1. Strategies for Mature Markets
PPT10
Prof. S.Venkat

2. Discussion Question
1. What are some the characteristics of the
transition period [shakeout or
competitive turbulence]?

3. • Excess Capacity
– Expansion plans eventually overshoot market
demand
• More Intense Competition
– Battle for increased volume and market share
• Difficulty Maintaining Product Differentiation
– Weakening brand preference
• Distribution Problems
– Channel members may reduce the number of
brands they carry as sales diminish
• Pressures on Prices and Profits
– Prices decrease and profit margins are squeezed.

4. Discussion Question
2. What are some common strategic traps
during market shakeouts?

5. • What are some 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

7. Discussion Question
3. What are the keys to surviving
shakeouts as markets mature?

8. • Two keys to surviving shakeouts
• Sustain your competitive advantage (low
cost or differentiation), customer
satisfaction and loyalty
• Pursue growth opportunities that arise as
market and competitive conditions change

9. Discussion Question
4. In mature markets with many
competitors, what business strategies are
most successful?

10. • Both analyzer and defender strategies may
be appropriate for units with leading, or at
least a profitable share of one or more
major segments in a mature industry.
• Analyzer Strategy
– Most appropriate for developed
industries that are still experiencing some
technological change and may have
opportunities for continued growth.

11. • Defender Strategy
– Works best in industries where the basic
technology is not very complex or is unlikely to
change dramatically in the short run.
• Both analyzer and defenders can attempt to
sustain competitive advantage in established
product markets.
– Through differentiation of their product
offering (using superior quality or service)
– Through maintaining a low-cost position.

12. Discussion Question
5. In mature markets with many
competitors, how can one maintain a
differentiated position?

14. Methods of Differentiation
• Product quality
•
•
•
•
•
•
•
•
Functional performance
Durability
Conformation to specifications
Features
Reliability
Serviceability
Fit and finish
Quality reputation of the brand name

16. Methods of Differentiation
• Service Quality
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•
•
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Reliability
Responsiveness
Empathy
Assurance

20. Measure Customer Satisfaction
• Measure
– Expectations/preferences (importance)
– Perceptions on how well the firm is meeting
expectations and preferences. (satisfaction)

21. Satisfaction and Importance
Satisfaction
No
Yes
Important
Yes
Needs attention
No
Don’t Worry
Keep on
Cut Back?

22. ANALYSIS
Importance / Satisfaction Matrix
Automobile
Not Satisfied
Disgusters
Important
 Engine Power
 Transmission
 Seat comfort
Annoyances
Not Important
 Roominess
 (rear seat)
Satisfied
Delights
 Fun to drive
 Overall handling
 Vehicle safety
Niceties
 Fabric color

23. How satisfied are you with:
How important is:
 Engine power
 Smooth transmission
 Rear seat roominess
 Fabric color
 Overall handling
 Fun to drive
 Vehicle safety
 Seat comfort

24. Measure Customer Satisfaction
• Value of Loyal Customers
– Concentrate purchases (higher volume) 
lower selling/distribution costs
– Provide positive word of mouth/referrals
– May pay premium prices for the value received

26. Discussion Question
6. In mature markets with many
competitors, how can one maintain a
low-cost position?

27. Maintaining a Low-Cost Position
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•
•
•
•
•
A no-frills product
Innovative product design
Cheaper raw materials
Innovative production processes
Low-cost distribution
Reductions in overhead

28. Discussion Question
7. If you are in a mature market, what are
your strategic options for maintaining
market share?

29. Strategic Options for Maintaining Share in
Mature Markets
• Fortress defense
• Improve customer satisfaction and loyalty
• Encourage and simplify repeat purchasing
• Add flanker brands
• To fend off aggressive competitors
• Pursue niche strategy
• If low share competitor

30. Discussion Question
8. If you are in a mature market, what are
your strategic options for growing the
market

31. Strategic Options for Growing a
Mature 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 point of use
• Offer additional package sizes or designs
• Sales promotion programs
• Line extensions
• Develop and promote new uses

32. Strategic Options for Growing a
Mature Market
• Market expansion: add new geographic or
customer segments
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•
•
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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
• Domestic  less developed  well developed

35. Discussion Question
9. If you are in a declining market, what are
your strategic options and under what
circumstances might each option be
more likely to succeed?

36. Strategic Options for Declining
Markets
• Divest or Liquidate (barriers?)
• Harvest
• Maintenance
• Profitable survivor
• Niche

37. Strategic Options for Declining
Markets
• Divest or Liquidate (barriers?)
• Sell the business – sooner the better
• Harvest
• Maximize short-term cash flow; reduce expenses
to minimum; increase efficiencies
• Maintenance
• Maintain share in short term

38. Strategic Options for Declining
Markets
• Profitable survivor
• Increase share of the declining market with an
eye to future profits
• Encourage weaker competitors to exit
• Become industry leader
• Niche
• Focus on strengthening position in one or a
relatively substantial segments with potential
for future profits

39. Six Major Product Deletion Strategies
• Announce deletion decision publicly
Discontinue the product by holding a public sale of assets
(buildings, land, raw materials, work in process, and
finished goods).
• Discontinue product, but make no public announcement
Bid high on quotation requests to avoid getting new
orders.
• Become a contract manufacturer
Discontinue sales effort, but keep production facilities.
Sell product to wholesalers and retailers as private-label
purchases.
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40. Six Major Product Deletion Strategies
• Divest
Combine all the operations into a subsidiary; then offer
the subsidiary for sale.
• Become a sales agency
Discontinue manufacturing, Buy the product for resale
from a foreign supplier or former competitor, but
continue selling operations to satisfy customers.
• Sell Know-how
Sell machinery, tools, and parts to a firm (domestic or
foreign) in a noncompeting or competing area.
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44. Some Advice 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!

45. Some Advice 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.