Page 171 - DMGT510_SERVICES_MARKETING

Services Marketing

Notes Maturity

This stage will witness steady sales with frenetic competition and price war. The service products
do not have any new innovations and the effort of the marketer is only to stimulate sales. The
marketer, therefore, concentrates on maximizing profits, mostly seeks differentiation, offers
wider range of products and concentrates on building relationships and long-term commitments
with the customers. Product line modifications and line extensions can be attempted here.
There is also not-so-subtle attempt at poaching customers from the competition by using sales
promotions. The marketer should make attempts at consolidating the position and maintaining
the market share. The distribution should be the widest and multiple channels can be looked
into. Retailing of computer products at this stage includes company owned outlets, discounters,
mail order catalogues, direct marketing, internet retailing, etc. The offer is clearly now ready to
jump into the augmented product level. With profits beginning to decline, the firm should go in
for niche segments, service augmentation, image building and value creation.

Decline

There is really nothing that the marketer can do if the category of the offer itself is on the decline,
like for example the services of ear cleaners, bespoke tailors or development and printing of
black-and-white films. Whatever brand development and image building the above two service
providers might do, it would be almost impossible to reverse the trend of declining preferences
by the customers.

The reasons for the decline of a particular category or certain offers have been outlined in the
previous section on PLC. The marketer then becomes reluctant to invest any more resources on
the products; on the contrary, he squeezes as much revenue or profit possible from the offer. The
considerably reduced customer base is exploited for maximum profit extraction with high price
targeting tactics. Offers are rationalized, prices are reduced, distribution is phased out and
promotional investments are minimized. Michael Porter has suggested for a service firm four
strategies to tackle their products in decline:
Leadership: When there is still potential in the market for profit exploitation, the service

firm can invest in product support to strengthen it and emerge as a strong and competitive
player.
Niche: The service marketer can analyze the total market, and identify certain specific

segments that has potential for profitability and which can decay slower than the rest.
Harvest: The marketer is all set to totally exploit the offers. While no further investments

are made, there is a serious attempt to streamline costs including reduction of attributes in
the augmented product level: customer service, warranties, training etc. The attempt is to
“milk” the investments made in the offer.
Divestment: If the marketer is savvy enough to detect the symptoms of decline early on,

the product line can be sold in the latter part of maturity or earlier part of decline stages,
at a profit.
Service products that are declining tend not to be withdrawn completely from the market, and
as a result the market is awash with them. They thus do tend to distract the attention of marketers
in particular and managers in general from those products which are stars and profit centres.

Post-mortem

Post-mortem very rarely affects services, mostly influencing managers in manufacturing and
primary activities. Banking, entertainment, insurance, consultancy or retailing does not really

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