The major objective of the firm that continues with the product in the decline stage of product life cycle is to survive and make some profit out of the product.
The following strategic considerations are important during this phase of product life cycle
1. Contraction Of The Product Line
Firms normally reduce their product lines to a minimum during this stage. They analyze the sales and future demand potentials of the various brands to identify the weak and strong brands. Normally, they drop the weak brands and continues with one or two of the stronger brands.
2. Withdrawal Of All Promotions
During the decline period non of the promotional tools have any significant effect on sales. Therefore, it is normal to withdraw all forms of promotions. This strategy can reduce expenses and decrease the price of the product to attract price sensitive buyers.
3. Adopt Single Distribution Channel
Firms generally adopt a single distribution network policy during the decline phase. Often this happens as many distributors do not show any interest to deal on a decaying product. Normally, the firm retains the higher volume-cost effective marketing channel and withdraws from the lower volume channels.
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4. Abandon The Product
If any of the three strategies does not work, a firm is forced to fully abandon the product. Abandon-decision may become painful for some companies who are emotionally attached with the product. However, product abandonment is a wise decision than continuing with a terminally ill product.
