Mullins Ch16 Mature Declining Markets
Chapter 16: Strategies for Mature and Declining Markets
Take-Aways
1. Strategic choices in mature, or even declining, markets are by no means always bleak. Many of the world’s most profitable companies operate largely in such markets.
2. A critical marketing objective for all competitors in a mature market is to maintain the loyalty of existing customers. To accomplish that goal, firms must pursue improvements in the perceived value those customers receive from their offerings—either by differentiating themselves on the basis of superior quality or service, by lowering costs and prices, or both.
3. An important secondary objective for some firms, particularly share leaders, in mature markets is to stimulate further volume growth by taking actions to convert nonusers into users, to increase use frequency among current users, or to expand into untapped or under-developed markets.
4. Declining markets can still offer attractive opportunities for sales revenues and profits. Their attractiveness—and the appropriate marketing strategy to follow—depends on, among other things, the pace and certainty of market decline, the presence of exit barriers, the firm’s competitive strengths, and the likely intensity of future competition.
CHAPTER OUTLINE
I. Johnson Controls—Making Money in Mature Markets talks about Johnson Controls Inc., in Glendale, Wisconsin, that has its major businesses in batteries, seats, and other internal components for automobiles; heating and cooling equipment for large commercial buildings and schools; and facilities management services. Johnson's managers have developed a four-pronged strategy for making money in mature markets:
1. Johnson has acquired a number of weaker competitors in each of its product categories over the years in order to gain market share and remove excess capacity.
2. The firm has expanded sales volume by moving aggressively into global markets.
3. The firm has nurtured close relationships with established customers,
Take-Aways
1. Strategic choices in mature, or even declining, markets are by no means always bleak. Many of the world’s most profitable companies operate largely in such markets.
2. A critical marketing objective for all competitors in a mature market is to maintain the loyalty of existing customers. To accomplish that goal, firms must pursue improvements in the perceived value those customers receive from their offerings—either by differentiating themselves on the basis of superior quality or service, by lowering costs and prices, or both.
3. An important secondary objective for some firms, particularly share leaders, in mature markets is to stimulate further volume growth by taking actions to convert nonusers into users, to increase use frequency among current users, or to expand into untapped or under-developed markets.
4. Declining markets can still offer attractive opportunities for sales revenues and profits. Their attractiveness—and the appropriate marketing strategy to follow—depends on, among other things, the pace and certainty of market decline, the presence of exit barriers, the firm’s competitive strengths, and the likely intensity of future competition.
CHAPTER OUTLINE
I. Johnson Controls—Making Money in Mature Markets talks about Johnson Controls Inc., in Glendale, Wisconsin, that has its major businesses in batteries, seats, and other internal components for automobiles; heating and cooling equipment for large commercial buildings and schools; and facilities management services. Johnson's managers have developed a four-pronged strategy for making money in mature markets:
1. Johnson has acquired a number of weaker competitors in each of its product categories over the years in order to gain market share and remove excess capacity.
2. The firm has expanded sales volume by moving aggressively into global markets.
3. The firm has nurtured close relationships with established customers,