6.4.5 Maturity Phase¶
The Maturity Stage is characterized by a slowdown in sales growth and the stabilization of market position. It is the longest stage in the product life cycle, and the product typically becomes well-established in the market. However, competition is intense, and maintaining market share becomes more difficult. The maturity stage can be broken down into three types: Growth Maturity, Stable Maturity, and Decaying Maturity.
Key Characteristics of the Maturity Stage¶
1. Growth Maturity:¶
- Sales Growth Slows: The rate of sales growth slows down but remains positive. New customers are harder to find, and new distribution channels are not needed anymore.
- Stable Market: The market for the product becomes saturated, and growth primarily comes from population increases and replacement demand.
2. Stable Maturity:¶
- Sales Plateau: Sales begin to flatten on a per capita basis. The product reaches a point where no significant growth is possible in the target market. Revenue growth stagnates.
- Zero or Near-Zero Growth: The product’s growth slows to zero, and further sales are determined by demographic factors or the need for replacement, not new customer acquisition.
3. Decaying Maturity:¶
- Declining Sales: Absolute sales start to decline as customers begin switching to substitute products.
- Saturation and Overcapacity: The market becomes saturated, and overcapacity in the industry leads to declining demand.
- Increased Competition: New competitors or existing competitors intensify their efforts to capture market share, leading to increased marketing, price cuts, and trade promotions.
Challenges in the Maturity Stage¶
- Overcapacity: Too many products are available in the market, and there is not enough demand to sustain all competitors.
- Boredom: Consumers may grow bored of the product, leading to a loss in interest.
- Intensified Competition: As the market becomes saturated, competitors fight for a larger share, often leading to price wars and aggressive marketing.
- Customer Switching: Customers start switching to newer or more appealing substitute products that better meet their needs.
Decision Objectives in the Maturity Stage¶
At this point, companies face critical decisions: - Become One of the Big 3: Aim to be a cost leader, quality leader, or service leader in the market. - Cost Leader: Optimize distribution and manufacturing processes to offer the lowest price. - Quality Leader: Provide the highest quality product in the market. - Service Leader: Offer superior customer service and support.
- Niche Strategy: Alternatively, some companies may focus on smaller, specialized segments, offering customized products at a premium price.
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Companies can either aim for high-volume, low-margin or low-volume, high-margin strategies, depending on the product and market dynamics.
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Market Focus: Decide which markets or products to abandon and which to concentrate on. This may involve reducing product lines or shifting focus to more profitable segments.
Strategies in the Maturity Stage¶
The goal of the Maturity Stage is to stay relevant in the market for as long as possible. To achieve this, companies typically use several strategies:
1. Market Modification:¶
- Increase the Volume: Focus on increasing the usage rate or converting non-users into users.
- Example: A toothpaste brand encourages consumers to brush twice or three times a day, increasing the frequency of use.
- Expand Market Segments: Enter new demographic segments or geographic markets.
- Example: A brand targeting adults might expand into the senior citizen or child markets.
- Win Competitor's Customers: Offer promotions or incentives to attract customers away from competitors.
- Increase Product Usage: Encourage customers to use the product more frequently, thereby increasing sales.
2. Product Modification:¶
- Improve Product Quality: Enhance the product’s features, style, or design to make it more appealing.
- Add New Variants: Introduce new models, versions, or variations to refresh the product line.
- Example: A smartphone company releasing upgraded models with better features and design.
3. Marketing Mix Modification:¶
- Adjust Price, Distribution, or Promotion: Modify elements of the marketing mix, such as adjusting prices, changing promotional strategies, or expanding distribution channels.
- Example: Offering sales promotions, discounts, or bundling products to encourage purchases.
- Increase Advertising: Focus on maintaining awareness and loyalty through advertising campaigns that emphasize product benefits or emotional appeal.
Fragmentation and Reconsolidation in the Maturity Stage¶
The Maturity Stage is marked by continuous fluctuations in market share. As companies introduce promotions and discounts to gain market share, competitors do the same, leading to a constant shift in customer loyalty and market position. This creates a dynamic environment where companies must continuously adjust to maintain their position.
- Price Wars: Companies may engage in frequent price cuts or special offers to attract customers, leading to a cycle of reconsolidation and fragmentation in the market.
- Short-Term Gains: Promotions like "buy one, get one free" or "20% off" can lead to temporary increases in sales, but these may not be sustainable long-term.
Example of Maturity Stage in the Market:¶
- Toothpaste: Brands like Colgate and Oral-B have been in the maturity stage for years, focusing on increasing usage frequency (e.g., brushing more times a day), introducing new variants (e.g., with different flavors or added benefits like whitening), and running frequent promotions.
- Smartphones: Established smartphone brands like Apple and Samsung dominate the market with new models, frequent updates, and strong brand loyalty.
By executing the appropriate strategies, companies can extend their product’s life in the Maturity Stage and maintain a competitive edge before transitioning to the Decline Stage.
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