The technology market has grown tremendously over the past couple of years, and particularly in imaging technology. From the film technology, the market is getting very digital and customers are quite cognizant of this fact, therefore any product that is still not innovative is experiencing sharp declines in sales. The traditional photographic products division of Lanen Corporation must therefore be in the decline stage, as is explained by the steady growth of the digital division.
Depending on the company’s current sales and market position, the company has a number of options and strategies that they can follow to ensure maximum benefit from the product even as it goes down. Most importantly, the company needs to do whatever needs to be done to salvage the division otherwise the division may not be able to fetch any significant returns given the change in technology that has eroded the market share of this type of product.
In order to fully address this question, one needs to analyze the four P’s of the marketing mix . These include pricing, placing, product and promotion (Holland,2012). Looking at the product, since it’s unlikely that the company would be able to diversify on this traditional product, then it’s important that the company starts to retrench, phase out those products that weak and only focus on those that may still be profitable. Profitable This means that any products that are making the least profits, or are in the loss position needs to be phased out, and turn the marketing mix to focus on the more profitable ones.
At the decline stage. It may be important to reduce the prices so as to maintain a significant revenue level. However, in doing this, it’s important that the management considers the effect of these products prices on the overall marketing mix, so as not to adversely affect other product prices (Neil, 1984). Additionally, it’s expected that the pricing should be done in such a way that the company milks every bit of revenue from the declining product before it actually becomes obsolete. As long as the product turns out any profit, then its production should go on till the return is either nil or negative when the products should be withdrawn from the market.
Placing
Since the key concern at this point should be reduction in cost, the company must concentrate on those distribution channels that are less costly. It’s pointless to spend a lot of money on a channel that is in itself a cost to the company. This means that the company may opt to concentrate in those channels in which it’s likely to ‘kill two or more birds with one stone’. Additionally, the management should consider the most cost effective channels that would also augur well with the promotion strategies.
The promotion strategies to be adopted should be trimmed down to those that would allow the very loyal customers to remain around. The company cannot afford costly promotion strategies that would be counterproductive to the business. At this stage, it’s important that the company actually concentrate on those creative channels that are cost effective and at the same time are effective in delivering the message. This is because cost is a key consideration in this stage of the product lifecycle.
References
Neil H . B. (1984) The concept of the marketing mix. Journal of advertising research, Harvard Business School
Holland,K. (2012) Marketing Mix Strategy: Decline Phase Marketing Mix: Adapted from http://www.thebeckon.com/decline-phase-marketing-mix/
