product life cycle - maturity stage
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PowerPoint Presentation for "Maturity Stage" product life cycleTRANSCRIPT
Maturity Stage
What is Maturity Stage?
What is Maturity Stage?A period of slowdown in sales growth because the product
has already achieved acceptance by most potential
buyers. Profits stabilize or decline because of increased
competition.
Maturity Stage This stage is characterized further by the following: Sales settle down as the
product becomes well-known;
Price reductions are used as a tool of competition;
Competition is intensified; and
The market becomes saturated.
3 Sub stagesGrowth maturity - holds some remnants from the last major product life cycle stage, growth stage. Though all distributions channels are full, new competitors may enter the market and try to undercut in prices or rise above with value.
Stable maturity - is the classic feature of the mature stage because sales completely flatten and the market becomes completely saturated for all competitors.
Decaying maturity - guides the product into the last major product life cycle stage, decline stage.
Marketing mix decisions may
include:Product - Modifications are made and features are added in order to differentiate the product from competing products that may have been introduced.Price - Possible price reductions in response to competition while avoiding a price war.Place - New distribution channels and incentives are given to resellers in order to avoid losing shelf space.Promotion - Emphasis on differentiation and building of brand loyalty. Incentives to get competitors' customers to switch
Stages Introduction
Growth Maturity
Decline
Objectives Create product
awareness and Trial
Maximize market share
Maximize profits and
defend market share
Reduce expenses & milk brands
Sales Low Sales Rapidly Increasing
Sales
Peak Sales Declining Sales
Costs High cost per
customer
Average cost per
customer
Low cost per
customer
Low cost per
customer
Profits Negative More Profit High Profit Declining Profit
Customer Innovators Early Adopters
Early Majority +
Late Majority
Laggards
Competitor
Few More in number
Stable number,
beginning to decline
Declining numbers
Marketing Strategies
When the company is the leader in a mature market, it must aim at maintaining and
protecting its market share. In this case, the marketing strategies that can be followed
coincide with those in the growing markets. Fortress or defense position Flanker Confrontation Market expansion Contraction or strategic withdrawal
Product ModificationManagers try to stimulate sales by modifying product characteristics which can be done in three ways:
Improvement in qualityImprovement in featuresImprovement in style and
looks
Product ModificationQuality improvement tries to increase the final performance of a particular product in terms of:DurabilityReliability Feature improvement aims at improving:UsabilityVersatilitySafety
Style improvement aims at increasing products’ aesthetic appeal.
Product ModificationExamples
Market Modification
Sales volume can be increased by influencing
constituent variants or by modifying the market
itself.
In depth market modification strategies
Extensive penetration strategy – aims at converting current non-users to users in the target market. The conditions favoring the implementation of this strategy are the following:
There is large number of non-users; Competitors hold relatively small market shares,
and have limited resources;
Extensive penetration strategyThe marketing tools that can be used as part of the extensive penetration strategy include:
• Increasing the value of the product by adding new
features or services• Enhancing distribution coverage
through innovative networks;• Sales promotion in the form of
couponing, tie-in sales and sampling
In depth market modification strategies
Use expansion strategy – aims to expand the use of the product
by current users.This can be achieved through the following three methods:
Increases in the frequency of use; -providing reminder communications, positioning
for frequent or regular use, making the use easier or more convenient, providing incentives, reducing undesirable consequences of frequent
use.
Increases in the quantity used; - providing reminder communications, using incentives, affecting the usage level norms, reducing undesirable consequences of increased use level, developing positive associations with use occasions.
Development of new product uses. - using the product on different occasions, at different locations and for different purposes.
Use expansion strategy
In depth market modification strategies
New market strategy – aims at serving yet unreached segments. This strategy can take the form of geographic expansion, defining a new market and distribution channel.
There are certain conditions under which the new market strategy is highly applicable, namely:
Certain regions are underserved The market can be segments using a
variety of segmentation criteria; The market leader has sufficient
resources to cultivate underdeveloped new market segments; Competitors have insufficient resources
to preempt underdeveloped segments.
New market strategy
Some marketing tactics, which can be used as part of the new market strategy, includes:
o Line extensions especially developed with new features for regional or application segments;
o Advertising and sales promotions emphasizing product features and applications;
o Distribution networks that allow access to the underserved segments.
New market strategy
GROUP ABSBA-Mm3A
Agban, ZandroCembrano, AllisonFernandez, Elsa
Joven, JoyPalabasan, Miguel
Soriano, Madel