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COMPETITIVE
MARKETING
STRATEGIES
OUTLINE
• Introduction
• Strategies for
• Market Leaders
• Challengers
• Followers, and
• Nichers
INTRODUCTION
STRATEGIES FOR MARKET LEADERS
Market Leader’s objectives:
•Expand the total market by
• Finding new users
• Creating new u...
•For example, Rupa Publishers is a
leading brand in book publishing in
India.
•They have adopted a new promotional
activit...
DEFENSE STRATEGY
• A market leader should generally adopt a defense
strategy
• Six commonly used defense strategies
• Posi...
Position Defense
• Least successful of the defense strategies
• Involves building superior brand power, and making the bra...
Mobile Defense
•By market broadening and
diversification
•For marketing broadening, there is
a need to
•Redefine the busin...
• ITC (Indian Tobacco Company) have diversified their
strategies and come into food products (brand
“Asirbaad”) and FMCG (...
Flanking Defense:
• Tactics of Marketing where a market leader
not only satisfies in Position defense but also
puts up an ...
•In India, Bharti Airtel keeps its call
rates higher than Vodafone, and
expenses those revenue to
promotions to flank othe...
Contraction Defense
•Withdraw from the most vulnerable
segments and redirect resources to
those that are more defendable
•...
Pre-emptive Defense
• A more aggressive maneuver is to attack before enemy
starts its offense. A company can launch a pree...
Counter-Offensive Defense
• Responding to competitors’ head-on attack
by identifying the attacker’s weakness and
then laun...
MARKET CHALLENGER STRATEGIES
The market challengers’ strategic objective is to gain
market share and to become the leader ...
Types of Attack Strategies
• Frontal attack
• Flank attack
• Encirclement attack
• Bypass attack
• Guerrilla attack
FRONTAL ATTACK
• Seldom work unless
• The challenger has clear distinctive advantage(s)
• In a pure frontal attack, the at...
• RCA, Xerox and Univac tried to attack IBM’s
mainframe business but failed due to lack of
competitive advantage.
• The Co...
FLANK ATTACK
• Attack the enemy at its weak points or blind spots i.e.
its flanks
• Ideal for challenger who does not have...
• Mercedes-Benz began a flanking maneuver against
General Motors back in the 1950s, targeting the
prestige market (dominat...
ENCIRCLEMENT ATTACK
• Attack the enemy at many fronts at the same time
• Ideal for challenger having superior resources
• ...
BYPASS ATTACK
• By diversifying into unrelated products or markets
neglected by the leader
• Could overtake the leader by ...
GUERRILLA ATTACK
• By launching small, intermittent hit-and-run attacks to
harass and destabilize the leader
• Usually use...
• airlines use short promotions to attack the national
carriers especially when passenger loads in certain
routes are low
...
MARKET-FOLLOWER STRATEGIES
• Theodore Levitt in his article, “Innovative Imitation”
argued that a product imitation strate...
MARKET-FOLLOWER STRATEGIES
(CONT’D)
• Each follower tries to bring distinctive
advantages to its target market--location,
...
MARKET-NICHER STRATEGIES
• Smaller firms can avoid larger firms by targeting
smaller markets or niches that are of little ...
MARKET-NICHER STRATEGIES
• Nichers must create niches, expand the niches and
protect them
• e.g. Nike constantly created n...
THANK YOU
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Competitive strategy

Competitive Strategy in MARKETING

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Competitive strategy

  1. 1. COMPETITIVE MARKETING STRATEGIES
  2. 2. OUTLINE • Introduction • Strategies for • Market Leaders • Challengers • Followers, and • Nichers
  3. 3. INTRODUCTION
  4. 4. STRATEGIES FOR MARKET LEADERS Market Leader’s objectives: •Expand the total market by • Finding new users • Creating new uses, and • Encouraging more usage •Protect its current market share by • Adopting defense strategies •Increase its market share • Note the relationship between market share and profitability
  5. 5. •For example, Rupa Publishers is a leading brand in book publishing in India. •They have adopted a new promotional activity for their new book for the new customers as well as protecting its market shares of existing customers.
  6. 6. DEFENSE STRATEGY • A market leader should generally adopt a defense strategy • Six commonly used defense strategies • Position Defense • Mobile Defense • Flanking Defense • Contraction Defense • Pre-emptive Defense • Counter-Offensive Defense
  7. 7. Position Defense • Least successful of the defense strategies • Involves building superior brand power, and making the brand almost impregnable. • e.g. Mercedes was using a position defense strategy until Toyota launched a frontal attack with its Lexus. • Google is the market leader in “cloud” technology services. To stay ahead of new competitors, the company actually attacks itself by producing new products that force their old ones into obsolescence.
  8. 8. Mobile Defense •By market broadening and diversification •For marketing broadening, there is a need to •Redefine the business (principle of objective), and •Focus efforts on the competition (the principle of mass)
  9. 9. • ITC (Indian Tobacco Company) have diversified their strategies and come into food products (brand “Asirbaad”) and FMCG (brand “VIVEL” etc) and 5 star Hospitality (brand “SONAR BANGLA”) • Legend Holdings, the top China PC maker Legend has announced a joint venture with AOL to broaden its business to provide Internet services in the mainland
  10. 10. Flanking Defense: • Tactics of Marketing where a market leader not only satisfies in Position defense but also puts up an outpost to defend the weak front or to act as a counter invasion base • Secondary markets (flanks) are the weaker areas and prone to being attacked • Pay attention to the flanks
  11. 11. •In India, Bharti Airtel keeps its call rates higher than Vodafone, and expenses those revenue to promotions to flank others. •Such as the new advertisement by Airtel. They make a psychological effect through those promotions that what they give others don’t.
  12. 12. Contraction Defense •Withdraw from the most vulnerable segments and redirect resources to those that are more defendable •By planned contraction or strategic withdrawal •e.g. India’s TATA Group sold its soaps and detergents business units to Unilever in 1993
  13. 13. Pre-emptive Defense • A more aggressive maneuver is to attack before enemy starts its offense. A company can launch a preemptive defense by several ways. It can wage guerrilla action across the market- hitting one competitor here, another there and keep every one off balance; or it can try to achieve grand market envelopment. • Detect potential attacks and attack the enemies first • Let it be known how it will retaliate • To protect its position in the diet food arena, Thompson Medical, manufacturer of Slim-Fast introduced Ultra Slim Fast that was directed at a wealthier market demographic that surprised competitors, which were selling near cost.
  14. 14. Counter-Offensive Defense • Responding to competitors’ head-on attack by identifying the attacker’s weakness and then launch a counter attack • e.g. Toyota launched the Lexus to respond to Mercedes attack • high-end automaker, Mercedes was attacked by BMW with the introduction of the higher priced BMW Series 5, 7, and 8 models. To counter-attack, Mercedes introduced the Series 190, later known as the C.
  15. 15. MARKET CHALLENGER STRATEGIES The market challengers’ strategic objective is to gain market share and to become the leader eventually How? • By attacking the market leader • By attacking other firms of the same size • By attacking smaller firms
  16. 16. Types of Attack Strategies • Frontal attack • Flank attack • Encirclement attack • Bypass attack • Guerrilla attack
  17. 17. FRONTAL ATTACK • Seldom work unless • The challenger has clear distinctive advantage(s) • In a pure frontal attack, the attacker matches its opponent’s product, advertising, price, and distribution. A modified frontal attack, such as cutting price vis-a-vis convinces the market that it’s product is equal to the leaders product. • e.g. Newly launched BMW series advertisement challenged all other big commercial family vehicles by its speed, trustworthyness and safety.
  18. 18. • RCA, Xerox and Univac tried to attack IBM’s mainframe business but failed due to lack of competitive advantage. • The Cola wars between Pepsi and Coke starting from the early 1900s is an example of frontal attack strategies. • McDonald’s McCafes which are coffee joints are seen as a direct frontal attack on Starbucks.
  19. 19. FLANK ATTACK • Attack the enemy at its weak points or blind spots i.e. its flanks • Ideal for challenger who does not have sufficient resources • An enemy’s weak spots are natural targets. A flank attack can be directed along two strategic dimensions- geographic and segmental. In a geographic attack, challenger target the areas the leader’s product is under performing. Other flanking strategy is to serve uncovered market needs, as Japanese automakers did when they developed more fuel-efficient cars.
  20. 20. • Mercedes-Benz began a flanking maneuver against General Motors back in the 1950s, targeting the prestige market (dominated by the Cadillac brand). They purposely priced their luxury cars much higher than Cadillac as part of their campaign to represent Mercedes as a superior car (“engineered like no other car in the world”). • Still today also, MB uses this strategy.
  21. 21. ENCIRCLEMENT ATTACK • Attack the enemy at many fronts at the same time • Ideal for challenger having superior resources • e.g. Seiko attacked on fashion, features, user preferences and anything that might interest the consumer • In making a stand against rival Microsoft, Sun Microsystems licensed its JAVA software to hundreds pf companies and millions of software developers for all sorts of consumer devices. As consumer electric products began to go digital, Java started appearing in
  22. 22. BYPASS ATTACK • By diversifying into unrelated products or markets neglected by the leader • Could overtake the leader by using new technologies • The most indirect assault strategy is the bypass. It means bypassing enemy and attacking easer markets to broaden one’s resource based. This strategy offers three lines approach: diversifying into unrelated product, diversifying into new geographic markets, leapfrogging into new technologies to supplant existing products. • e.g. Pepsi use a bypass attack strategy against Coke in China by locating its bottling plants in the interior
  23. 23. GUERRILLA ATTACK • By launching small, intermittent hit-and-run attacks to harass and destabilize the leader • Usually use to precede a stronger attack • Guerrilla challenger uses both conventional and unconventional means of attack. These include selective price cuts, intense promotional blitzes, and occasional legal action. Normally Guerrilla warfare is practiced by smaller firm against larger one. • Guerrilla Marketing is about taking the consumer by surprise, make an indelible impression and create copious amounts of social buzz. Guerrilla marketing is said to make a far more valuable impression with consumers in comparison to more traditional forms of advertising and marketing. • This is due to the fact that most guerrilla
  24. 24. • airlines use short promotions to attack the national carriers especially when passenger loads in certain routes are low • KBC 2014 in Sony Entertainment made an emotional attack on the viewers.
  25. 25. MARKET-FOLLOWER STRATEGIES • Theodore Levitt in his article, “Innovative Imitation” argued that a product imitation strategy might be just as profitable as a product innovation strategy e.g. Product innovation--Sony Product-imitation--Panasonic
  26. 26. MARKET-FOLLOWER STRATEGIES (CONT’D) • Each follower tries to bring distinctive advantages to its target market--location, services, financing • Four broad follower strategies: • Counterfeiter (which is illegal) • Cloner e.g. the IBM PC clones • Imitator e.g. car manufacturers imitate the style of one another • Adapter e.g. many Japanese firms are excellent adapters initially before developing into challengers and eventually leaders
  27. 27. MARKET-NICHER STRATEGIES • Smaller firms can avoid larger firms by targeting smaller markets or niches that are of little or no interest to the larger firms e.g. Logitech– keyboard & mouse Microbrewers--special beers
  28. 28. MARKET-NICHER STRATEGIES • Nichers must create niches, expand the niches and protect them • e.g. Nike constantly created new niches--cycling, walking, hiking, cheerleading, etc • What is the major risk faced by nichers? • Market niche may be attacked by larger firms once they notice the niches are successful
  29. 29. THANK YOU

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Competitive Strategy in MARKETING

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