Re-generating a mature market
A SmithKline Beecham case study

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Page 1: Introduction

Smithkline Beecham 2 Image 1Conventional wisdom tells us that most products have a limited life-cycle. Initially the product may flourish and grow, eventually the market will mature and finally the product will move towards decline. At each stage in the product life-cycle there is a close relationship between sales and profits so that as organisations or brands go into decline, their profitability decreases.

When markets mature there is less scope for firms operating in these markets to extend the success of their existing brands. In a mature market there are likely to be a number of existing products each commanding an established share of the market. There may be little point in new firms entering the market. Competitive jockeying such a product differentiation in the form of new flavours, colours, sizes, etc. will sift out the weaker brands.

However, this case study demonstrates that there is life after what (at first) appears to be maturity. This case highlights the way in which SmithKline Beecham relaunched their Dr.Best toothbrush to radically alter perceptions and buying patterns in the German toothbrush market. The German success was then exported to many other countries thereby transforming the world toothbrush market.

The importance of creating consumer benefits

When consumers buy a product they are doing more than simply buying that product - the reality is that they are buying the “benefits” that the product creates. The successful firm will be the one which provides those benefits consumers require. Transform the benefits and you transform the product. This is the real secret of adding value to a product and is one of the most important lessons that a student can learn about business. On the surface there are often clear and tangible benefits to particular products such as:

  • SIZE

Added to these are the intangible benefits such as after sales service, prestige, guarantees and customer care policies. Successful businesses are ones which recognise that today’s consumers often require products to do more than meet minimum requirements. For example, people rarely buy cars simply to take them from A to B. Rather they want to travel from A to B in comfort, style and safety. Manufacturers who are able to provide these extended dimensions are the ones most likely to be successful.

Product benefits can be broken down into a number of important dimensions, of which we shall consider three.

  • Generic dimensions are the key benefits of a particular item. Shoe polish cleans shoes. Freezers store frozen food. Toothbrushes clean, refresh and protect teeth and gums, etc.
  • Sensual dimensions of a product are those that provide sensual benefits. These include design, colour, taste, smell and texture. For example, particular toothpastes have their own appearance, texture, taste and smell. These sensual benefits of products are frequently highlighted in advertising.
  • Extended dimensions of a product include a wide range of additional benefits such as guarantees and servicing arrangements.

SmithKline Beecham | Re-generating a mature market