Downloaded 132 times
More Related Content
Similar to Competitive strategies
Competitive strategies
- 1. Marketing Management Seminar Prepared by Group4 “Competitive strategies for Market leader, Challenger & Follower”
- 2. “To be along term Market leader is the goal of any Marketer”
- 3. The competitivestrategies adopted by the company depends largely on its position in the Market. It design its strategies based on its position and objectives. The different position or roles the companies can have are:- Market leader Challenger Follower Nicher
- 4. Market Leader In themajority of industries, there is one firm that is generally recognized to be the leader. It typically has the largest market share and, by virtue of its pricing, advertising intensity, distribution coverage, technological advance and rate of new product introductions, it determines the nature, pace and bases of competition. It is this dominance that typically provides the benchmark for other companies in the industry.
- 5. Market challenger &Follower Firms with a slightly smaller market share can adopt one of two stances. They may choose to adopt an aggressive stance and attack other firms, including the market leader, in an attempt to gain share and perhaps dominance (market challengers), or they may adopt a less aggressive stance in order to maintain the status quo (market followers)
- 6. Market Nichers Virtually everyindustry has a series of small firms that survive, and indeed often prosper, by choosing to specialize in parts of the market that are too limited in size and have potential for growth. By concentrating their efforts in this way, market nichers are able to build up specialist market knowledge and avoid expensive head-on fights with larger companies.
- 7. Competitive Strategies forthe Market leader. To stay number one, the firm must First find ways to expand total market demand Second it must protect its current share through defensive and offensive actions Third it must increase its market share Expand total market demand 1. New customers Every product class has the potential to attract buyers who are unaware of the product or are resisting it because of price or lack of certain features. • Those who might use it but do not(Market penetration strategy) • Those who have never used it(New market segment) • Those who live elsewhere( Geographical expansion)
- 8. 2.New uses As asecond stage the strategist might search for new uses for the product. Perhaps the most successful example of this is Du Pont’s Nylon, which was first used as a synthetic fibre for parachutes and then subsequently for stockings, shirts, tyres, upholstery, carpets and a spectrum of industrial and engineering uses. 3. More usage Marketers can try to increase the amount, level or frequency of consumption. They can sometimes boost the amount through packaging or product design.---Large packages, Make it available more.
- 9. Protecting the Marketshare At the same time as trying to expand the total market, the market leader should not lose sight of the need to defend its market share. It has long been recognized that leaders represent a convenient target since, because of their size, they are often vulnerable to attack The need for this is illustrated by examples from many industries, including photography (Kodak having been attacked in the film market by Fuji and in the camera market by Polaroid, Minolta, Nikon, Canon and Pentax), soft drinks (Pepsi attacking Coca-Cola), car hire (Avis against Hertz), razors (Bic and Wilkinson Sword attacking Gillette) Offensive and defensive strategies(Without
- 10. Defensive Marketing The aimof defensive marketing is to reduce the probability of attack, divert attacks to less threatened areas and lessen their intensity. A dominant firm can use the following 6 defense strategies. Position defense: Means occupying the most desirable market space in consumer’s minds, making the brand almost impregnable----P&G (Tide with cleaning, Pampers with dryness) Flank Deffense: The market leader should erect outposts to protect a weak front or support a possible counterattack. P&G ---Gain and Cheer laundry detergents.
- 11. Counteroffensive Defense Responding tocompetitors’ head-on attack by identifying the attacker’s weakness and then launch a counter attack. Toyota launched Lexus to meet the attack of Mercedes. Mobile Defense: Leader stretches its domain over new territories market broadening and market diversification. Tobacco giant ITC started focusing in FMC products. Contraction Defense: Withdraw from the most vulnerable segments and redirect resources to those that are more defendable Tata group sold its soap and detergents to Unilever in 1993.
- 12. Increasing Market share Thiscan typically be done in a variety of ways, including by means of heavier advertising, improved distribution, price incentives, new products and, as by mergers, takeovers, alliances and distribution deals
- 13. Competitive Strategies forChallengers The market challengers’ strategic objective is to gain market share and to become the leader eventually How? 1. By attacking the market leader 2. By attacking other firms of the same size 3. By attacking smaller firms. The eight most commonly used and successful strategic strands are: 1. Price discounting 2. Product and/or service innovation 3.Distribution innovation 4. Heavy advertising 5. Market development 6. Clearer and
- 14. Flank Attack Attack theenemy at its weak points or blind spots i.e. its flanks Ideal for challenger who does not have sufficient resources 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 using new technologies Pepsi used bypass attack on Coke
- 15. Frontal Attack In apure frontal attack, the attacker matches its opponent’s product, advertising, price and distribution. The side with greater resources will win the market. Guerilla Attack By launching small, intermittent hit-and-run attacks to harass and destabilize the leader Usually use to precede a stronger attack
- 16. Market follower Strategy Asan alternative to challenging for leadership, many companies are con- tent to adopt a far less proactive posture simply by following what others do. There are 3 types of following:- 1. Following closely , with as similar a marketing mix and market segmentation combination as possible 2. Following at a distance , so that, although there are obvious similarities, there are also areas of differentiation between the two 3. Following selectively , both in product and market terms, so that the likelihood of direct competition is minimized
- 17. Types of following:- 1.Counterfeiter: Duplicates the leader product and packages and sells it on the black market or through disreputable sellers. 2. Cloner: Emulates the leader’s products, name, and packaging with slight variations. 3. Imitator: Copies some things from the leader but differentiates on packaging, advertising, pricing or location. The leader doesn’t mind as long as the imitator attack aggressively. 4. Adapter: The adapter takes leader’s product and adapts or improve them. The adapter may choose to sell in different market but often it grows to a future challenge.
- 18. Market- Nicher strategies Smallerfirms can avoid larger firms by targeting smaller markets or niches that are of little or no interest to the larger firms Nichers must create niches, expand the niches and protect them What is the major risk faced by nichers? Market niche may be attacked by larger firms once they notice the niches are successful “Develop multiple niches. By developing strength in more than one niche the company increases its chances for survival”.
- 19.