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 Figure 1.1 Five Forces Determining Segment Structural Attractiveness (Michael Porter’s) Potential Entrants (Threat of MobilitySuppliers (Supplier power)Industry Competitors (Segment rivalry)Buyers (Buyer power)Substitutes (Threat of substitutes)
4 Industry Concept of Competition Number of sellers and degree of differentiationEntry, mobility, and exit barriersCost structureDegree of vertical integrationDegree of globalization
5 Industry Concept of Competition Pure monopolyOligopolyMonopolistic competitionPure competition
6 Market Concept of Competition SubstitutesSecondary CompetitorsPrimary CompetitorsThe product (and its value proposition)
7 Analyzing Competitors Share of marketShare of mindShare of heart
8 Selecting Competitors Strong versus WeakClose versus Distant“Good” versus “Bad”
9 Competitive Strategies for Market Leaders: Expanding the Total Market New customersMore usage
10 Figure 11.6 Six Types of Defense Strategies DefenderFlankPreemptiveCounteroffensiveMobileContraction
11 Factors Relevant to Pursuing Increased Market Share Possibility of provoking antitrust actionEconomic costPursuing the wrong marketing-mix strategyThe effect of increased market share on actual and perceived quality
12 Other Competitive Strategies Market challengersMarket followersMarket nichers
13 Market Challenger Strategies Define the strategic objective and opponentsChoose a general attack strategyChoose a specific attack strategy
15 General Attack Strategies (2) Flank attack: an enemy’s weak spots are natural targets.
16 General Attack Strategies (3) Encirclement attack: a grand offensive attack on several fronts.
17 General Attack Strategies (4) 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)
18 General Attack Strategies (5) 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.
21 Market Nicher Strategies A leader in small marketEnd-user specialistVertical-level specialistCustomer-size specialistSpecific-customer specialistGeographic specialistProduct or product-line specialistProduct-feature specialistJob-shop specialistQuality-price specialistService specialistChannel specialist
22 Marketing in an Economic Downturn InvestGet close to customersReview budgetsUse a compelling value propositionFine-tune offeringsDespite reduced funding for marketing programs and intense pressure to justify them as cost effective, some marketers survived—or even thrived—in the recession. This slide lists five guidelines to improve the odds for success during an economic downturn.
23 Balancing Orientations Competitor-centeredCustomer-centeredWe 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.