

 Markets may become polarized

• Bajaj the brand

1. Market Modification: Expand the sales volume by

Sales volume = number of brand users X usage rate per user

Expansion of no. of brand users by:

b) Enter new market segments-

c) Attract competitors’ customers-

Increasing the usage rate:

b) Have consumers use the product

3. Marketing program modification- Stimulate sales by

 Declining sales  Objective: reduce costs

How to handle ageing products

 Product may seem mature but actually its nearing

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