Market maturity

Market maturity
Primary topic
Related topics
Methods and techniques

Market maturity is the third stage of the product life cycle. There are alignment of the level of sales in the industry and the level of revenue for product group. Most products on the market today is in this phase. This stage is usually longer than the previous ones.

Market maturity can be divided into three smaller stages:

  • growth maturity - sales growth rate begins to decline
  • stable maturity - sales flattens
  • expiring maturity - sales value falls

Consumers

Consumers at this stage are mostly regular customers, who want to buy proven products or try out the product and resign from further use. This is connected with the fact that there are few new clients, and there is high cost of acquiring them.

Decline in profits is also followed by price competition. Sale becomes very sensitive to the state of the economy and profits depend greatly on cost reduction.

Objectives and activities of enterprises

The most important goal in the stage of market maturity is to maintain its current market position (consolidation of brand trust) by eg: sales promotion (contests, discounts, rebates, sweepstakes, etc.) and maintaining or extending distribution channels.


Product markets in this phase are becoming more segmented, so promotion program must be adapted according to a specific segment. Expenditure on advertising and distribution and falling prices contribute to the fact that on the market remains only the strongest manufacturers with established position, reputation or a wide range of additional services. Weaker competitors must withdraw from the industry.

Often in the market maturity stage we are dealing with the modification of an existing product, which leads to transition to the previous market growth stage.

Market maturity phase can be extremely long when the invention is a breakthrough product, the company maintains market leadership or customer tastes and product technology are relatively stable. This phase is followed by a decline in sales growth, which is associated with the saturation on the market and the appearance of the other products which meet customers needs. In this phase, managers should adapt the action specific to the current competitive position.

Proposed actions for companies in market maturity stage

The dominant competitive position:

Strong competitive position

Average competitive position

  • keep company position, find a niche and try to protect it
  • minimum or/and selective investments

Favourable competitive position

  • finding a niche or a gradual withdrawal
  • minimum investments or disinvestment

Weak competitive position

  • development or gradual withdrawal
  • selective investment or disinvestment

References