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Market follower strategy ppt

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Market follower strategy ppt

  1. 1. Presented by: Sreelakshmi Nair Anjali Shipra 1
  2. 2. The Concept  Theodore Levitt argues that a strategy of a product imitation might be as profitable as a strategy of product innovation.  “Innovative Imitation”-the innovator bears the expense of the product.  Achieve high profits.  Creates a image of the product. 2
  3. 3.  “Conscious parallelism” are common in capital intensive and homogeneous product industry.  Product differentiation is low  Price sensitivity runs high  Offers similar to buyers by copying from leaders  Must know how to retain old customers acquire new ones 3
  4. 4. Classification COUNTERFEITER CLONER IMITATOR ADAPTER 4
  5. 5. COUNTERFEITER  The best example of counterfeiting is selling the originals via piracy.  Also known as Black market follower strategy.  Music firms, Apple and Rolex watches have been plagued by counterfeiter problem. 5
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  7. 7. Cloner:  Emulates the leader’s products, name and packaging with slight variation.  Example: if you get watches from RADO as RADA and bags from GUCCI as GUCCA then that is cloning. 7
  8. 8. Imitator:  Imitation is the best form of flattery which can cause the Leader a huge dent in the profit margins.  They make use of the hard earned brand equity and give a product with same characteristics at low price.  They offer a product with compromised quality.  Imitation jewellery is the best and largest example of imitation. 8
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  10. 10. Adapter:  It is often termed as white collared market strategy.  They have similar products but try to adapt from closest competition.  They can soon become Market Leaders as they can adapt, learn and improve.  Cars like Alto, Zen are adapters and adapt the best qualities from each other by changing the style of the automobiles. 10
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  13. 13. Advantages  Can achieve higher profits since it did not bear the innovation expense  Can sell the product in cheaper price and attract more customers.  Since customers are already aware of the product the cost of educating the market is not required  Knowledge about the segment of the customers who use the product are available. 13
  14. 14. Disadvantages  Reward of all the work given to the market leader  It takes time to overtake the leader  The follower is often a major target of attack by challengers, it must keep its manufacturing costs low and its product quality and services high.  Little innovation is needed to improve the product which can lead to increase in manufacturing cost. 14
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