- Published on Monday, 01 April 2013 14:58
- Bob Cannon
- 1 Comment
Declining sales define the decline stage. Profits are also declining. Costs will remain steady or decline. Now is the time to prune unprofitable distribution. Advertising should be reduced unless there is some hope of repositioning the product in an effort to prolong its life and the potential for profits. At this point your product has become a commodity. The salesperson ends up dealing with a re-buyer and often is responding to requests for quotes. The type of salesperson needed is a harvester, someone who can handle quotations, is good at prospecting, has good organization skills and is well disciplined. The buyer owns the relationship.
While two strategies are commonly followed in the decline stage — close up shop or milk the cash cows — there are a number of other good strategies that can extend the life cycle and increase the return on the original investment in the product, brand or company. Some of the options are shown below.
Product Life Cycle Decline Strategies
|New Uses||Arm & Hammer produced baking soda for many years, extending the life of the product by turning it into a deodorizer|
|New Markets||Home Depot and Lowe’s expanded business by providing do-it-yourself training on projects within their stores. Other examples might include overseas markets|
|Variations||Coca-Cola took an old product and added variations including Cherry Coke, Vanilla Coke and Diet Coke|
|Extend Technology||Jell-o utilized its knowledge about raw gelatin to create puddings, colored gelatins and snacks|
|Re-Packaging||A common practice in retail markets is introducing new labels, different container types and different sizes. Coca-Cola went from 6-oz. glass bottles to 8-oz. cans to plastic liter bottles, all helping increase consumption|
|Re-Branding||Costly but may be well worth the expense. We saw this with the new consulting company Accenture. Other examples include Datsun/Nissan and GTE/Verizon|
|Use More||Used by many companies with consumable products, as in Miller Time suggesting different times when drinking its product is appropriate.|
|Re-Position||Oldsmobile was perceived as an older person’s car until GM initiated the “This isn’t your father’s Oldsmobile” campaign. This was an attempt to reposition a brand in the decline stage of the life cycle. Not all re-positioning strategies work|
|Co-Brand||Attempts to capitalize on the association between strong brands and products. A variation is licensing a name or brand for use on another product. An example might be the Eddie Bauer Explorer or the L.L. Bean Subaru|
|Price||Price can always influence sales, as in rebates and zero interest from automakers|