What is a Thin Market?

In a narrow sense, suppressing marketing is the opposite of marketing. The term was quite popular in the early 1970s. At the time, the Arab crude embargo caused a shortage of supplies.

Market dilution strategy

Right!

In a narrow sense, suppressing marketing is the opposite of marketing. The term was quite popular in the early 1970s. At the time, the Arab crude embargo caused a shortage of supplies.

Suppress marketing is to temporarily or permanently suppress the needs of the general public or customers at a specific level. Suppression marketing strategies can be implemented in different ways. One way is to track the time needs of different customers, so suppose one customer s demand for the product is in July and the other in September, even if the latter places an order first, the former will still get the product first. The second method is to use a limited supply fairly for different customers. Shell Oil Company used this method when the oil shortage was at the end of 1978, stipulating that each customer can only add up to 10 gallons of oil at a time. The third way is to advise customers to temporarily use another alternative product. The fourth way is for customers with immediate needs to negotiate with customers who have recently acquired the product and are less likely to use it immediately. The company becomes the medium between the two. When customers are in urgent need today, suppliers provide products to customer.

Suppression of marketing strategies is to maintain customer loyalty when customer needs cannot be properly met. By helping customers in different ways as described above, the company hopes that the way to suppress marketing is temporary, and when the situation improves, customers can still prefer this company. In the long run, restraint market strategies can achieve increased profits.

Chinese name

Market dilution strategy

Attributes

Suppress marketing as the opposite of marketing

Nature

Customers can still prefer this company

Features

Achieve profit increase

The company must implement a conscious investigation into those markets that cannot provide the same compensation as the company's betting resources in other markets, and these markets have become the object of consideration. For the company as a whole, excluding marginal markets can provide higher growth rates. Take two markets as an example. Take the original investment of 1 million US dollars, one of which has a 10% return and the other 20%. After 15 years, the first equity is worth 4 million US dollars, and the second is $ 16 million. Excluding markets that are slower in growth than the company's other markets, and betting funds in high-growth, high-reward markets can improve return on investment and growth rates. A few years ago, A & P closed more than 100 stores in less competitive markets, eliminated its strategy to help the company consolidate its market position, and focused on markets where it thought it was stronger. Eliminating marginal markets also helps restore balance. When there are too many different and difficult markets, the company may lose balance. By using the elimination strategy, the company can be restricted to operate in the growing market, because the growing market requires a large amount of investment (in the form of price reduction, promotion and market development), and the company has limited resources, so the elimination strategy is quite advantageous. For example, Chrysler exited the European market in 1978 to use its limited resources to restore its position in the US market. Eliminating market strategies is particularly useful for achieving market share and profitability.

In most industries, a small number of customers account for the majority of sales. This feature can also be applied to the market at the same time. If the market classification is appropriate, the company will find that a few markets account for the majority of revenue sources. In these key market strategies, additional attention must be paid to sales, after-sales service, product reliability, and so on. In fact, companies may decide to confine their operations to these key markets.

Key market strategies require:

(1) Focus on the environmental differences (for example, don't do everything blindly, but choose a method carefully based on the market environment and different focus of competition).

(2) Reputation for high quality (for example, producing high-quality products with high potential performance and reliability).

(3) Provide high quality at medium to low relative prices.

(4) Low cost can provide high-quality, low-price products while maintaining high profits.

Harvesting strategy means a situation where a company decides to deliberately reduce its market share. The harvesting strategy may be for several reasons: increasing a much-needed cash inflow, increasing short-term surpluses, or avoiding antitrust sanctions. Usually, only companies with high market share can successfully harvest. If the product has reached a stage where there is no longer a reasonable return on investment, then the company wants to make use of higher prices, lower quality, and reduced advertising to make the active brand a negative one to achieve short-term profits. In any event, product sales decline, but revenues are still credited for years.

Because the company's strategic flexibility is reduced, exit barriers may prevent the company from implementing harvesting strategies. Exit barriers refer to an industry environment that enables competitors who are not performing well in this industry to dispel the idea of exit. There are three barriers to exit:

(1) The secondary market for company assets is not active.

(2) Intangible strategic obstacles prevent timely withdrawal (for example: the value of the channel network, the customer's goodwill for other company products, or a strong organization identified by this product).

(3) Management is unwilling to terminate the product line in question. Harvesting strategies are used when barriers to entry disappear or their effects do not need to be considered.