A Good Relives!

In the decline stage of the product life cycle, the market for a product is shrinking, and demand gradually diminishes as consumers find lesser value in the product over time.  Products are no longer as attractive as before when substitutes offering better value come along or when technological changes render those products obsolete. Consumers also, could simply be bored of the product.

To rejuvenate interest in a product within the declining stage, marketers need to employ extension strategies. Essentially, these strategies focus on manipulating the four P’s to improve a product’s perceived value. Illustrated below are some strategies with the product being a tangible good (such as a candy bar).

Prices can be reduced. When prices are lowered, the benefits to cost ratio increases, stimulating more demand and increasing sales volume. This tactic, however, has a number of drawbacks. Competition can also easily lower prices and if the focal firm follows suit, then a price war could ensue. Lowering prices also means the firm must rely on sales volume to recoup costs; if volume is too low, then profits would not reach the break-even point, putting the firm out of business. As consumers equate pricing to value in the absence of other information, a reduced price could lead consumers to believe a reduction in product quality.

Promotions can stimulate demand. Advertising communicates the key features and value of a product and how a product can better match consumer needs than a competitive offering can. Advertising venues such as TV programs, radio, billboards, or by word of mouth remind the consumer of a product’s merits. Special deals such as “Buy One Get One Free” can also stimulate demand; the drawback for this technique is that after the promotion expires, the consumer leaves and returns to buying from other vendors.

Product packaging can be changed. The revamping of a product’s wrapping can make it appear more in fashion-candy can then become eye candy. Consumers perceive subjective benefits just from viewing a product wrapping; for instance, a Mr. Freezie Pop has a snowman and snowflake, winter design on its wrapping to convey the taste of winter into the recipient’s mouth.

A new market segment can be targeted (market development). New markets exist in other geographical locations. A product that becomes obsolete in one country may be newly introduced into another! Related to the 4^th P-Place-the selling venue could change from in-store retail to online retail. Sales made from a firm’s website target those consumers who don’t prefer commuting to stores and who value the convenience of one click shopping.

It is important to realize that whichever extension strategy is chosen must reflect the firm’s overarching missions and goals; so, for instance, a firm would not lower prices or sell a product in a venue such as Walmart if its mission is to retain an image of high quality and prestige.

Lastly, it is best to prevent a product from ever entering the decline stage by constant improvements, evolving it to match the changing market.