Marketing Mix Strategy: Decline phase marketing mix
Are you familiar with the term “marketing mix”? If so, how is your marketing mix strategy evolving as you go through the product life cycle? Is it possible to optimize the marketing mix in order to effectively capture more market share?
As a product moves through the product life cycle, it’s very likely that it will face different sets of challenges, depending on which phase of the life cycle it is in. For this reason, it is usually best to develop a unique marketing mix strategy for each phase of the product life cycle.
Here are a few insights to consider when developing a marketing mix strategy for a product in the decline phase of the life cycle. Be sure to consider how this information fits into your overal marketing and sales process.
By this point in the product life cycle, you have likely developed a somewhat diverse product line. In most cases, sales growth has slowed simply because there is no market share still “free for the taking”.
As sales growth starts to starts to slow (and eventually declines), you will want to begin phasing out the weaker items and focusing on the items that generate the most profits.
In other words, start to phase out the products that are making the least amount of profit and shift your marketing mix strategy to focus around the more profitable items.
How should I price my product?
Once your product has entered the decline phase of the product life cycle, you will likely need to reduce the price in order to maintain a significant level of revenue.
Remember though, once your product stops turning a profit, it’s probably time to pull the plug on it so be sure to set a price that allows you to milk every last bit of profit out of it. If you’ve been able to scale the production of your product, it’s likely that you can significantly cut the price and still sell a large volume of product. When setting your price for this stage of the product life cycle, be sure to consider how it fits into your overall marketing mix.
Ideally, you already have your next move in motion, so pulling the plug on the profitless product won’t be so emotionally difficult.
Likewise, as sales growth slows and market share becomes more competitive, you’ll want to start phasing out the weaker distribution channels. Most of the time it doesn’t make sense to spend money on the weaker channels; doing so is just a waste of money (money that you don’t want to waste at this point in the game).
Think strategic management when considering your distribution strategy at this point; really narrow in on distribution channels in which you can “kill two birds with one stone”. Remember, with a decline in sales growth and little market share left, your marketing mix should really be concerned with minimizing your cost and saving as much money as possible.
With that being said, really try to focus in on the channels that are the most cost-effective. Be sure to consider how this fits in with the various elements of the marketing mix, especially your promotion strategy.
In most cases, your promotion strategy will likely involve trimming your advertising budget back to a level significant enough to keep the very loyal customers around. By this time in the life cycle (again..due to a decline in sales growth and heated competition for market share) it’s not very likely that your promotion strategy is geared towards picking up very many new customers.
Be sure to keep a close eye on your promotion strategy at this point; you certainly don’t want to waste a penny of your money in this phase of the life cycle.
What does your marketing mix look like?