Page 177 - DMGT408DMGT203_Marketing Management

Marketing Management/Essentials of Marketing

Notes
Example: Maggi, Ponds, Lux, Maruti Suzuki Alto, etc. have all reached their maturity
stage but are still going very strong.
Marketing Mix Changes during Maturity Stage: Different brands in the product category tend to
be more similar due to technical maturity. Companies use every trick available either to increase
users or rate of usage or both, to gain volumes. Some companies try to carve out a niche in a
market segment and become a niche specialist and earn high profits.

Attempts to modify product gain more importance and only a major breakthrough in R&D or
engineering can help in differentiating the product, or reducing product costs can have significant
payout. One option is to add value that benefits the consumer to make it easier to use the product.

Example: Radio-Internet connectivity for laptop PCs, or voice-activated dialling for cell
phone is convenient for consumers.

Table 7.3: Product Life Cycle Stages, Characteristics and Standard Responses

Characteristics Introduction Growth Maturity Decline
Market Growth Rate Moderate High Insignificant Negative
Technical Change in High Moderate Limited Limited
Product Design
Market Segments Few Few to many Few to many Few
Competitors Few Many Limited Few
Profitability Negative High High for Market- Low
share leaders
Company’s Stimulate primary Gain market Gain market Harvest
Standard Responses demand share share
Product Improve quality Continue quality Concentrate on No change
improvements features
Product Line Narrow Broad Hold line length Reduce line length
Price Skimming or Reduce Hold or reduce Reduce
Penetration
Promotion High High High or reduce Reduce
Distribution Selective Intensive Intensive Selective

Firms are increasingly using additional services in an attempt to differentiate the offering.
Prices and expenditures on promotion during the maturity stage generally remain stable.
However, the promotion emphasis shifts from advertising to various tools of sales promotion
such as discounts, coupons, premiums, and store promotions etc. The impact of experience on
costs and prices narrows down. Severity of competition to gain market share leadership or
defend leadership position forces prices down. For consumer goods companies, distribution
and shelf space acquire more importance.

Task Look into the history of LUX soap and draw its product life cycle. Also try
to determine the strategies adopted by the brand at each stage.

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