dealing with competition marketing management, 13 th ed 11
TRANSCRIPT
Dealing with Competition
Marketing Management, 13th ed
11
Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 11-2
Chapter Questions
• How do marketers identify primary competitors?
• How should we analyze competitors’ strategies, objectives, strengths, and weaknesses?
• How can market leaders expand the total market and defend market share?
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Chapter Questions (cont.)
• How should market challengers attack market leaders?
• How can market followers or nichers compete effectively?
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Progressive Competes on Marketing Programs
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Figure 1.1 Five Forces Determining Segment Structural Attractiveness
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Identifying Competitors
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Industry Concept of Competition
• Number of sellers and degree of differentiation
• Entry, mobility, and exit barriers
• Cost structure
• Degree of vertical integration
• Degree of globalization
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Figure 11.2 Strategic Groups
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Figure 11.4 A Competitor’s Expansion Plans
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Table 11.1 Customer Ratings of Competitors on Key Success Factors
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Strengths and Weaknesses
Share of marketShare of market
Share of mindShare of mind
Share of heartShare of heart
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Steps in Benchmarking
• Determine which functions or processes to benchmark
• Identify the key performance variables to measure
• Identify the best-in-class companies
• Measure the performance of best-in-class companies
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Steps in Benchmarking (cont.)
• Measure the company’s performance
• Specify programs and actions to close the gap
• Implement and monitor results
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Table 11.2 Market Share, Mind Share, and Heart Share
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Figure 11.5 Hypothetical Market Structure
10%
Market
Nichers
20%
Market
Follower
30%
Market
Challenger
40%
Market
Leader
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Gap Tried to Appeal to Too Broad a Market
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Expanding the Total Market
New customersNew customers
More usageMore usage
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Figure 11.6 Six Types of Defense Strategies
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Figure 11.7 Optimal Market Share
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Factors Relevant to Pursuing Increased Market Share
• Possibility of provoking antitrust action
• Economic cost
• Pursuing the wrong marketing-mix strategy
• The effect of increased market share on actual and perceived quality
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Other Competitive Strategies
Market
Challengers
Market
NichersMarket
Followers
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Market Challenger Strategies
• Define the strategic objective and opponents
• Choose a general attack strategy
• Choose a specific attack strategy
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General Attack Strategies
Frontal Attack
Encirclement
AttackBypass Attack
Flank Attack
Guerrilla Warfare
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Pepsi buys Gatorade in a Bypass Strategy
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Specific Attack Strategies
• Price discounts• Lower-priced goods• Value-priced goods• Prestige goods• Product proliferation• Product innovation
• Improved services• Distribution
innovation• Manufacturing-cost
reduction• Intensive advertising
promotion
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Market Follower Strategies
Counterfeiter
Cloner
Imitator
Adapter
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Market Nicher Strategies
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Niche Specialist Roles
• End-User Specialist• Vertical-Level
Specialist• Customer-Size
Specialist• Specific-Customer
Specialist• Geographic
Specialist
• Product-Line Specialist
• Job-Shop Specialist• Quality-Price
Specialist• Service-Specialist• Channel Specialist
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Balancing Orientations
Competitor-
Centered
Customer-
Centered
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Marketing Debate
How do you attack a category leader?
Take a position:1. The best way to challenge a leader is toattack its strengths.
or
2. The best way to attack a leader isto avoid a head-on assault and to adopta flanking strategy.
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Marketing Discussion
Pick an industry. Classify firms according to the
four different roles they might play. How would you characterize the
nature of competition? Do the firms follow the principles
described in this chapter?