The document discusses marketing strategies for companies facing a declining market or product. It identifies several factors for companies to consider: potential loyal customer segments that could prolong the product's life; the product's market position and ability to attract customers from competitors; the company's low-cost structure allowing prices to remain viable. It outlines strategic options such as divesting the product, harvesting remaining profits, maintaining on a smaller scale, surviving as a niche player. Finally, it advises marketers not to give up and instead look for acquisition opportunities of competitors exiting the market.

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

2. McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc. All rights reserved.
Marketing Strategy During The Decline Stage:
• Market Segment Potential. The firm might have loyal customer segments
that will continue to buy the product. If these segments are viable and
profitable, the firm should postpone the decline or slowly harvest the product.
For example, despite the decline in the DVD rental market, a substantial
number of customers like Redbox for its convenience and low prices.
• The Market Position of the Product. A product in a leading market position
with a solid image may be profitable and generate excess cash by attracting
customers from competitors’ abandoned products.
• The Firm’s Price and Cost Structure. If the firm is a low cost producer in the
industry and can maintain its selling price, the product can remain viable even
in a declining market. The firm’s cost structure could also be enhanced by no
longer having to invest in the product’s marketing program.
• The Rate of Market Deterioration. The faster the rate of market
deterioration, the sooner the firm should divest the product.
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3. McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc. All rights reserved.
Strategic Options For Declining Markets
•Divest
•Harvest
•Maintenance
•Profitable survivor
•Niche
• Instructor: Build a discussion around Exhibit 10.12
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4. McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc. All rights reserved.
10-4
A Note 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.

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