MARKETING

MANAGEMENT
 OUTLINE
• What is Competitive Strategy?
• PORTER’S Model.
• Types Of Competitors.
• Competitive Advantage.
• Types of Competition
• Competitor strategies for different market player
• How to fight Competitors?
 Competitive Strategy ?
COMPETITIVE STRATEGY consists of moves to

• Attract customers
• Withstand competitive pressures
• Strengthen firm’s market position

OBJECTIVES

• Earn a COMPETITIVE ADVANTAGE

• Cultivate clientele of LOYAL CUSTOMERS
• Knock the socks off rivals, ethically & honourably.

COMPETITIVE STRATEGY, narrower in scope than business strategy,

focuses on management’s plan to compete successfully.
 Creating Competitive Advantage

• Competitive advantages require delivering more

value and satisfaction to target consumers than
competitors do
• Competitive marketing strategies are how companies
analyze their competitors and develop value-based
strategies for profitable customer relationships
Porter’s Model
Competitive Strategies
Competitive Positions
Market
Market leader
challenger
strategies
strategies

Market
Market nicher
follower
strategies
strategies
 Competitive Strategies
Competitive Positions
• Market leader is the firm with the largest market share
and leads the market price changes, product
innovations, distribution coverage, and promotion
spending.
• Market challengers are firms fighting to increase market
share.
• Market followers are firms that want to hold onto their
market share.
• Market nichers are firms that serve small market
segments not being pursued by other firms.
Hypothetical Market Structure

Market Market Market Market

leader challenger follower nicher

40 % 30 % 20 % 10 %
 Market Leaders
• Expand the total market
• Protect its total Market Share
• Increase its Market Share
• Open up a sustainable cost advantage over
rivals using lower cost edge as a basis either to
under price rival and reap market share gain
or earn a higher profit margin selling at going
price.
 Market Leaders
Market Leader’s objectives:
• Expand the total market by
– Finding new users
– Creating new uses, and
– Encouraging more usage

• Protect its current market share by

– Adopting defense strategies

• Increase its market share

– Note the relationship between market share and
profitability
Market Leaders – Defense Strategies

• A market leader should generally adopt a defense

strategy
• Six commonly used defense strategies
1. Position Defense
2. Mobile Defense
3. Flanking Defense
4. Contraction Defense
5. Pre-emptive Defense
6. Counter-Offensive Defense
Market Leaders – Defense Strategies

Position Defense
• Least successful of the defense strategies
• “A company attempting a fortress defense will
find itself retreating from line after line of
fortification into shrinking product markets.”
• e.g. Mercedes was using a position defense
strategy until Toyota launched a frontal attack
with its Lexus.
• Nescafe, BRU.
Market Leaders – Defense Strategies

Mobile Defense
• By market broadening and diversification
• For marketing broadening, there is a need to
– Redefine the business (principle of objective), and
– Focus efforts on the competition (the principle of
mass)
• e.g. ITC faced with a growing concern over the ill
effects of SMOKING and the ban on Cigarettes in
many place so it moved quickly into process food, e-
chopal, Garments etc.
Market Leaders – Defense Strategies

Flanking Defense:
• Secondary markets (flanks) are the weaker areas
and prone to being attacked
• Pay attention to the flanks
• e.g. Smirnoff had 23% of the vodka market share
in USA was attacked by Wolfschmidt, Smirnoff
actually raised its price and put the increased
revenue into Advertising at the same time it
introduced another brand Relska to compete
with Wolfschmidt and Popov to sell for less price.
 Market Leaders
Contraction Defense
• Withdraw from the most vulnerable segments
and redirect resources to those that are more
defendable
• By planned contraction or strategic withdrawal
• e.g. India’s TATA Group sold its soaps and
detergents business units to Unilever in 1993
• P&G India withdrew its brand super soaker from
the detergent market to improve its focus and
profitability.
 Market Leaders
Pre-emptive Defense
• Detect potential attacks and attack the
enemies first
• Let it be known how it will retaliate
• Product or brand proliferation is a form of pre-
emptive defense e.g. SBI have 13500 Bank
Branches and 7700 ATMS to compete against
it enemies.
 Market Leaders
Counter Offensive
• The leader meets the attacker frontally or hit
its Flank.
• Attack the attackers territory so that it deploys
its resources to defend it.
• Eg. Hero Honda launched its 100cc Pleasure
scooters and Women exclusive scooter
showrooms called “JUST FOR HER” against
BAJAJ and TVS.
Market Leaders
Market Challenger Strategies
The market challengers’ strategic objective is
to gain market share and to become the
leader eventually
How?
• By attacking the market leader
• By attacking other firms of the same size
• By attacking smaller firms
Market Challenger Strategies
Types of Attack Strategies
• Frontal attack
• Flank attack
• Encirclement attack
• Bypass attack
• Guerrilla attack
Market Challenger Strategies
Frontal Attacks
• Seldom work unless
– The challenger has sufficient fire-power (a 3:1
advantage) and staying power, and
– The challenger has clear distinctive advantage(s)
• e.g. Japanese and Korean firms launched
frontal attacks in various ASPAC countries
through quality, price and low cost
Market Challenger Strategies
Flank Attack
• Attack the enemy at its weak points or blind
spots i.e. its flanks
• Ideal for challenger who does not have
sufficient resources
• e.g. In the 1990s, Yaohan attacked Mitsukoshi
and Seibu’s flanks by opening numerous
stores in overseas markets
Market Challenger Strategies
Encirclement attack
• Attack the enemy at many fronts at the same
time
• Ideal for challenger having superior resources
• e.g. Seiko attacked on fashion, features, user
preferences and anything that might interest
the consumer
Market Challenger Strategies
Bypass attack
• By diversifying into unrelated products or
markets neglected by the leader
• Could overtake the leader by using new
technologies
• e.g. Pepsi use a bypass attack strategy against
Coke in China by locating its bottling plants in
the interior provinces
Market Challenger Strategies
Guerrilla attack
• By launching small, intermittent hit-and-run
attacks to harass and destabilize the leader
• Usually use to precede a stronger attack
• e.g. airlines use short promotions to attack
the national carriers especially when
passenger loads in certain routes are low
Market Challenger Strategies
• Which Attack Strategy should a Challenger
Choose?
Use a combination of several strategies to
improve market share over time
Market Challenger
 Market Follower
• Theodore Levitt in his article, “Innovative
Imitation” argued that a product imitation
strategy might be just as profitable as a
product innovation strategy
e.g. Product innovation--Sony
Product-imitation--Panasonic
 Market-Follower Strategies (cont’d)
• Each follower tries to bring distinctive advantages to
its target market--location, services, financing

• Four broad follower strategies:

– Counterfeiter
– Cloner
– Imitator
– Adapter
Counterfeiter
 Examples of Counterfeiter
• Duplicate copies of electronic products like
Music devices, Mobiles phones etc are
‘Illegally’ sold in ‘Gaffar Market’ in Delhi
• Illegal copies of watches like Rolex are easily
available at ‘Bhagirath palace market’
• Pirated CDs and DVDs are illegally available at
‘Palika bazar market’
Cloner
 Example of Cloner
• Bajaj Pulsar was ‘cloned’ and was sold in
African market by a Chinese manufacturer.
• Successful models of Nokia are exactly copied
by Chinese mobile phones manufacturer.
• Cloning of ‘Rolls Royce’ by Chinese
manufacturer.
Imitator
 Examples of Imitator
• Fbfkids.com is a copy of Facebook but is
specifically targeted towards the kids of age
group 12-16 years.
• Roma Switches are copy of Anchor but has a
lower pricing range.
• Birla soft is an imitator to market leader like
TCS, Infosys etc.
Adaptor
 Examples of Adaptor
• Mint newspaper has adapted the concept of
‘The Economic times’ and has improved it.
• Spice jet adapted the model of ‘Air Deccan’
and improved the quality of service provided.
 Market-Nicher Strategies
• Group of customer with distinct set of needs.
• Customer willing to pay premium.
• Small but has size, profit, growth potential.
• Nichers must create niches, expand the niches
and protect them.
 Rules for Niche Marketing

• 1. Meet their unique needs.

• 2. Say the right thing
• 3. Always test-market
 Risk faced by nichers
• Market niche may be attacked by larger firms
once they notice the niches are successful

• Do not turn into mass markets is that they

soon reach their limit
 Examples

 Brioni – Hand made Suits

 Louis Vuitton – Bags

•Rolls royce

•Emporio armani
Thank You