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Chapter 12_Addressing Competition and Driving Growth_15 Nov 2022.pptx
- 1. Chapter 12 Addressing Competition and Driving Growth
- 2. Competitive Strategies for Market Leader • Market leader has the largest market share and usually leads in price changes, new-product introductions, distribution coverage, and promotional intensity. Market Leader 40% Expand Market Defend Market Share Expand Market Share Market Challenger 30% Attack Leader Status Quo Market Follower 20% Imitate Market Nichers 10% Specialize Hypothetical Market Structure
- 3. Competitive Strategies for Market Leader • Firms with the largest market share leads the market price changes, innovations, distributions coverage and promotions spending. Market Leader • Firms fighting to increase market share. • Attacks the leader and other competitors in an aggressive bid for future market share. Market Challenger • Firms trying to hold onto their market share. • Maintain its market share and not rock the boat. Market Follower • Firms that serve small market segments not being pursued by other firms. • Profitable by smart niching. Market Nichers
- 5. 1. Why is it important for companies to grow the core of their business? • An important function of marketing is to drive growth in sales and revenue for a company • Although many different growth strategies are available to firms, some of the best opportunities come from growing the core focusing on their most successful existing products and markets • Growing the core can be a less risky alternative than expansion into new product categories. It strengthens a brand’s credentials as a source of authority and credibility and can yield economies of scale.
- 6. 2. How can market leaders expand the total market and defend market share? 1 Expanding Total Market Demand 1) Attract New Customers • Market penetration strategy • New market segment strategy • Geographical expansion strategy 2) More Usage • Additional opportunities to use the brand • New way to use the brand 2 1) Proactive Marketing Proactive skills • Responsive Anticipation • Anticipative Marketing • Creative Anticipation Proactive Firms • Ready to take risks and make mistakes • Have a vision of the future and of investing in it • Have the capabilities to innovate • Flexible and non – bureaucratic • Have many managers who think proactively 3 Increasing Market Share • The possibility of attracting legal action for violating the competition Act or Antitrust law • Economic cost • The danger of pursuing the wrong marketing activities • The effect of increased market share on actual and perceived quality 2) Defensive Marketing – 6 Defensive Marketing Strategies Protecting Market Share
- 7. 2. How can market leaders expand the total market and defend market share? • Defining the Strategic Objective and Opponents • Choosing a General Attack Strategy • Choosing a Specific Attack Strategy Market Challengers Strategies 2 3 1 Market Followers Strategies • Cloner – Emulates the leader’s products name and packaging with slight variations. • Imitator – Copies something from the leader but differentiates on packaging, advertising, pricing or location • Adapter – Take the leader’s product and adapts or improves them. Market Niche Strategies • Leader in a small market • Large profitable firms also use niching strategies • ROI in smaller market larger market • Nicher achieves high margin, mass marketer achieves high volume
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