11 Competitive Dynamics 1

Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 11-2 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?

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

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

Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 11-9 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 General Attack Strategies  Frontal attack  Flank attack  Encirclement attack  Bypass attack  Guerilla warfare

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

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

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