This document discusses marketing strategies for mature markets. It recommends that firms in mature markets focus on generating cash flow, holding market share, and stealing market share from competitors. Additional strategies include increasing a firm's share of each customer's needs, differentiating products through quality and service, maintaining a low cost position, and pursuing options to grow the market such as line extensions or expanding distribution. The key is to sustain competitive advantages, pursue growth opportunities, and maintain customer satisfaction in order to survive shakeouts within mature industries.

1. ][Welcome to
Marketing Strategy
Marketing Strategies During The
Maturity Stage

2. McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc. All rights reserved.
Marketing Strategy During The Maturity Stage
• Generate Cash Flow. By the time a market reaches maturity, the firm’s products
should be yielding a very positive cash flow. This is essential to recoup the initial
investment and to generate the excess cash necessary for the firm to grow and
develop new products.
• Hold Market Share. Marketing strategy should stress holding market share among
the dominant brands in the market. Firms having marginal market share must
decide whether they have a reasonable chance of improving their position. If not,
they should consider pulling out of the market.
• Steal Market Share. Any firm in a mature market can pursue this goal; however, it is
more likely to be used by firms holding weaker market positions. The key to this
strategy is to create incentives that encourage brand switching, even if only
temporarily. Even small gains in market share can lead to large increases in profits.
• Increase Share of Customer. Share of customer refers to the percentage of each
customer’s needs in a particular area met by the firm. This strategy is quite
common in financial services. Likewise, many large grocery chains increase share of
customer by adding features ranging from ready-to-eat meals to dry cleaning
services in an effort to create one-stop shopping for family needs. 1-2

3. McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc. All rights reserved.
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
1-3

4. McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc. All rights reserved.
Keys To Surviving Shakeouts in Mature Markets
•Sustain your competitive advantage (low cost or
differentiation), customer satisfaction and loyalty
•Pursue growth opportunities that arise as market
and competitive conditions change
1-4

5. McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc. All rights reserved.
How to Differentiate -
In Mature Market With Many Competitors
• Product quality
• Functional performance
• Durability
• Conformation to specifications
• Features
• Reliability
• Serviceability
• Fit and finish
• Quality reputation of the brand name
• Service Quality
• Reliability
• Responsiveness
• Empathy
• Assurance
1-5

6. McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc. All rights reserved.
Maintaining a Low Cost Position -
In Mature Market With Many Competitors
•A no-frills product
•Innovative product design
•Cheaper raw materials
•Innovative production processes
•Low-cost distribution
•Reductions in overhead
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7. McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc. All rights reserved.
Maintaining Market Share -
In Mature Market With Many Competitors
•Fortress defense
•Add flanker brands
•Pursue niche strategy
1-7

8. McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc. All rights reserved.
Strategic Options For Growing The 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 the point of use
• Offer additional package sizes or designs
• Sales promotion programs
• Line extensions
• Develop and promote new uses
• 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
1-8

9. McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc. All rights reserved.
10-9
A Note 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!

10. McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc. All rights reserved.
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