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Addressing Competition and Driving Growth

The document discusses various competitive strategies and marketing approaches for different stages of a product life cycle. It covers strategies for market leaders to expand or protect market share such as developing new customers or defending market position. The document also examines strategies for market challengers, followers, and niche players along with adapting marketing based on a product's growth, maturity, or decline.

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Fahim Ahmed Yeamin
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© © All Rights Reserved
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Download as PDF, TXT or read online on Scribd
75 views

Addressing Competition and Driving Growth

The document discusses various competitive strategies and marketing approaches for different stages of a product life cycle. It covers strategies for market leaders to expand or protect market share such as developing new customers or defending market position. The document also examines strategies for market challengers, followers, and niche players along with adapting marketing based on a product's growth, maturity, or decline.

Uploaded by

Fahim Ahmed Yeamin
Copyright
© © All Rights Reserved
Available Formats
Download as PDF, TXT or read online on Scribd
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Chapter

12
Addressing
Competition
and Driving
Growth
Growth strategies
• Building your market • International expansion
share • Acquisitions, mergers,
• Developing committed and alliances
customers and • Building an outstanding
stakeholders reputation for social
• Building a powerful brand responsibility
• Innovating new products, • Partnering with
services, and government and NGOs
experiences
Growing the Core

Make the core of the brand as


distinctive as possible

Drive distribution through both


existing and new channels

Offer the core product in new formats


or versions
Competitive Strategies
for Market Leaders
• Expanding total market
demand

• Protecting market share

• Increasing market share


Expanding total market demand
• New customers
• More usage
Protecting market share

• Proactive
marketing
– Responsive
anticipation
– Creative
anticipation
Protecting market share
• Defensive marketing
COMPETITIVE STRATEGIES FOR
MARKET LEADERS – DEFENDING MARKET SHARE

• POSITION DEFENSE - most desirable


market space in consumer’s mind
Making the brand most available to serve consumers specific purpose
E.g. Fair & Lovely has positioned Itself for the purpose of fairness

• FLANK DEFENSE - market leader to


erect outposts to:
– Protect weak front or
– As invasion base for counterattack
E.g. Coke can use Sprite against Pepsi
COMPETITIVE STRATEGIES FOR
MARKET LEADERS – DEFENDING MARKET SHARE

• PREEMPTIVE DEFENSE
• To attack before enemy starts offense
– Wage guerrilla action across market
– Achieve a grand market envelopment
E.g. Nationwide 13,000 ATMs and 4,500 branches of Bank of
America provide steep competition to other local and regional banks
COMPETITIVE STRATEGIES FOR
MARKET LEADERS – DEFENDING MARKET SHARE

• COUNTEROFFENSIVE DEFENSE
• Leader meet attacker frontally or
• Hit its flank or
• Launch a pincer movement
• Exercise of economic/political clout
E.g. FedEx invested on ground Delivery after UPS invade its airborne
delivery system
COMPETITIVE STRATEGIES FOR
MARKET LEADERS – DEFENDING MARKET SHARE

• MOBILE DEFENSE
• Leader stretches domain over new territories -
future centers for defense & offense through:
– Market broadening - shift focus from current product
to generic need
E.g. from ‘petroleum’ company to ‘energy’ company
– Market diversification - shift into unrelated industries
E.g. from tobacco to beer
COMPETITIVE STRATEGIES FOR
MARKET LEADERS – DEFENDING MARKET SHARE

• CONTRACTION DEFENSE
• Planned contraction - strategic withdrawal:
– Large companies give up weaker territories
– Reassign resources to stronger territories
E.g. if Warid fails operating business here and reinvest in Dubai
COMPETITIVE STRATEGIES FOR
MARKET LEADERS – EXPANDING MARKET SHARE

• Improve profit if increase market share


• But cost may > revenue value
• Consider first, 4 factors :
1.May provoke antitrust action
2.Economic cost
3.Wrong marketing-mix strategy
4.Its effect on actual & perceived quality
Increasing market share
• The cost of buying higher market share
through acquisition may far exceed its
revenue value
Possibility of provoking
Economic cost
antitrust action

Pursuing wrong Increased market share


marketing activities effect on quality
Figure 12.3
Optimal Market Share
MARKET-CHALLENGER
STRATEGIES
• Defining the strategic objective and
opponent(s)

A market challenger can attack:


 The market leader
 Underfunded firms its own size
 Small local and regional firms
 The status quo
MARKET-CHALLENGER
STRATEGIES
• Choosing a general attack strategy
MARKET-CHALLENGER
STRATEGIES
WHAT attack options available?
• Frontal Attack:
• Pure frontal attack, attacker matches
opponent’s product, advertising, price &
distribution
• Unilever (2x as big as P&G): Wisk was leading, deter., added Sunlight dish
wash, Snuggle fabric softener, Surf laundry deter. Gained market share
from P&G and others.
MARKET-CHALLENGER
STRATEGIES
• Flank Attack:
• Enemy’s weak spots - natural target
– Segmental attack - serve uncovered
market needs
– Geographic attack – area opponent
underperforms
– Pepsi: slice real fruit to compete with Sprite, Fanta Coke responded
with Minute-Maid acq.
MARKET-CHALLENGER
STRATEGIES
• Bypass Attack
• Most indirect assault strategy
• Bypass enemy & attack easier markets to
broaden resource base
1.Diversify - unrelated products
2.Diversify - new geographical markets
3.Leapfrog - new technologies - supplant
current products
– Minolta: auto-focusing MAxxum, Canon dropped 20%, Minolta gained 31%
MARKET-CHALLENGER
STRATEGIES
• Encirclement Attack
• Capture wide slice of enemy’s territory through a “blitz”
• Seiko attacked watch market with channels of dist., every major outlet,
constantly changing models, US: 400 models, but 2,300 world-wide

• Guerrilla Warfare
• Wage small, intermittent attacks to harass & demoralize
opponent &
• then secure permanent footholds
• Formula 409:P&G was to intro Cinch. Test market, 409 reduced distribution,
bought up all Cinch, on Cinch rollout: 409 dropped price $1 and Cinch sales
never took off KZBQ
Market-Follower Strategies
Emulates the leader’s products, name, and
Cloner packaging with slight variations.

Copies some things from the leader but


differentiates on packaging, advertising, pricing, or
Imitator location. The leader doesn’t mind as long as the
imitator doesn’t attack aggressively.

Takes the leader’s products and adapts or


improves them. The adapter may choose to sell
to different markets, but often it grows into a
Adapter future challenger, as many Japanese firms have
done after improving products developed
elsewhere.
MARKET-NICHER
STRATEGIES
• To be a leader in a
small market
– Firms with low shares
of the total market
can become highly
profitable through
smart niching
Niche Specialist Roles

Vertical-
End-user
level
specialist
specialist

Customer-
Channel size
specialist specialist

Job-shop Geographic
specialist specialist
PRODUCT LIFE-CYCLE
MARKETING STRATEGIES
• A company’s
positioning and
differentiation
strategy must change
as its product,
market, and
competitors change
over the PLC
Figure 12.6
Common Product Life-Cycle
Patterns
Figure 12.7
Style, Fashion, And Fad Life Cycles
• A style is a basic and distinctive mode of
expression appearing in a field of human
endeavor.
• A fashion is a currently accepted or
popular style in a given field. Fashions
pass through four stages: distinctiveness,
emulation, mass fashion, and decline.
• Fads are fashions that come quickly into
public view, are adopted with great zeal,
peak early, and decline very fast.
Marketing Strategies: Introduction
Stage
• Pioneering advantages
– Recall of brand name
– Establishes product class attributes
– Captures more uses in middle of market
• Pioneering drawbacks
– Imitators can surpass innovators
– Once leadership is lost, it’s rarely regained
Marketing Strategies: Growth
Stage
• To sustain rapid market share growth now:
– Improve product quality and add new features
– Add new models and flanker products
– Enter new market segments
– Increase distribution coverage and enter new
distribution channels
– Shift from awareness and trial communications to
preference and loyalty communications
– Lower prices to attract the next layer of price-sensitive
buyers
Marketing Strategies: Maturity
Stage

Market modification

Product modification

Marketing program
modification
Marketing Strategies: Decline
Stage
• Eliminating Weak
Products

• Harvesting and
Divesting
Marketing in a Slow-Growth
Economy
 Explore upside of increasing investment
 Get closer to customers
 Review budget allocations
 Put forth compelling value proposition
 Fine-tune brand and product offerings

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