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Dealing 9 9 9 Dealing with Competition Mr. Ajit Arya Faculty-Marketing Department of Business Studies C. U. Shah College of Engg. & Tech.

Dealing With Competition

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Page 1: Dealing With Competition

Dealing

9999Dealing

with Competition

Mr. Ajit Arya

Faculty-Marketing

Department of Business Studies

C. U. Shah College of Engg. & Tech.

Page 2: Dealing With Competition

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?and defend market share?

� How should market challengers attack market

leaders?

� How can market followers or nichers compete

effectively?

Page 3: Dealing With Competition

Mobile service

providers compete

with each other

through innovative through innovative

marketing ideas

Page 4: Dealing With Competition

Five Forces Determining Segment Structural Attractiveness

Page 5: Dealing With Competition

Industry Concept of Competition

• Number of sellers and degree of differentiation

• Entry, mobility, and exit barriers

• Cost structure• Cost structure

• Degree of vertical integration

• Degree of globalization

Page 6: Dealing With Competition

Strategic Groups

Page 7: Dealing With Competition

Analyzing Competitors

CompetitorCompetitor

ObjectivesObjectives

StrategiesStrategies

CompetitorCompetitorActionsActions

Strengths &Strengths &

WeaknessesWeaknesses

ReactionReaction

PatternsPatterns

Page 8: Dealing With Competition

A Competitor’s Expansion Plans

Page 9: Dealing With Competition

Strengths and Weaknesses

• In general, a company should monitor three variable when

analyzing competitors:

– Share of market – The competitor’s share of the target

market.

– Share of mind – The percentage of customer who

named the competitors in responding to the statement, named the competitors in responding to the statement,

“Name the first company that comes to mind in this

industry”

– Share of heart – The percentage of customer who

named the competitor In responding to the statement,

“Name the company from which prefer to buy the

product.”

Page 10: Dealing With Competition

Selecting Competitors

• Strong versus Weak

• Close versus Distant (near to your product)

• Good versus Bad

Page 11: Dealing With Competition

Hypothetical Market Structure

10%

Market

Nichers

20%

Market

Follower

30%

Market

Challenger

40%

Market

Leader

Page 12: Dealing With Competition

Market Leader

Strategies

Page 13: Dealing With Competition

Expanding the Total Market

New customersNew customers

More usage

Page 14: Dealing With Competition

Six Types of Defense Strategies

Page 15: Dealing With Competition

Optimal Market Share

Page 16: Dealing With Competition

Factors Relevant to Pursuing

Increased Market Share

• Possibility of provoking antitrust action

• Economic cost

• Pursuing the wrong marketing-mix • Pursuing the wrong marketing-mix strategy

• The effect of increased market share on actual and perceived quality

Page 17: Dealing With Competition

Other Competitive Strategies

Market

Challengers

Market

Nichers

Market

Followers

Page 18: Dealing With Competition

Market Challenger Strategies

• Define the strategic objective and opponents

• Choose a general attack strategy

• Choose a specific attack strategy• Choose a specific attack strategy

Page 19: Dealing With Competition

Define the strategic objective and

opponents

• It can attack the market leader.

• It can attack firms of it’s own size that are not doing the job and are underfinanced.

• It can attack small local and regional firms.• It can attack small local and regional firms.

Page 20: Dealing With Competition

In Sri Lanka, Tapal has challenged

Unilever to emerge as a serious

competitor

Page 21: Dealing With Competition

Attack Strategies

(4) Bypass attack

(2) Flank attack

AttackerDefender

(3) Encirclement attack

(5) Guerilla attack

(1) Frontal attack

Page 22: Dealing With Competition

Specific Attack Strategies

• Price discounts

• Lower-priced goods

• Value-priced goods

• Prestige goods

• Improved services

• Distribution innovation

• Manufacturing-cost

reduction• Prestige goods

• Product proliferation

• Product innovation

reduction

• Intensive advertising

promotion

Page 23: Dealing With Competition

Market Follower Strategies

Counterfeiter

ClonerCloner

Imitator

Adapter

Page 24: Dealing With Competition

Niche Specialist Roles

• End-User Specialist

• Vertical-Level Specialist

• Customer-Size

Specialist

• Product-Line Specialist

• Job-Shop Specialist

• Quality-Price Specialist

• Service-SpecialistSpecialist

• Specific-Customer

Specialist

• Geographic Specialist

• Service-Specialist

• Channel Specialist

Page 25: Dealing With Competition

Balancing Orientations

CompetitionCustomer

+ Fighter orientation

+ Alert

+ Exploit weaknesses

- Reactive

+ ID opportunities

+ Long-run profit

+ Emerging needs & groups

Page 26: Dealing With Competition

Thank You!!!Thank You!!!