Market Strategies

Market-Scope Strategy Single-Market Strategy –Definition: concentration of efforts in a single segment. –Objective: To find a segment currently being ignored or served inadequately and meet its needs. –Requirements: a) Serve the market wholeheartedly despite initial difficulties. b) Avoid competition with established firms. –Expected results: low costs; higher profits Multimarket Strategy –Definition: Serving several distinct markets. –Objective: To diversify the risk of serving only one market. –Requirements: a) Careful selection of segments to serve. b) Avoid confrontation with companies serving the entire market. –Expected results: higher sales; higher market share

Market-Scope Strategy - Continued Total-Market Strategy –Definition: Serving the entire spectrum of the market by selling differentiated products to different segments in the market. –Objective: To compete across the board in the entire market. –Requirements: a) Employ different combinations of price, product, promotion and distribution strategies in different segments. b) Top management commitment. c) Strong financial position. –Expected results: increased growth; higher market share

Market-Geography Strategy Local-Market Strategy –Definition: Concentrate efforts in immediate vicinity. –Objective: To maintain control of the business. –Requirements: a) Good reputation in the geographic area. b) Good hold on requirements of the market. –Expected results: short term success--need to expand Regional-Market Strategy –Definition: Operate in a region. –Objective: To diversify risk of dependence on one part of a region and to keep control centralized. –Requirements: a) Management commitment to expansion. b) Adequate resources. c) Logistical ability to serve a regional area. –Expected results: increased growth; increased market share; keep up with competitors.

Market-Geography Strategy - Continued National-Market Strategy –Definition: Operate nationally. –Objective: To seek growth. –Requirements: a) Management commitment. b) Capital resources. c) Willingness to take risks. –Expected results: increased growth, market share and profitability International-Market Strategy –Definition: Operate outside national boundaries. –Objective: To seek opportunities beyond domestic business. –Requirements: a) Management commitment. b) Capital resources. c) Understanding of international markets. –Expected results: increased growth, market share and profitability

Market-Entry Strategy First-In Strategy –Definition: First to enter the market. –Objective: To create an insurmountable lead. –Requirements: a) Willingness & ability to take risks. b) Technological competence. c) Strive to stay ahead. d) Heavy promotion. e) Create primary demand. f) Carefully evaluate strengths. –Expected results: reduced costs via experience; increased growth, market share and profits Early-Entry Strategy –Definition: Enter shortly after the leader. –Objective: Stop the first entrant from creating a stronghold in the market. –Requirements: a) Superior marketing strategy. b) Ample resources. c) Strong commitment to challenge the market leader. –Expected results: increased growth, market share and profits

Market-Entry Strategy - Continued Laggard-Entry Strategy –Definition: Enter during tail end of growth stage or during maturity stage as an imitator or initiator –Objective: Imitator - capture that part of the market that is not brand loyal. Initiator - serve the needs of the market better than present firms. –Requirements: Imitator: a) Market research ability. b) Production capability. Initiator: a) Market research ability. b) Ability to generate creative marketing strategies. –Expected results: Imitator - increased short term profits; Initiator - put market on a new growth path; increased profits; some growth opportunities.

Market-Commitment Strategy Deals with level of financial and or management resources a firm is willing to commit to a market. May be strong average or light Intentional, or a matter of circumstances and competitive forces?

Market-Dilution Strategy Demarketing Strategy –Definition: Discouraging customers from seeking the product. –Objective: To maintain customer goodwill during periods of shortages. Requirements: a) Monitor customer time requirements. b) Ration product supplies. c) Divert customers with an immediate need to customers who have a supply but no immediate need. e) Find out and suggest alternative products for meeting customer needs. –Expected results: increased long term profits; strong customer goodwill and loyalty Pruning-of-Marginal-Markets Strategy –Definition: Weeding out markets with unacceptable rates of return. –Objective: To divert investments in growth markets. –Requirements: a) Gain good knowledge of the chosen markets. b) Concentrate all energies on these markets. c) Develop unique strategies to severe the chosen markets. –Expected results: long-term growth; improved ROI; decrease in market share.

Market-Dilution Strategy - Continued Key-Markets Strategy –Definition: Focus on selected markets. –Objective: To serve the selected markets extremely well. –Requirements: a) Gain good knowledge of the chosen markets. b) Concentrate all energies on these markets. c) Develop unique strategies to severe the chosen markets. –Expected results: increased profits; increased market share in the selected markets Harvesting Strategy –Definition: Deliberate effort to let market share slide. –Objective: To generate additional cash flow, increase short-term earnings or avoid antitrust action. –Requirements: High market share. –Expected results: sales decline but useful revenues still occur.