Directorate of distance education

Pricing
may be lower because of the new competition.
➢
Distribution
becomes more intensive and incentives may be 
offered to encourage preference over competing products.
➢
Promotion
emphasizes product differentiation.
Decline Stage 
As sales decline, the firm has several options: 
➢ Maintain the product, possibly rejuvenating it by adding new 
features and finding new uses.
➢ Harvest the product - reduce costs and continue to offer it, possibly 
to a loyal niche segment.
➢ Discontinue the product, liquidating remaining inventory or selling 
it to another firm that is willing to continue the product.
Product life cycle and supply chain design
The level of collaboration in a supply chain is closely associated with 

---

Notes
128
the product clock-speed. The collaboration spectrum on the left-hand side 
in Figure indicates, on one end, virtual companies in that they outsource 
much of their business activities through the market place. At the other end 
of the spectrum, vertical integration companies manage almost everything 
in-house from raw material production to the distribution channel and 
to the final users. In the middle of the collaborative spectrum is strategic 
alliances and joint venture. At this level, companies share benefits, risks, 
and responsibilities. A number of supply chain models are introduced in 
the following section.
The marketing mix decisions in the decline phase will depend on 
the selected strategy. For example, the product may be changed if it is 
being rejuvenated, or left unchanged if it is being harvested or liquidated. 
The price may be maintained if the product is harvested, or reduced 
drastically if liquidated.
➢ Introductory stage: Ensure that a sufficient member of channel 
members are available for adequate market coverage.
➢ Growth stage: Reinforce the adequacy of channel member coverage 
and monitor the effects of competitive products on channel member 
support
➢ Maturity stage: Motivate channel members to mitigate competitive 
impacts and investigate possibility for changes in channel structure
➢ Decline stage: Phase out marginal channel members and investigate 
impact of product deletion on channel members
Strategic product management and channel management
➢ Product differentiation
➢ Product positioning
➢ Product line extension/contraction
➢ Trading up/ trading down
➢ Product brand strategy
➢ Product service strategy

---

Notes
129