Product Marketing Strategy helps manufacturers with product marketing, product strategy, and marketing strategy to maximize profitability over the product life cycle.

Cash Cow or Dog

Cash CowIn the Maturity Stage of the product life cycle, you either have a Cash Cow or Dog.

Sales reach their peak in the maturity stage, while pressure remains on reducing price. The product must be defended against competitors and promoted to build stronger retail relationships. Distribution is intensive, and profits start out high but can drop quickly. The company works to maximize profits while defending market share. Instead of dealing with the president or merchandise manager, the salesperson is relegated to dealing with the buyer. It is a relationship that the buyer controls and constantly looks for more from the supplier. This takes a salesperson who is a strong negotiator, flexible and persistent. It requires relationship-building and problem-solving skills.

Everyone looks for new markets, more models and ways to increase usage or diversify. In the low-to-no-growth stage, there are two types of players. Cash cows are what everyone hopes for, but few attain. They have a high relative share in a low-growth market, and they harvest the profits.

The other position is that of the dogs. They have low market share in a low-growth market. It doesn’t usually make sense to invest heavily to gain market share unless there is some reason to believe that the market might once again move into a growth stage. It might also have some strategic importance and might be considered a “guard dog.” More than likely, it may be something that you want to divest if possible and reinvest where there is more opportunity.

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    head-and-sholders  Robert Cannon

       With over 30 years of expertise in marketing, and leadership, Bob creates innovative systems, 
       products and services for small to mid-size manufacturers. Contact Bob today for more information 
       on the Cannon Advantage services and solutions.