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Dealing
9999Dealing
with Competition
Mr. Ajit Arya
Faculty-Marketing
Department of Business Studies
C. U. Shah College of Engg. & Tech.
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?
Mobile service
providers compete
with each other
through innovative through innovative
marketing ideas
Five Forces Determining Segment Structural Attractiveness
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
Strategic Groups
Analyzing Competitors
CompetitorCompetitor
ObjectivesObjectives
StrategiesStrategies
CompetitorCompetitorActionsActions
Strengths &Strengths &
WeaknessesWeaknesses
ReactionReaction
PatternsPatterns
A Competitor’s Expansion Plans
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.”
Selecting Competitors
• Strong versus Weak
• Close versus Distant (near to your product)
• Good versus Bad
Hypothetical Market Structure
10%
Market
Nichers
20%
Market
Follower
30%
Market
Challenger
40%
Market
Leader
Market Leader
Strategies
Expanding the Total Market
New customersNew customers
More usage
Six Types of Defense Strategies
Optimal Market Share
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
Other Competitive Strategies
Market
Challengers
Market
Nichers
Market
Followers
Market Challenger Strategies
• Define the strategic objective and opponents
• Choose a general attack strategy
• Choose a specific attack strategy• Choose a specific attack strategy
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.
In Sri Lanka, Tapal has challenged
Unilever to emerge as a serious
competitor
Attack Strategies
(4) Bypass attack
(2) Flank attack
AttackerDefender
(3) Encirclement attack
(5) Guerilla attack
(1) Frontal attack
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
Market Follower Strategies
Counterfeiter
ClonerCloner
Imitator
Adapter
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
Balancing Orientations
CompetitionCustomer
+ Fighter orientation
+ Alert
+ Exploit weaknesses
- Reactive
+ ID opportunities
+ Long-run profit
+ Emerging needs & groups
Thank You!!!Thank You!!!