Definition: A runner-up firm in an industry that is fighting hard to increase market share

Competitive position: Market challenger: 30%

Mind should be different from

leader.

Speed.

Cut the flab.

Be different, stand for

SOMETHING.

Innovative power.

“The enemy advances, we retreat.

When they camp, we harass.

When they are tired, we attack,

When they retreat, we pursue”.

Cannot win just by imitating the

leader.

Attack the market leader

strengths rather than it’s

weaknesses.

Indirectly attacking weaknesses

or gaps in the market coverage.

24*7

Restless

No room for complacency

Life ???

It can attack the market leader

It can attack firms of its own sizes

It can attack small local & regional firms

Types of Attack Strategies:Frontal attackFlank attackEncirclement attackBypass attackGuerrilla attack

The challenger has sufficient fire-power and staying power, and

The challenger has clear distinctive advantage(s)

e.g. Japanese and Korean firms like LG and Samsung launched frontal attacks in various ASPAC countries through quality, price and low cost

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. Honeywell set up its strong sales branches in medium and small size cities which IBM had rejected.

Attack the enemy at many fronts at the same time

Ideal for challenger having superior resources

e.g. Sun Microsystems as a rival of Microsoft licensed its java software to many company and software developer.

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 by purchasing orange juice troponica in 1998 which had almost twice the market share of coca-cola’s minute maid.

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.

1-14

Intensive Advertising Promotion

Productproliferation

Prestige goods Price-discount

Product Innovation

Distributioninnovation

Improvedservices

Manufacturing cost reduction

Specific Specific Attack Attack

StrategiesStrategies

Lower-pricegoods

EXAMPLES

EXAMPLES

EXAMPLES

EXAMPLES

EXAMPLES

EXAMPLES

EXAMPLES

EXAMPLES

EXAMPLES

A Small market consisting of a individual or small group of customers with similar characteristics or needs.

It is a process of carving out a small part of the market whose needs are not fulfilled.

An ability to segment the market creatively, focusing activities only on areas where a company has particular strength that are especially valued.

Efficient use of R & D resources, using them where they can be most effective.

Thinking small: adopting “small is beautiful approach”. Eg: SONY

Know your self Know your customer Know your competitors Develop a continuous information system Apply differentiation Do not compete in the same market

segment with yourself

contd…

Create your safe heaven. Do not spread too thin. Develop a corporate marketing

strategy. Be alert be in control. Do not be static, look for new pastures

continuously.

MARKET-NICHER SPECIALTIES:

MARKET-NICHER SPECIALTIES:

End-user Vertical-level Customer-size Specific customer Product/product

line

Geographic Product feature Job-shop Quality-price Service Channel

A Nicher should identify how a company can balance a customer vs. competitor orientation.

Competitor-centered companies evaluate what competitors are doing, then formulate competitive reactions

Customer-centered companies focus on customer developments when formulating strategy

A mass-marketing company can be characterized as being centrally led and bureaucratic.

Niche marketing organizations are decentralized, with several strategic business units which anticipate decision making constituting responsiveness and flexibility.

contd…

Niche marketing, in contrast to mass marketing, yields “greater profits”. As a result, the nicher can charge a substantial markup over costs because of the added value (Coca-Cola, IBM).

Most companies start out as niche marketers and evolve into mass marketers as their product life cycles tend to develop into maturity.

THANK YOU!