Page 313 - DMGT408DMGT203_Marketing Management

Marketing Management/Essentials of Marketing

Notes Other competitors with small shares should avoid prolonged direct confrontation with large
share firms. A small business can adopt niche strategy and focus on a smaller customer segment,
with specialised needs and preferences. A niche strategy could be very favourable when a small
sub-segment is less attractive to larger firms, or when the niche marketer can create a solid
differential advantage, or brand preference among customers.

Volume Growth Strategies

Growth rate in mature markets flattens. When this flattening of growth occurs due to the
availability of substitute products, or a definite shift in customer tastes, or changes in lifestyles
etc., it is very difficult to make a market bouncy. This slow down is because of unsuitable current
marketing programmes, such as very narrow segmentation or limited offerings, then aggressive
marketing strategies might be successful in extending the product-market life cycle into renewed
growth and additional volume growth can be pursued as an objective.
A business has choice of several strategies that can be adopted singly or in combination to gain
additional volume in a market that is viewed as mature. These volume growth strategies include
greater penetration strategy, prolonged use strategy, and market expansion strategy.

Greater Penetration Strategy: Sales volume of a market segment depends on (a) the number of
customers in the market segment, (b) the proportion of customers in that segment who actually
use the product, and (c) average rate at which customers use the product and make repeat
purchase. In case the product usage rate is very high among actual users but only a relatively
small portion of potential customers in the segment buy the product, a business might focus on
increasing the market penetration. This strategy better suits a market leader than smaller firms
with less known brands.
The business should find out the reasons why potential customers are not interested in the
product. The business might learn that potential customers are aware about the product but it
does not offer them sufficient value worth their effort and expense. The obvious solution is to
incorporate features to deliver desired benefits through line extension.

Example: A quite large number of Indian customers do not have running tap water to
clean razors. Gillette introduced a special twin-blade razor, Vector Plus for Indian customers. It
is easy to clean this razor in water kept in a mug or cup.

Prolonged Use Strategy: A prolonged use strategy makes sense when a market is well penetrated
but the average use per consumer is less frequent and/or use per occasion is low.

Example: A shampoo marketing firm discovers through market research that market
penetration is good but an average consumer uses a shampoo just twice a week and the quantity
used is just about 5ml per use occasion. In situations like this, a strategy of prolonged and/or
more quantity use per occasion may increase sales volume.

A firm might convince customers that the usage of shampoo five times a week gives better
protection against dandruff, or on each wash occasion it is better to apply shampoo once and
wash then apply a second time to derive more benefits. Sometimes firms successfully promote
new uses for its products, or for new segments.

Example: Milkmaid increased its volume by promoting its product use to prepare sweets
and desserts. Johnson & Johnson promoted the use of its baby shampoo and toilet soap for
persons with sensitive skins and increased volume.

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