Marketing Planning and Strategy

Late Growth Stage

Characteristics:

• Competition: As the market begins to see slower growth, companies find themselves in a highly competitive market with fierce battles occurring on some fronts, such as within certain segments, where demand is falling faster than in other segments.
• Target Market: The overall market is still growing in terms of sales volume, especially as the product spreads to the Late Majority. But there is some evidence that while sales are increasing it is occurring at a decreasing rate.
• Product: With so many competitors offering numerous product options customers feel overwhelmed and confused by the choices available. In cases where customers do not fully understand the product (e.g., technology product) they may feel more comfortable purchasing from top brands or products sold at major distributors.
• Prices: The average price is falling rapidly as market growth begins to slow and competitors struggle to maintain their market share. Price wars may break out.
• Promotion: Heavy spending on advertising and especially on sales promotions designed to offer incentives to customers to purchase and to re-purchase.
• Distribution: With demand beginning to slow, some distributors cut back on the number of products they stock and persuade leading product marketers to offer more incentives to remain with the distributor.
• Profits: Marketers begin to see a leveling off of profits as overall revenue flattens due to slowing demand and falling prices. However, marketing costs still remain high.

Brand Strategy:

Many marketers find this to be the most difficult part of the PLC. The late growth stage is a turbulent time with firms fighting just to survive. The turbulence is brought on by the slowing of growth. This is not to say that overall sales are declining but that the percentage of growth from one period to the next is declining. For instance, sales over a three-year period may show an overall increase but it is occurring at a decreasing rate compared to the previous years (e.g., 20%,15%, 10%).

The key objective for a marketer is to remain competitive by maintaining a power position (e.g., leading brand name) or by achieving an insulated position within a niche. Brands may use promotional tactics that keep existing customers happy (e.g., coupons, improved customer service) and entice new customers to try the product (e.g., rebates, extended payment, try-before-you-buy). Distribution partners are encouraged to remain loyal through such actions as special pricing, promotional assistance and special packaging.