Strategies in Declining Product Markets

Table of Contents:

1. Introduction

2. Determining the Relative Attractiveness of the Declining Market

2.1. Factors Affecting the Relative Attractiveness of a Declining Market
2.2. Relative attractiveness of the Declining market for Promac Paints

3. Strategies in the Decline Phase

3.1. Possible Strategies that can be implemented
3.2. Strategies Promac Paints Can Consider During The Decline Phase

4. Conclusion: Why Promac Paints can be a Profitable survivor in the Paint Industry

5. Reference List

1. Introduction

There are many reasons why a market goes into decline, such as new technologies, changing customer characteristics or preferences, and the development of substitute products. (Cant & Machado; 273) Promac Paints have successfully established itself in the building and painting market and have grown tremendously within a ten-year period.

The launching of a revolutionary and inexpensive coating may possibly pose as a substantial threat to Promac Paints’ strong position in the market and may move Promac Paints into the declining stage of its product life cycle. Because of this, Promac Paints will have to consider the relative attractiveness of the market and decide on which strategies to follow in this possible declining phase. Before an organisation considers whether to divest or liquidate, it is important to analyse a market for its relative attractiveness, since not all markets decline at the same rate or in the same manner. (Cant & Machado; 273)

2. Determining the Relative Attractiveness of the Declining Market

2.1. Factors Affecting the Relative Attractiveness of a Declining Market

Promac Paints should consider three factors to help establish the attractiveness of a declining market: • Conditions of Demand This entails establishing the rate of decline which will determine whether there can be orderly withdrawal, or if quick and drastic action is needed. (Cant & Machado; 273) •