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Session 17  MG 220 MBA - 14 Oct 10
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Session 17 MG 220 MBA - 14 Oct 10


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Session 17 …

Session 17
MG 220 Marketing Management
MBA 10

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  • 1. MG 220 Marketing Management MBA 10 Fall 2010 Muhammad Talha Salam, Asst. Professor Access it online: Part 4: Building Strong Brands > Competitive Strategies for Market Leaders > Other Competitive Strategies > Balancing Customer & Competitive Orientations > Case Study 1: ABN AMRO (Class Discussion) > Quiz 5: Part 4 (Chap 9 & 10 – 12/ed. OR Chap 10 & 11 – 13/ed.) Class Presentation | Session 17 | 13 Oct 2010
  • 2. Access it online: Competitive Strategies for Market Leaders • Different roles firms can have in a target market: – Leader – Challenger – Follower – Nicher • In most of industry, there is an established market leader. – Mobilink (Celcos), Gillette (Razors), TCS (Courier) etc. • Although they have distinct place but unless they are a legal monopoly, they face tough time always! • Staying a leader requires careful strategic action: – Finding ways to Expand Total Market Size – Must Protect current Market Share – Try to increase Market Share (even if current market size is not increasing) MG 220 Marketing Management 2
  • 3. Access it online: Competitive Strategies for Market Leaders Expanding the Total Market • If overall market size increases, biggest gainer is Market Leader • Different ways of doing it: – New Customers • Market Penetration strategy Users who might use it but don’t • New-Market segment strategy Users who have never used it • Geographical-expansion strategy Users who live elsewhere – More Usage • Increase level/quantity of consumption • Increase frequency of consumption • Identify other uses (food products finding new recipes) • Communicating effectively as to when it should be replaced – Product development can also spur new uses • Consider Maggi MG 220 Marketing Management 3
  • 4. Access it online: Competitive Strategies for Market Leaders Protecting/Defending Current Market Share • Leader is like a large elephant swarmed by bees • While increasing share and market size, it must also continuously defend its current business • Continuous innovation – to keep increasing its competitive strength and value to consumers • In this process of satisfying customer needs, a firm may be engaged in: – Responsive marketing – finding needs and fulfilling them – Anticipative marketing – looking ahead into what needs a customer may have in future – Creative marketing – Discovering & creating solutions not asked for! Sony is a market-driving firm not a market-driven firm. Sony doesn’t serve markets, Sony creates markets MG 220 Marketing Management 4
  • 5. Access it online: Competitive Strategies for Market Leaders Protecting/Defending Current Market Share (…contd.) • Defending is just like military defensive strategy. Any of these six positions can be taken • All of these points have examples in branding strategies by brands. If their strategies are observed carefully, these patterns of defensive strategy can be seen clearly – Position defense – Occupying most desirable position in market & minds of consumers and making it impregnable – Flank defense – Creating outposts to protect weak fronts or even launch counterattacks – Preemptive defense – Attack before enemy does – Counteroffensive defense – Responding to attack by launching own strategy against rival – Mobile defense – Leader can stretch its domain and move into new territories – Contraction defense – Companies at times realize that they cannot defend all of their territory and go for a planned contraction (also known as strategic withdrawal) MG 220 Marketing Management 5
  • 6. Access it online: Competitive Strategies for Market Leaders Increase/Expand Market Share • Gaining one share point can be worth millions in revenue • Leader must always focus on carefully increasing market share • Market share increase may not always imply increased profitability and has its own share of problems • Key considerations – Possibility of provoking anti-trust – Economic cost – Concept of optimal market share. Ahead of this value, profitability may actually decline – Pursuing wrong marketing-mix strategy – Effect of increased market share on actual perception and perceived quality MG 220 Marketing Management 6
  • 7. Access it online: Other Competitive Strategies Market-Challenger Strategies • Market Challengers set high aspirations and leverage their resources at fullest while market leader often runs business as usual • Strategies used by Market-Challenger – Defining the strategic objective & opponent(s) • It can attack the market leader • It can attack firms of its own size • It can attack small local and regional firms – Choosing a general attack strategy • Frontal attack • Flank attack • Encirclement attack • Bypass attack – technological leapfrogging • Guerrilla warfare – Choosing a specific attack strategy • Many options available MG 220 Marketing Management 7 Examples of Specific attack strategy Price discount, Lower priced goods, Value-priced goods & services, Prestige goods, Product proliferation, Product innovation, Improved services, Distribution innovation, Manufacturing-cost reduction, Intensive advertising promotion
  • 8. Access it online: Other Competitive Strategies Market-Follower Strategies • Many firms prefer following market leader rather than challenging • Strategies used by Market-Followers – Counterfeiter – Cloner – Imitator – Adapter MG 220 Marketing Management 8
  • 9. Access it online: Other Competitive Strategies Market-Nicher Strategies • Consider being a leader in a small market • Nichers get to know their customers so well that they also charge premium • Creating/Identifying niches is a continuous process MG 220 Marketing Management 9
  • 10. Access it online: Balancing Customer & Competitive Orientations • Competitive Orientation – Companies always observe & focus on competitors – Fighter’s orientation – Always observing strategies, strengths and weaknesses for competitors • Customer Orientation – Focusing mainly on customers rather than competition – Better placed to identify new opportunities MG 220 Marketing Management 10
  • 11. MG 220 Marketing Management MBA 10 Fall 2010 Muhammad Talha Salam, Asst. Professor Access it online: Part 5: Shaping the Marketing Offerings > LEFTOVER TOPIC FROM CHAP 10: Devising Brand Strategy > Product Characteristics > Product & Brand Relationships > Differentiation > Case Study 2: LEGO Class Presentation | Session 18 | 18 Oct 2010