PPT 9.pptPPT 9.TNG COMPETITION PRICING STRATEGY PORTERS MODEL BCGG MATRIX AND GROWTH

PPT 9.ppt MARKEITNG COMPETITION PRICING STRATEGY

1. Dealing
with Competition
9
Marketing Management
A South Asian Perspective, 13
th
ed

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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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Mobile service
providers
compete with
each other
through
innovative
marketing ideas

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Figure 9.1 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 9.2 Strategic Groups

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Figure 9.4 A Competitor’s
Expansion Plans

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Table 9.1 Customer Ratings of
Competitors on Key Success Factors

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Strengths and Weaknesses
Share of market
Share of mind
Share 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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Fake brands in Rural Markets
•Look-alike
•Spell-alike
•Duplicates

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Figure 9.5
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 customers
More usage

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Figure 9.6 Six Types of
Defense Strategies

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Figure 9.7
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
Nichers
Market
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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In Sri Lanka, Tapal has challenged
Unilever to emerge as a serious
competitor

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General Attack Strategies
Frontal Attack
Encirclement
Attack
Bypass 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 to
attack its strengths.
or
2. The best way to attack a leader is
to avoid a head-on assault and to adopt
a 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?