Strategies for Mature Markets
PPT10
Prof. S.Venkat
Discussion Question
1. What are some the characteristics of the

transition period [shakeout or
competitive turbulence]?
• Excess Capacity
– Expansion plans eventually overshoot market
demand

• More Intense Competition
– Battle for increased ...
Discussion Question
2. What are some common strategic traps

during market shakeouts?
• What are some common strategic traps
during market shakeouts?
– Failure to anticipate transition from growth to
maturity...
Discussion Question
3. What are the keys to surviving
shakeouts as markets mature?
• Two keys to surviving shakeouts
• Sustain your competitive advantage (low
cost or differentiation), customer
satisfactio...
Discussion Question
4. In mature markets with many
competitors, what business strategies are
most successful?
• Both analyzer and defender strategies may
be appropriate for units with leading, or at
least a profitable share of one o...
• Defender Strategy
– Works best in industries where the basic
technology is not very complex or is unlikely to
change dra...
Discussion Question
5. In mature markets with many
competitors, how can one maintain a
differentiated position?
Methods of Differentiation
• Product quality
•
•
•
•
•
•
•
•

Functional performance
Durability
Conformation to specificat...
Methods of Differentiation
• Service Quality
•
•
•
•

Reliability
Responsiveness
Empathy
Assurance
Measure Customer Satisfaction
• Measure
– Expectations/preferences (importance)
– Perceptions on how well the firm is meet...
Satisfaction and Importance
Satisfaction

No

Yes

Important
Yes

Needs attention

No

Don’t Worry

Keep on

Cut Back?
ANALYSIS
Importance / Satisfaction Matrix

Automobile
Not Satisfied
Disgusters

Important

 Engine Power
 Transmission
...
How satisfied are you with:
How important is:
 Engine power
 Smooth transmission

 Rear seat roominess
 Fabric color
...
Measure Customer Satisfaction
• Value of Loyal Customers
– Concentrate purchases (higher volume) 
lower selling/distribut...
Discussion Question
6. In mature markets with many
competitors, how can one maintain a
low-cost position?
Maintaining a Low-Cost Position
•
•
•
•
•
•

A no-frills product
Innovative product design
Cheaper raw materials
Innovativ...
Discussion Question
7. If you are in a mature market, what are
your strategic options for maintaining
market share?
Strategic Options for Maintaining Share in
Mature Markets
• Fortress defense
• Improve customer satisfaction and loyalty
•...
Discussion Question
8. If you are in a mature market, what are
your strategic options for growing the
market
Strategic Options for Growing a
Mature Market

• Increased penetration: adding new users
• Line extensions
• Systems selli...
Strategic Options for Growing a
Mature Market

• Market expansion: add new geographic or
customer segments
•
•
•
•

Develo...
Discussion Question
9. If you are in a declining market, what are
your strategic options and under what
circumstances migh...
Strategic Options for Declining
Markets
• Divest or Liquidate (barriers?)
• Harvest
• Maintenance
• Profitable survivor
• ...
Strategic Options for Declining
Markets
• Divest or Liquidate (barriers?)
• Sell the business – sooner the better

• Harve...
Strategic Options for Declining
Markets
• Profitable survivor
• Increase share of the declining market with an
eye to futu...
Six Major Product Deletion Strategies
• Announce deletion decision publicly
Discontinue the product by holding a public sa...
Six Major Product Deletion Strategies
• Divest
Combine all the operations into a subsidiary; then offer
the subsidiary for...
Some Advice for Marketers in
Mature Markets
• Don’t give up - think strategically. Most of the
world’s leading companies a...
Some Advice for Marketers in
Declining Markets
• Again, don’t give up - think strategically.
Money can be made in declinin...
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  1. 1. Strategies for Mature Markets PPT10 Prof. S.Venkat
  2. 2. Discussion Question 1. What are some the characteristics of the transition period [shakeout or competitive turbulence]?
  3. 3. • Excess Capacity – Expansion plans eventually overshoot market demand • More Intense Competition – Battle for increased volume and market share • Difficulty Maintaining Product Differentiation – Weakening brand preference • Distribution Problems – Channel members may reduce the number of brands they carry as sales diminish • Pressures on Prices and Profits – Prices decrease and profit margins are squeezed.
  4. 4. Discussion Question 2. What are some common strategic traps during market shakeouts?
  5. 5. • What are some common strategic traps during market shakeouts? – Failure to anticipate transition from growth to maturity – No clear competitive advantage – Assumption that an early advantage will insulate the firm from price or service competition – Sacrificing market share in favor of short-run profit
  6. 6. Discussion Question 3. What are the keys to surviving shakeouts as markets mature?
  7. 7. • Two keys to surviving shakeouts • Sustain your competitive advantage (low cost or differentiation), customer satisfaction and loyalty • Pursue growth opportunities that arise as market and competitive conditions change
  8. 8. Discussion Question 4. In mature markets with many competitors, what business strategies are most successful?
  9. 9. • Both analyzer and defender strategies may be appropriate for units with leading, or at least a profitable share of one or more major segments in a mature industry. • Analyzer Strategy – Most appropriate for developed industries that are still experiencing some technological change and may have opportunities for continued growth.
  10. 10. • Defender Strategy – Works best in industries where the basic technology is not very complex or is unlikely to change dramatically in the short run. • Both analyzer and defenders can attempt to sustain competitive advantage in established product markets. – Through differentiation of their product offering (using superior quality or service) – Through maintaining a low-cost position.
  11. 11. Discussion Question 5. In mature markets with many competitors, how can one maintain a differentiated position?
  12. 12. Methods of Differentiation • Product quality • • • • • • • • Functional performance Durability Conformation to specifications Features Reliability Serviceability Fit and finish Quality reputation of the brand name
  13. 13. Methods of Differentiation • Service Quality • • • • Reliability Responsiveness Empathy Assurance
  14. 14. Measure Customer Satisfaction • Measure – Expectations/preferences (importance) – Perceptions on how well the firm is meeting expectations and preferences. (satisfaction)
  15. 15. Satisfaction and Importance Satisfaction No Yes Important Yes Needs attention No Don’t Worry Keep on Cut Back?
  16. 16. ANALYSIS Importance / Satisfaction Matrix Automobile Not Satisfied Disgusters Important  Engine Power  Transmission  Seat comfort Annoyances Not Important  Roominess  (rear seat) Satisfied Delights  Fun to drive  Overall handling  Vehicle safety Niceties  Fabric color
  17. 17. How satisfied are you with: How important is:  Engine power  Smooth transmission  Rear seat roominess  Fabric color  Overall handling  Fun to drive  Vehicle safety  Seat comfort
  18. 18. Measure Customer Satisfaction • Value of Loyal Customers – Concentrate purchases (higher volume)  lower selling/distribution costs – Provide positive word of mouth/referrals – May pay premium prices for the value received
  19. 19. Discussion Question 6. In mature markets with many competitors, how can one maintain a low-cost position?
  20. 20. Maintaining a Low-Cost Position • • • • • • A no-frills product Innovative product design Cheaper raw materials Innovative production processes Low-cost distribution Reductions in overhead
  21. 21. Discussion Question 7. If you are in a mature market, what are your strategic options for maintaining market share?
  22. 22. Strategic Options for Maintaining Share in Mature Markets • Fortress defense • Improve customer satisfaction and loyalty • Encourage and simplify repeat purchasing • Add flanker brands • To fend off aggressive competitors • Pursue niche strategy • If low share competitor
  23. 23. Discussion Question 8. If you are in a mature market, what are your strategic options for growing the market
  24. 24. Strategic Options for Growing a Mature Market • Increased penetration: adding new users • Line extensions • Systems selling • Added value services • Expand distribution • Extended use: adding new uses or increasing frequency of use • Move product inventories closer to point of use • Offer additional package sizes or designs • Sales promotion programs • Line extensions • Develop and promote new uses
  25. 25. Strategic Options for Growing a Mature Market • Market expansion: add new geographic or customer segments • • • • Develop a differentiated flanker brand Develop multiple line extensions Produce private labels Design marketing campaigns that address specific interests of potential customers • Build unique distribution channels • Enter global markets • Domestic  less developed  well developed
  26. 26. Discussion Question 9. If you are in a declining market, what are your strategic options and under what circumstances might each option be more likely to succeed?
  27. 27. Strategic Options for Declining Markets • Divest or Liquidate (barriers?) • Harvest • Maintenance • Profitable survivor • Niche
  28. 28. Strategic Options for Declining Markets • Divest or Liquidate (barriers?) • Sell the business – sooner the better • Harvest • Maximize short-term cash flow; reduce expenses to minimum; increase efficiencies • Maintenance • Maintain share in short term
  29. 29. Strategic Options for Declining Markets • Profitable survivor • Increase share of the declining market with an eye to future profits • Encourage weaker competitors to exit • Become industry leader • Niche • Focus on strengthening position in one or a relatively substantial segments with potential for future profits
  30. 30. Six Major Product Deletion Strategies • Announce deletion decision publicly Discontinue the product by holding a public sale of assets (buildings, land, raw materials, work in process, and finished goods). • Discontinue product, but make no public announcement Bid high on quotation requests to avoid getting new orders. • Become a contract manufacturer Discontinue sales effort, but keep production facilities. Sell product to wholesalers and retailers as private-label purchases. 39
  31. 31. Six Major Product Deletion Strategies • Divest Combine all the operations into a subsidiary; then offer the subsidiary for sale. • Become a sales agency Discontinue manufacturing, Buy the product for resale from a foreign supplier or former competitor, but continue selling operations to satisfy customers. • Sell Know-how Sell machinery, tools, and parts to a firm (domestic or foreign) in a noncompeting or competing area. 40
  32. 32. Some Advice for Marketers in Mature Markets • Don’t give up - think strategically. Most of the world’s leading companies and brands serve mature markets. • A key imperative: maintain the satisfaction and loyalty of existing customers • Find avenues for market growth: someone will, so it might as well be you!
  33. 33. Some Advice for Marketers in Declining Markets • Again, don’t give up - think strategically. Money can be made in declining markets, depending on market conditions. • Others’ desire to exit can be your chance to grow, if you believe the market will survive. Look for opportunities to acquire your competitors for little or no cash. This can improve industry attractiveness.

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