Table 11.1Table 11.1 Customers’ Ratings of Competitors on Key Success Factors

COMPETITOR STRATEGIESCOMPETITOR STRATEGIES

MARKET LEADER

MARKET CHALLENGER

MARKET FOLLOWER

MARKET NICHE

MARKET LEADER STRATEGIES 3.

Firm with the largest market share in a productMarket

Leads the other firms in price changes, new product introductions, distribution coverage and promotional intensity

Examples: Microsoft – various versions Colgate – various flavor TV3 – various programs Duracell Hertz Kodak Boeng

STRATEGY APPROACHES:1. Expanding the total market2. Defending market share

MARKET LEADER STRATEGIES 3.

EXPANDING THE TOTAL MARKET

1. NEW CUSTOMERS

• Attract buyers who are unaware of the product or who are resisting it because of price or lack of certain features:

a. who might use it but do not (market-penetration strategy)

b. who have never used it (new-market segment strategy)

c. those who live elsewhere (geographical-expansion strategy)

MARKET LEADER STRATEGIES 3.

EXPANDING THE TOTAL MARKET

2. MORE USAGE

• By increasing: a. the level or quantity of consumption b. the frequency of consumption

• The amount of consumption can be increased: - through packaging or product design. - by making the product more available.

• The frequency of consumption can be increased by identifying: - additional opportunities to use the brand in the same basic way - completely new and different ways to use the brand

MARKET LEADER STRATEGIES 3.

DEFENDING MARKET SHARE

The leader is like a large elephant being attacked bya swarm of bees.

The best way to defend is by focusing on“continuous innovation”:developing new product and customer services,distribution effectiveness and cost cutting.

MARKET CHALLENGER STRATEGIES

To increase market share, challenger can attack:

i. The market leader - make good sense if the leader is not serving the market well.

ii. Firms of its own size - that are not doing the job and are underfinanced

iii. Small local and regional firms

Specific Attack Strategy:i. Price discountii. Prestige goodsiii. Product proliferationiv. Product innovationv. Distribution innovationvi. Intensive advertising promotion

MARKET FOLLOWER STRATEGIES

Followers can achieve high profits because it did not bear any of the innovation expenses

4 Broad Strategies:i. Counterfeiter - duplicates the leader’s product and package and sell it on the black market or disreputable dealers. Example: pirate CDs, Rolex

ii. Cloner - emulate the leader’s products, name, and packaging with slight variations.

iii. Imitator - copies some things from the leader but maintain differentiation in

terms of packaging, advertising, pricing or location.

iv. Adapter - takes the leader’s products and adapts or improves them - may sell to different markets - adapters may grow into the future challengers.

MARKET NICHER STRATEGIES

Leader in a small market, or niche.

Even large and profitable firms use niching strategies forsome of their business.

Why niching is so profitable?

- Nichers know their target market very well that it meet their needs very much better than other firms

selling to this niche casually.

- As a result, nichers can charge a substantial price over costs. The nichers achieve high margin, whereas the mass marketers achieve high volume.