1 11 Competitive Dynamics

Chapter Questions 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? What marketing strategies are appropriate at each stage of the product life cycle? How should marketers adjust their strategies and tactics for an economic downturn or recession? Copyright © 2011 Pearson Education, Inc.  Publishing as Prentice Hall 11-2

Figure 11.1 Hypothetical Market Structure Copyright © 2011 Pearson Education, Inc.  Publishing as Prentice Hall 11-3

Expanding the Total Market Copyright © 2011 Pearson Education, Inc.  Publishing as Prentice Hall 11-4

New Ways to Use a Brand Copyright © 2011 Pearson Education, Inc.  Publishing as Prentice Hall 11-5

Protecting Market Share Responsive anticipation Creative anticipation Copyright © 2011 Pearson Education, Inc.  Publishing as Prentice Hall 11-6

Figure 11.2 Types of Defense Strategies Copyright © 2011 Pearson Education, Inc.  Publishing as Prentice Hall 11-7

Figure 11.3 The Concept of Optimal Market Share Copyright © 2011 Pearson Education, Inc.  Publishing as Prentice Hall 11-8

Market Challenger Strategies Define the strategic objective and opponents Choose a general attack strategy Choose a specific attack strategy Copyright © 2011 Pearson Education, Inc.  Publishing as Prentice Hall 11-9

General Attack Strategies Frontal attack Flank attack Encirclement attack Bypass attack Guerilla warfare Copyright © 2011 Pearson Education, Inc.  Publishing as Prentice Hall 11-10

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 Copyright © 2011 Pearson Education, Inc.  Publishing as Prentice Hall 11-11

Market Follower Strategies Copyright © 2011 Pearson Education, Inc.  Publishing as Prentice Hall 11-12

Market Nicher Strategies Copyright © 2011 Pearson Education, Inc.  Publishing as Prentice Hall 11-13

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 Copyright © 2011 Pearson Education, Inc.  Publishing as Prentice Hall 11-14

Product Life Cycles Copyright © 2011 Pearson Education, Inc.  Publishing as Prentice Hall 11-15

Figure 11.4 Sales and Profit Life Cycles Copyright © 2011 Pearson Education, Inc.  Publishing as Prentice Hall 11-16

Figure 11.5a Common PLC Patterns: Growth-Slump-Maturity Copyright © 2011 Pearson Education, Inc.  Publishing as Prentice Hall 11-17

Figure 11.5b Common PLC Patterns: Cycle-Recycle Copyright © 2011 Pearson Education, Inc.  Publishing as Prentice Hall 11-18

Figure 11.5c Common PLC Patterns: Scalloped Copyright © 2011 Pearson Education, Inc.  Publishing as Prentice Hall 11-19

Figure 11.6 Style, Fashion, and Fad Life Cycles Copyright © 2011 Pearson Education, Inc.  Publishing as Prentice Hall 11-20

Maintaining a Market Advantage: Trivial Pursuit Copyright © 2011 Pearson Education, Inc.  Publishing as Prentice Hall 11-21

Strategies for Developing a Pioneer Advantage Copyright © 2011 Pearson Education, Inc.  Publishing as Prentice Hall 11-22

Growth Stage Strategies Copyright © 2011 Pearson Education, Inc.  Publishing as Prentice Hall 11-23

Electrolux Copyright © 2011 Pearson Education, Inc.  Publishing as Prentice Hall 11-24

Marketing Program Modification Changing Brand Course Market Modification Product Modification Marketing Program Modification Copyright © 2011 Pearson Education, Inc.  Publishing as Prentice Hall 11-25

Decline Declining sales Low cost per customer Declining profits Laggards Copyright © 2011 Pearson Education, Inc.  Publishing as Prentice Hall 11-26

Marketing in an Economic Downturn Invest Get close to customers Review budgets Use a compelling value proposition Fine-tune offerings Copyright © 2011 Pearson Education, Inc.  Publishing as Prentice Hall 11-27

A Compelling Value Proposition Copyright © 2011 Pearson Education, Inc.  Publishing as Prentice Hall 11-28

For Review 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? What marketing strategies are appropriate at each stage of the product life cycle? How should marketers adjust their strategies and tactics for an economic downturn or recession? Copyright © 2011 Pearson Education, Inc.  Publishing as Prentice Hall 11-29