new mkt strategy for new entries

8/12/2019 New MKT strategy for new entries

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Chapter Eight Marketing Strategies forNew Market Entries

Ask students the following questions:Is the product life cycle concept useful? Why or why not?The product life cycle is concerned with the sales history of a product or product class. The concept holds that a productssales change over time in a predictable way and that products go through a series of five distinct stages: introduction,growth, shakeout, maturity, and decline. Each of these stages provides distinct opportunities and threats, thereby affectingthe firms strategy as well as its marketing programs. espite the fact that many new products do not follow such a

prescribed route because of failure, the concept is valuable in helping management look into the future and better anticipatewhat changes will need to be made in strategic marketing programs.What are the product life-cycle limitations?

The product life!cycle models ma"or weakness lies in its normative approach to prescribing strategies based on assumptionsabout the features or characteristics of each stage. #t fails to take into account that the product life cycle is driven by market

forces e$pressing the evolution of consumer preferences %the market&, technology %the product&, and competition %the supplyside&.

Figure !" #he three le$els of a product

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%iscussion &uestions

" 'ey (uestion) Is it *etter to *e a market pioneer+ or a follower?

What are the ad$antages for pioneers?) *irst choice of market segments and positions) efines the rules of the game) istribution advantages) Economies of scale and e$perience) +igh switching costs for early adopters

) ossibility of positive network effects) ossibility of preempting scarce resources to suppliers

What are the ad$antages for followers?) Ability to take advantage of pioneers positioning mistakes) Ability to take advantage of pioneers product mistakes) Ability to take advantage of pioneers marketing mistakes) Ability to take advantage of pioneers limited resources

,"So+ when+ and for whom+ does it make sense to pursue a pioneer strategy?

Apioneeringfirm stands the best chance for long!term success in market!share leadership and profitability when:

The new product!market is insulated from the entry of competitors, at least for a while, by strong patent

protection, by proprietary technology %such as a unique production process&, by substantial investmentrequirements, or by positive network effects.

The firm has sufficient si-e, resources, and competencies to take full advantage of its pioneering position

and preserve it in the face of later competitive entries.

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" When+ and for whom+ does it make sense to pursue a follower strategy?

Afollowerwill most likely succeed when:) There are few legal, technological, or financial barriers to inhibit entry.) #t has sufficient resources or competencies to overwhelm the pioneers early advantage.

!" If you want to *e a pioneer+ what are your strategic options?.nder what circumstances might each option *e more likely to succeed?

Strategic options for pioneers

/ass!market penetration

0iche penetration

1kimming and early withdrawal

#nstructor: 2uild a discussion around E$hibit 3.4.

/" 0ow a might introductory marketing plans differ under each of these pioneering strategies?

#nstructor: 2uild a discussion around E$hibit 3.55

E1hi*it 2"!3otential 4d$antages of 3ioneer and Follower Strategies

E1hi*it 2"/

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Marketing Strategy Elements 3ursued *y Successful 3ioneers+ Fast Followers+and 5ate Entrants

Marketing 6*7ecti$es+ 3rogram Components+ and Strategies 8ary for %ifferent 3ioneeringStrategies

/ass!market penetration

0iche penetration

1kimming and early withdrawal

Some 4d$ice for Would-9e 3ioneers

*irst mover advantage is trumped by pioneers who are better. Best beats first.6oncentrate on

being best.

2eing a pioneer without the basis forsustainablecompetitive advantage is a trap7

E1hi*it :"!Categories of New 3roducts %efined 4ccording to #heir %egree of Newness to the Company and

Customers in the #arget Market

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new mkt strategy for new entries

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