AMCA Lecture Three Competitive Marketing Strategy


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AMCA Lecture Three Competitive Marketing Strategy

  1. 1. MKTG 1265 Advanced Marketing Concepts and Applications Lecture Three Competitive Marketing Strategy 1 MKTG 1265 (AMCA)
  2. 2. Agenda Competitor Analysis Positioning Strategy Application of Strategy Models in Marketing Porter’s Generic Strategies Model Ansoff Matrix Model Marketing Warfare Concepts (for further reference): Blue Ocean Strategy 3-2 MKTG 1265 (AMCA)
  3. 3. References: Week 3 - Competetive Marketing Strategy Kotler, P., Brown, L. Adam, S. and Armstrong, G., (2004) Marketing, 6th Edition, Prentice Hall, Sydney, pp. 738-768. (Chapter 19, Sustainable Competitive Advantage) Porter, M.E. and Kramer, M.R. (2006). Strategy & Society: The Link between Competitive Advantage and Corporate Social Responsibility, Harvard Business Review, December, 78-92. Cover the Kotler reading in detail; many concepts and frameworks on competitive strategies are covered here. The Porter article is also important. 5-3 MKTG 1265 (AMCA)
  4. 4. Competitor Analysis Definition: The process of identifying major competitors, assessing their objectives, strategies, strengths and weaknesses, and selecting which competitors to attack or avoid 3-4 MKTG 1265 (AMCA)
  5. 5. Evolving Company Orientations 3-5 MKTG 1265 (AMCA)
  6. 6. Competitor Oriented Company A competitor-centered company is one that spends most of its time tracking competitors’ moves and market shares and trying to find strategies to counter them. This approach has pluses and minuses. On the positive side, the company develops a fighter orientation. On the negative side, the company becomes too reactive. 3-6 MKTG 1265 (AMCA)
  7. 7. Customer Oriented Company A customer-centered company focuses more on customer developments in designing its strategies. Clearly, the customer-centered company is in a better position to identify new opportunities and set long-run strategies that make sense 3-7 MKTG 1265 (AMCA)
  8. 8. Market Oriented Company In practice, today’s companies must be market-centered companies, watching both their customers and their competitors. But they must not let competitor watching blind them to customer focusing. 3-8 MKTG 1265 (AMCA)
  9. 9. Figure 19-7 of the Reading: Figure 19-7 shows that companies have moved through four orientations over the years. In the first stage, they were product oriented, paying little attention to either customers or competitors. In the second stage, they became customer oriented and started to pay attention to customers. In the third stage, when they started to pay attention to competitors, they became competitor oriented. Today, companies need to be market oriented, paying balanced attention to both customers and competitors. 3-9 MKTG 1265 (AMCA)
  10. 10. Competitor Analysis: the Six Stages Model 1. Who the competitors are 2. What the competitors’ objectives are 3. What their strategies are 4. What their strengths and weaknesses are 5. What their reaction patterns are 6. Who to confront and how to avoid 3-10 MKTG 1265 (AMCA)
  11. 11. Steps in Analyzing Competitors 1 2 3 Identifying the Determining Identifying company’s competitors’ competitors’ competitors objectives strategies Assessing Selecting Estimating competitors’ competitors to competitors’ strengths and attack and reactions weaknesses avoid 6 5 4 3-11 Source: Kotler MKTG 1265 (AMCA)
  12. 12. 1 Identifying Competitors At the narrowest level, a company can define its competitors as other companies offering similar products and services to the same customers at similar prices. But companies actually face a much wider range of competitors. The company might define competitors as all firms making the same product or class of products. Finally, and still more broadly, competitors might include all companies that compete for the same consumer dollars 3-12 MKTG 1265 (AMCA)
  13. 13. Identifying the Competitors Competitors could be DIRECT (within the same industry or market sector) INDIRECT (competing for the consumer dollar- substitutes) LATENT (potential threats) 3-13 MKTG 1265 (AMCA)
  14. 14. Avoiding competitor myopia Companies must avoid “competitor myopia.” A company is more likely to be “buried” by its latent competitors than its current ones. Companies can identify their competitors from the industry point of view. A company must understand the competitive patterns in its industry if it hopes to be an effective “player” in that industry. Companies can also identify competitors from a market point of view. Here they define competitors as companies that are trying to satisfy the same customer need or build relationships with the same customer group. In general, the market concept of competition opens the company’s eyes to a broader set of actual and potential competitors. 3-14 MKTG 1265 (AMCA)
  15. 15. 2 Determining Competitors Objectives Each competitor has a mix of objectives. The company wants to know the relative importance that a competitor places on current profitability, market share growth, cash flow, technological leadership, service leadership, and other goals. Knowing a competitor’s mix of objectives reveals whether the competitor is satisfied with its current situation and how it might react to different competitive actions. A company must also monitor its competitors’ objectives for various segments. 3-15 MKTG 1265 (AMCA)
  16. 16. 3 Identifying Competitors Strategies The more that one firm’s strategy resembles another firm’s strategy, the more the two firms compete. A strategic group is a group of firms in an industry following the same or a similar strategy in a given target market. 3-16 MKTG 1265 (AMCA)
  17. 17. Strategic Groups Model A strategic group is a concept used in strategic management that groups companies within an industry that have similar business models or similar combinations of strategies. For example, the restaurant industry can be divided into several strategic groups including fast-food and fine-dining based on variables such as preparation time, pricing, and presentation. The number of groups within an industry and their composition depends on the dimensions used to define the groups. 3-17 MKTG 1265 (AMCA)
  18. 18. Some simplified versions of SGA BANKS AIRLINES Extensive International Fleet Size Carriers Budget Limited Carriers Domestic Regional International MKTG 1265 (AMCA) Routes
  19. 19. Uses of the SG model Helps identify who the most direct competitors are and on what basis they compete. Raises the question of how likely or possible it is for another organization to move from one strategic group to another. Strategic Group mapping might also be used to identify opportunities. Can also help identify strategic problems 3-19 MKTG 1265 (AMCA)
  20. 20. Strategic Groups - Implications Although competition is intense within a strategic group, there is also rivalry between groups. Some of the strategic groups may appeal to overlapping customer segments. Example budget versus full service airlines The customers may not see much difference in the offers of different groups. Members of one strategic group might expand into new strategy segments. The company needs to look at all of the dimensions that identify strategic groups within the industry. 3-20 MKTG 1265 (AMCA)
  21. 21. Don’t confuse Strategic Groups Model with the Market Positioning Model May look the same But SG model focuses more on the scope of business operations and the business model used (example think of how operates versus traditional book stores) The Positioning Model (perceptual map) is used in marketing to cluster different competitors based on attributes 3-21 MKTG 1265 (AMCA)
  22. 22. 4 Assessing Competitors Strengths and Weaknesses Marketers need to assess each competitor’s strengths and weaknesses carefully in order to answer the critical question: What can our competitors do? As a first step, companies can gather data on each competitor’s goals, strategies, and performance over the last few years. Companies normally learn about their competitors’ strengths and weaknesses through secondary data, personal experience, and word of mouth. 3-22 MKTG 1265 (AMCA)
  23. 23. Assessing Competitors Strengths and Weaknesses They can conduct primary marketing research with customers, suppliers, and dealers. They can benchmark themselves against other firms, comparing the company’s products and processes to those of competitors or leading firms in other industries to find ways to improve quality and performance. 3-23 MKTG 1265 (AMCA)
  24. 24. 5 Estimating Competitors’ Reactions What will our competitors do? A competitor’s objectives, strategies, and strengths and weaknesses go a long way toward explaining its likely actions. They also suggest its likely reactions to company moves such as price cuts, promotion increases, or new-product introductions. In addition, each competitor has a certain philosophy of doing business, a certain internal culture and guiding beliefs. Each competitor reacts differently. 3-24 MKTG 1265 (AMCA)
  25. 25. 6 Selecting Competitors To Attack and Avoid Strong or Weak Competitors Close or Distant Competitors “Good” or “Bad” Competitors 3-25 MKTG 1265 (AMCA)
  26. 26. Strong or Weak Competitors Most companies prefer to compete against weak competitors. This requires fewer resources and less time. But in the process, the firm may gain little. A useful tool for assessing competitor strengths and weaknesses is customer value analysis. To analyze the profiles of different competitors and compare it against the firm itself. 3-26 MKTG 1265 (AMCA)
  27. 27. An example of Competitor Profile Analysis Key success factor Our company Competitor 1 Competitor 2 Innovativeness 1 2 3 4 5 1 2 3 4 5 1 2 3 4 5 Financial strength 1 2 3 4 5 1 2 3 4 5 1 2 3 4 5 Technical assistance to customers 1 2 3 4 5 1 2 3 4 5 1 2 3 4 5 Product quality 1 2 3 4 5 1 2 3 4 5 1 2 3 4 5 Well-qualified workforce 1 2 3 4 5 1 2 3 4 5 1 2 3 4 5 Access to international distribution channels 1 2 3 4 5 1 2 3 4 5 1 2 3 4 5 3-27 MKTG 1265 (AMCA)
  28. 28. Customer Value Analysis The aim of customer value analysis is to determine the benefits that target customer value and how customers rate the relative value of various competitors’ offers. The key to gaining competitive advantage is to take each customer segment and examine how the company’s offer compares to that of its major competitor 3-28 MKTG 1265 (AMCA)
  29. 29. Close or Distant Competitors Most companies will compete with close competitors—those that resemble them the most—rather than distant competitors. At the same time, the company may want to avoid trying to “destroy” a close competitor 3-29 MKTG 1265 (AMCA)
  30. 30. Good or Bad Competitors Is competition always bad? The existence of competitors results in several strategic benefits. Competitors may help increase total demand. They may share the costs of market and product development and help to legitimize new technologies. They may serve less-attractive segments or lead to more product differentiation. They lower the antitrust risk and improve bargaining power versus labor or regulators. 3-30 MKTG 1265 (AMCA)
  31. 31. Good or Bad Competitors An industry often contains “good” competitors and “bad” competitors. Good competitors play by the rules of the industry. Bad competitors break the rules. They try to buy share rather than earn it, take large risks, and in general shake up the industry. The implication is that “good” competitors would like to shape an industry that consists of only well- behaved competitors. 3-31 MKTG 1265 (AMCA)
  32. 32. Finding Uncontested Market Spaces Rather than competing head to head with established competitors, many companies seek out unoccupied positions in uncontested market spaces. They try to create products and services for which there are no direct competitors. Later we look at ‘Blue Ocean Strategy.’ 3-32 MKTG 1265 (AMCA)
  33. 33. Competitor Intelligence System The competitive intelligence system: Identifies the vital types of competitive information and the best sources of this information; Continuously collects information from the field and from published data; Checks the information for validity and reliability, interprets it, and organizes it in an appropriate way; Sends key information to relevant decision makers and responds to inquiries from managers about competitors. 3-33 MKTG 1265 (AMCA)
  34. 34. Models in Competitive Marketing Strategy 1. Ansoff Matrix 2. Porter Generic Strategies 3. Marketing Warfare 4. Blue Ocean Strategy (optional but it is the latest model out there) 34 MKTG 1265 (AMCA)
  35. 35. Which direction Refers to long term decisions that the company must take with regards to where it should compete and what its product/service offer should be Referred to as “product-market” scope Use the Ansoff Matrix Should know the meaning of each cell in the matrix and how it can be applied specifically to marketing. 3-35
  36. 36. The Ansoff Matrix 3-36
  37. 37. © Strategy in Marketing (Pearson Asia 2009) Marketing Implications of a Market Penetration Strategy • Overall strategy: to increase volume sales in existing markets with existing product offers. The full extent of the market is untapped- need to gain greater penetration • Segmentation/Targeting: Current users • Product: no changes; stick to existing product lines • Price: could use penetration pricing in orde37r to increase sales volume • Promotions: mainly on sales promotions; generally a “push” strategy • Place: increase distribution channels/ intermediaries in order to widen availability of the product LEC3-37
  38. 38. © Strategy in Marketing (Pearson Asia 2009) Marketing Implications of a Market Development Strategy • Overall strategy: to take existing products into new markets (geographic, customer segments) • Segmentation/Targeting: New users • Product: no major changes but adaptation for new user segment • Price: use differential pricing for different segments • Promotions: targeting at new audiences; possibly reaching with different media and messages • Place: use new distribution channels to reach new segments. International marketing for geographic market expansion LEC3-38
  39. 39. © Strategy in Marketing (Pearson Asia 2009) Marketing Implications of a Product Development Strategy • Overall strategy: to launch new products and innovations. Establish market leadership position • Segmentation/Targeting: Innovators/ Early adopters • Product: Innovation (“first-in-market”) • Price: Skim pricing • Promotions: Creating awareness, educating customers about new products • Place: Selective distribution initially 3-39 LEC3-39
  40. 40. © Strategy in Marketing (Pearson Asia 2009) Apply this to Apple (examples) Market Penetration: Product Development: • Apple uses extensive •Introduction of innovative promotions and pricing to new products (i-pods/ i- increase demand for its Phone/ Macbook Air) current rang of products •Updates of product range • Cross selling of Apple (ipods+ Macbooks) products Market Development: Diversification: •Expand into new country • Bold move into digital music markets (i-Tunes) •Appoint more distributors •Movies? and resellers 3-40
  41. 41. An example of applying the Product Market Expansion Grid (Malaysian Airlines) Source: Kotler and da Silva (2006) Pearson Asia LEC3-41
  42. 42. Competitive Advantage How do companies achieve competitive advantages and how do they operationalize these advantages in marketing? 1-42 MKTG 1265 (AMCA)
  43. 43. Competitive Advantage Definition: An advantage over competitors gained by offering consumers greater value, either through lower prices or by providing more benefits that justify higher prices Organizations might deliver more customer value than their competitors by: Offering lower prices Providing more benefits, justifying higher prices Offering specialist products and services (more later when we cover Porter generic strategies) 3-43 MKTG 1265 (AMCA)
  44. 44. Competitive Advantages in Marketing Can exist in any or all aspects of the marketing mix 1. Product : quality, functions, design, branding 2. Pricing: levels versus the competitors; sources of cost advantages 3. Place: location, convenience, store image 4. Promotions: creativity, use of media, execution (integrated MC) 5. People: Customer Service 6. Processes: Service Delivery Systems 3-44 MKTG 1265 (AMCA)
  45. 45. Basic Competitive Strategies More than two decades ago, Michael Porter suggested four basic competitive positioning strategies that companies can follow—three winning strategies and one losing one. The winning strategies are: Overall cost leadership: The company works hard to achieve the lowest production and distribution costs. Differentiation: The company concentrates on creating a highly differentiated product line and marketing program. Focus: The company focuses on serving a few market segments well rather than going after the whole market. 3-45 MKTG 1265 (AMCA)
  46. 46. The meaning of each strategy: 3-46
  47. 47. © Strategy in Marketing (Pearson Asia 2009) Marketing Implications of a Differentiation Strategy Overall strategy: to achieve superiority in all aspects of marketing and business operations Segmentation/Targeting: Quality/ Value seeking customers Product: Premium product; excellent service. Strong brand equity Price: Value based pricing; higher than competitors Promotions: Creating product differentiation and brand image Place: Selective distribution 3-47
  48. 48. © Strategy in Marketing (Pearson Asia 2009) Marketing Implications of a Cost Leadership Strategy Overall strategy: to be the lowest cost player ni the market Segmentation/Targeting: Mass market; value seeking customers Product: Basic, functional, no-frills Price: Penetration pricing Promotions: Mass media advertising; sales promotions to create push effect Place: Intensive distribution 3-48
  49. 49. © Strategy in Marketing (Pearson Asia 2009) Marketing Implications of a Focus Strategy Overall strategy: Become a specialist in a given product market sector Segmentation/Targeting: Niche market segments Product: Specialist product line; deep assortment but limited range Price: Skim pricing Promotions: Focused media Place: Exclusive or selective distribution 3-49
  50. 50. Gaining Leadership Positions Through Delivering Superior Value More recently, a new classification of competitive marketing strategies has been offered. It is suggested companies gain leadership positions by delivering superior value to their customers. Companies can pursue any of three strategies—called value disciplines—for delivering superior customer value. 3-50 MKTG 1265 (AMCA)
  51. 51. Value Disciplines: Operational excellence: The company provides superior value by leading its industry in price and convenience. Customer intimacy: The company provides superior value by precisely segmenting its markets and tailoring its products or services to match exactly the needs of targeted customers. Product leadership: The company provides superior value by offering a continuous stream of leading-edge products or services. 3-51 MKTG 1265 (AMCA)
  52. 52. Marketing Warfare Concepts “How aggressovely do we compete?” 3-52 MKTG 1265 (AMCA)
  53. 53. Marketing Wars (‘battles for market share and dominance or a market position) Another way of studying marketing strategy is to observe and track major marketing wars between key competitors What turf (battle-ground= Market) are they fighting for? How are they fighting? What are the differences in the ways the rivals are competing? 3-53
  54. 54. Marketing Warfare Concepts Marketing is dynamic Competitors will react against each other The marketing mix becomes the weapons of warfare Battle terrain= Market Segments Targeting and Positioning Attack and Counter-Attack (“for every action there opposite reaction”- physics law) Competitive Posturing: adopt a stance- leader, challenger, follower, nicher 3-54 MKTG 1265 (AMCA)
  55. 55. Competitive Positions Firms competing in a given target market, at any point in time, differ in their objectives and resources. 1-55 MKTG 1265 (AMCA)
  56. 56. Strategic Positioning Market Leaders Focus on expanding total demand Defending market share is important May not wish to aggressively take more market share from rivals Market Challengers Concentrate on a single target. Attacking the leader Market Followers Compete with modest strategic objective Often use innovative imitation Compete in selective few segments Market Nichers Focus on narrow slice of the market 3-56 MKTG 1265 (AMCA)
  57. 57. Market Leader Strategies Most industries contain an acknowledged market leader. Competitors focus on the leader as a company to challenge, imitate, or avoid. To remain number one, leading firms can take any of three actions. 1. They can find ways to expand total demand. 2. They can protect their current market share through good defensive and offensive actions. 3. They can try to expand their market share further, even if market size remains constant. 3-57 MKTG 1265 (AMCA)
  58. 58. Market Leaders Strategies: Examples of marketing strategies: Superior customer knowledge 1.Expand total demand Long-term outlook Product innovation - New Users Total quality - New uses Product flanking, multiple brands, brand extension - More usage Heavy advertising Aggressive sales force Effective Promotion 2.Defend market share Quick, effective competitive response Manufacturing efficiency 3.Expand market share Brand management system 3-58
  59. 59. Market Leader Strategy #1: Expanding Total Demand The leading firm normally gains the most when the total market expands. Market leaders can expand the market by developing new users, new uses, and more usage of its products. MKTG 1265 (AMCA)
  60. 60. Market Leader Strategy#2: Protecting Market Share While trying to expand total market size, the leading firm also must protect its current business against competitors’ attacks. What can the market leader do to protect its position? 1. It must prevent or fix weaknesses that provide opportunities for competitors. 2. It must always fulfill its value promise. 3. Its prices must remain consistent with the value that customers see in the brand. 4. It must work to keep strong relationships with valued customers. 5. It should “plug holes” so that competitors do not jump in. The best defense is a good offense, and the best response is continuous innovation. MKTG 1265 (AMCA)
  61. 61. Market Leader Strategy#3:Expanding Market Share Studies have shown that, on average, profitability rises with increasing market share. Some studies have found that many industries contain one or a few highly profitable large firms, several profitable and more focused firms, and a large number of medium-sized firms with poorer profit performance. It appears that profitability increases as a business gains share relative to competitors in its served market. Companies must not think that gaining increased market share will improve profitability automatically. Much depends on their strategy for gaining increased share MKTG 1265 (AMCA)
  62. 62. Defense Strategies 2 3 Pre-emptive Flanking defence defence 1 Attacker Position 6 defence Strategic withdrawal 4 counteroffensive Defender defence 5 Mobile defence 3-62 MKTG 1265 (AMCA)
  63. 63. Market Challenger Strategies Firms that are second, third, or lower in an industry are sometimes quite large. These runner-up firms can adopt one of two competitive strategies: They can challenge the leader and other competitors in an aggressive bid for more market share (market challengers). They can play along with competitors and not rock the boat (market followers). A market challenger must first define which competitors to challenge and its strategic objective. 3-63 MKTG 1265 (AMCA)
  64. 64. Market Challenger Strategies The challenger can attack the market leader, a high-risk but potentially high-gain strategy. Its goal might be to take over market leadership. Or the challenger’s objective may simply be to wrest more market share. The challenger observes what has made the leader successful and then improves up it. This is known as the “second-mover advantage.” Alternatively, the challenger can avoid the leader and instead challenge firms its own size, or smaller local and regional firms. These smaller firms may be underfinanced and not serving their customers well. The challenger must choose its opponents carefully and have 3-64 MKTG 1265 (AMCA)
  65. 65. How can the market challenger best attack the chosen competitor and achieve its strategic objectives? It may launch a full frontal attack, matching the competitor’s product, advertising, price, and distribution efforts. It attacks the competitor’s strengths rather than its weaknesses. Rather than challenging head-on, the challenger can make an indirect attack on the competitor’s weaknesses or on gaps in the competitor’s market coverage 3-65 MKTG 1265 (AMCA)
  66. 66. Attack strategies 4. Bypass attack 2. Flanking attack 5. Guerrilla attack Attacker 1. Frontal Defender attack 3. Encirclement 3-66 MKTG 1265 (AMCA)
  67. 67. Types of attack strategies Types of attack strategy Marketing Examples 1. Frontal Attack Head on competition usually undertaken by largest competitors who have the muscle (resources) to engage in prolonged promotion or price wars. 2. Flank Attack Attack the competition on its weakest spots (example distribution) and take advantage of this weakness to grab market share. 3. Encirclement Attack Attack the competition on multiple fronts (using more than one aspect of the marketing mix strategy). 4. Bypass Attack Plan to enter markets not currently considered by competition; create “blue ocean opportunities” – fight the next war. 6. Guerilla Attack Used by smaller competitors to attack by surprise to upset strategies of larger rivals; smaller competitor then withdraws to attack 3-67 another day.
  68. 68. © Strategy in Marketing (Pearson Asia 2009) Apple versus Samsung Phones How do they compete? Design? Functionality (Apple has its own OS; Samsung uses Windows Mobile) Pricing: both are comparatively high Promotions: Apple is stronger on WOM and OL; Samsung uses media might Place: Apple appointed Telcos; Samsung uses wider distribution network 3-68
  69. 69. Market Follower Strategies Not all runner-up companies want to challenge the market leader. Challenges are never taken lightly by the leader. A follower can gain many advantages. The market leader often bears the huge expenses of developing new products and markets, expanding distribution, and educating the market. By contrast, the market follower can learn from the leader’s experience. It can copy or improve on the leader’s products and programs, usually with much less investment. Although the follower will probably not overtake the leader, it often can be as profitable. 3-69 MKTG 1265 (AMCA)
  70. 70. Market Follower Strategies Following is not the same as being passive or a carbon copy of the leader. Each follower tries to bring distinctive advantages to its target market. The follower is often a major target of attack by challengers. Therefore, the market follower must keep its manufacturing costs low and its product quality and services high. It must also enter new markets as they open up. 3-70 MKTG 1265 (AMCA)
  71. 71. Market Nicher Strategies Almost every industry includes firms that specialize in serving market niches. Instead of pursuing the whole market, or even large segments, these firms target subsegments. Nichers are often smaller firms with limited resources. But smaller divisions of larger firms also may pursue niching strategies. Why is niching profitable? The main reason is that the market nicher ends up knowing the target customer group so well that it meets their needs better than other firms that casually sell to this niche. As a result, the nicher can charge a substantial markup over costs because of the added value. Whereas the mass marketer achieves high volume, the nicher achieves high margins. 3-71 MKTG 1265 (AMCA)
  72. 72. Market Nicher Strategies Nichers try to find one or more market niches that are safe and profitable. An ideal market niche is big enough to be profitable and has growth potential. Perhaps most important, the niche is of little interest to major competitors. The key idea in niching is specialization. A market nicher can specialize along any of several market, customer, product, or marketing mix lines. 3-72 MKTG 1265 (AMCA)
  73. 73. Risks of Market Nichers Niching carries some major risks. For example, the market niche may dry up, or it might grow to the point that it attracts larger competitors. That is why many companies practice multiple niching. By developing two or more niches, a company increases its chances for survival. 3-73 MKTG 1265 (AMCA)
  74. 74. Blue Ocean Strategy How to create uncontested market space and make the competition irrelevant…… 3-74
  75. 75. © Strategy in Marketing (Pearson Asia 2009) Blue Ocean Strategy Implications Don’t get stuck in markets that are crowded (‘red oceans’) Redefine your market Create new solutions and business models for meeting customer needs See ahead to unmet needs and make the competition irrelevant 3-75 MKTG 1265 (AMCA)
  76. 76. 5-76 MKTG 1265 (AMCA)
  77. 77. © Strategy in Marketing (Pearson Asia 2009) Uses the concept of the “Strategy Canvas” High Attribute Strength The combination of attributes gives an idea of the strategic profile of the firm and its competitors Low #1 #2 #3 #4 #5 #6 #7 #8 #9 #10 Attributes 5-77 MKTG 1265 (AMCA)
  78. 78. © Strategy in Marketing (Pearson Asia 2009) Through competitive intelligence and marketing research you profile the strategy of your main competitor/s Competitor A Attribute Strength Competitor B Competitor C #1 #2 #3 #4 #5 #6 #7 #8 #9 #10 Attributes 5-78 MKTG 1265 (AMCA)
  79. 79. © Strategy in Marketing (Pearson Asia 2009) There is a bunching and a very clear “Red Ocean” Scenario “What should you do now? “What should you do now? Seek opportunities in Seek opportunities in Competitor A market areas not tapped market areas not tapped by the rivals by the rivals Sometimes you need to Attribute Strength Competitor B Sometimes you need to reinvent the product offer reinvent the product offer and service delivery and service delivery system system Competitor C #1 #2 #3 #4 #5 #6 #7 #8 #9 #10 Attributes 5-79 MKTG 1265 (AMCA)
  80. 80. © Strategy in Marketing (Pearson Asia 2009) Blue Ocean Strategy: Create a New Value Curve Competitor A Attribute Strength Competitor B Competitor C #1 #2 #3 #4 #5 #6 #7 #8 #9 #10 Attributes 5-80 MKTG 1265 (AMCA)
  81. 81. The budget airline market Blue Ocean market space for budget airlines 3-81 MKTG 1265 (AMCA)
  82. 82. 3-82
  83. 83. © Strategy in Marketing (Pearson Asia 2009) BO Strategy: Marketing Implications PRODUCT Innovate products and services that redefine the market Create new categories not thought of before Apple i-Pod is a good example Even marketing real estate- DUBAI Palm The World 3-83
  84. 84. © Strategy in Marketing (Pearson Asia 2009) BO Strategy: Marketing Implications PLACE Create a new system for delivering product or services to customers Dell (travel portal) 3-84
  85. 85. Past Year Examination Questions Competitive Marketing Strategy 3-85 MKTG 1265 (AMCA)
  86. 86. Specimen Question # 1 Industry figures suggest that XYZ company is the market leader in its industry. Describe the main objectives or focus of a market leader, leader in terms of their competitive strategy, and the activities they may undertake to achieve those objectives. Please provide specific examples that relate to the industry to illustrate your answer. 3-86 MKTG 1265 (AMCA)
  87. 87. Specimen Question # 2 Describe the quadrants in the Ansoff product/market expansion grid, using examples relevant to company. (Just give one example per quadrant.) What is the main strength and weakness of each of your examples? What is the purpose of this grid? 3-87 MKTG 1265 (AMCA)
  88. 88. Specimen Question # 3 Describe the quadrants in the Ansoff product/market expansion grid, using examples relevant to a given company in order to illustrate your answer. (Just give one example per quadrant.) What is the main strength and weakness of each of your examples? What is the purpose of this grid? 3-88 MKTG 1265 (AMCA)
  89. 89. Specimen Question # 4 A firm's position in the market influences its competitive strategy. Briefly describe the main strategies for each of the market positions. Which position does the “case company” occupy (be sure to identify the market/industry in which they compete) and why do you say that? Note: the “case company” referred to here is dependent on the actual case you are given in the exam 3-89 MKTG 1265 (AMCA)
  90. 90. Specimen Question # 5 Briefly describe Porter’s generic competitive strategies. Which one is most appropriate to a company and why? 3-90 MKTG 1265 (AMCA)
  91. 91. Specimen Question # 6 Describe the quadrants in the Ansoff product/market expansion grid, using examples relevant to the case company to illustrate your answer. (Just give one example per quadrant.) What is the purpose of this grid? Note: the “case company” referred to here is dependent on the actual case you are given in the exam 3-91 MKTG 1265 (AMCA)
  92. 92. Specimen Question # 7 Based on a company’s position in a target company’ market, market describe the four competitive positions a firm might occupy. What position does the “case study company” occupy in the market and what competitive strategies would they be likely to pursue? Note: the “case company” referred to here is dependent on the actual case you are given in the exam 3-92 MKTG 1265 (AMCA)
  93. 93. Specimen Question # 8 Briefly explain to your marketing manager in a brief report on the purpose of the Ansoff Product/Market Expansion Grid. 3-93 MKTG 1265 (AMCA)
  94. 94. Specimen Question # 9 Describe the quadrants in the Ansoff product/market expansion grid, using examples relevant to the (case company). Just give one example per quadrant. What are the main strength and weakness of each of your examples? What is the purpose of this grid? MKTG 1265 (AMCA)