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11 Competitive Dynamics 1. 11-2 Chapter Questions How do marketers identify primary competitors? How should we analyze competitors’ strategies, objectives,

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Presentation on theme: "11 Competitive Dynamics 1. 11-2 Chapter Questions How do marketers identify primary competitors? How should we analyze competitors’ strategies, objectives,"— Presentation transcript:

1 11 Competitive Dynamics 1

2 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? How should market challengers attack market leaders? How can market followers or nichers compete effectively?

3 11-3 Figure 1.1 Five Forces Determining Segment Structural Attractiveness (Michael Porter’s) Industry Competitors (Segment rivalry) Potential Entrants (Threat of Mobility Buyers (Buyer power) Substitutes (Threat of substitutes) Suppliers (Supplier power)

4 11-4 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

5 11-5 Industry Concept of Competition Pure monopoly Oligopoly Monopolistic competition Pure competition

6 11-6 Market Concept of Competition The product (and its value proposition)

7 11-7 Analyzing Competitors Share of market Share of mind Share of heart

8 11-8 Selecting Competitors Strong versus Weak Close versus Distant “Good” versus “Bad”

9 11-9 Competitive Strategies for Market Leaders: Expanding the Total Market New customers More usage

10 11-10 Figure 11.6 Six Types of Defense Strategies Defender Flank Preemptive Counteroffensive Mobile Contraction

11 11-11 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

12 11-12 Other Competitive Strategies Market challengers Market followers Market nichers

13 11-13 Market Challenger Strategies Define the strategic objective and opponents Choose a general attack strategy Choose a specific attack strategy

14 11-14 General Attack Strategies (1) Frontal attack

15 11-15 Flank attack: an enemy’s weak spots are natural targets. General Attack Strategies (2)

16 11-16 Encirclement attack: a grand offensive attack on several fronts. General Attack Strategies (3)

17 11-17 Bypass attack: bypassing the enemy and attacking easier markets to broaden one’s resource base (by diversifying into unrelated products/ geographical markets, and leapfrogging into new technologies) General Attack Strategies (4)

18 11-18 Guerrilla warfare: consists of small, intermittent attacks to harass and demoralize the opponent and eventually secure permanent footholds. Suitable for smaller firms against a larger one. General Attack Strategies (5)

19 11-19 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

20 11-20 Market Follower Strategies Counterfeiter Cloner Imitator Adaptor

21 11-21 Market Nicher Strategies A leader in small market - End-user specialist - Vertical-level specialist - Customer-size specialist - Specific-customer specialist - Geographic specialist - Product or product-line specialist - Product-feature specialist - Job-shop specialist - Quality-price specialist - Service specialist - Channel specialist

22 Marketing in an Economic Downturn Invest Get close to customers Review budgets Use a compelling value proposition Fine-tune offerings

23 11-23 Balancing Orientations Competitor-centered Customer-centered We were going to obsess over our customers and not our competitors. We watch our competitors, learn from them, see the things that they were doing for customers and copy those things as much as we can. But we were never going to obsess over them.


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