11 Competitive Dynamics 1. 11-2 Chapter Questions How do marketers identify primary competitors? How...
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Transcript of 11 Competitive Dynamics 1. 11-2 Chapter Questions How do marketers identify primary competitors? How...
11Competitive Dynamics
1
11-2
Chapter Questions How do marketers identify primary competitors? How should we analyze competitors’ strategies,
objectives, strengths, and weaknesses? 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?
11-3
Figure 1.1 Five Forces Determining Segment Structural Attractiveness (Michael Porter’s)
Industry Competitors
(Segment rivalry)
Potential Entrants (Threat
of Mobility
Buyers (Buyer
power)
Substitutes (Threat of
substitutes)
Suppliers (Supplier power)
11-4
Industry Concept of Competition
Number of sellers and degree of differentiation
Entry, mobility, and exit barriers
Cost structure Degree of vertical
integration Degree of globalization
11-5
Industry Concept of Competition
Pure monopoly Oligopoly Monopolistic competition Pure competition
11-6
Market Concept of Competition
The product (and its value proposition)
11-7
Analyzing Competitors
Share of market Share of mind Share of heart
11-8
Selecting Competitors
Strong versus Weak Close versus Distant “Good” versus “Bad”
11-9
Competitive Strategies for Market Leaders: Expanding the Total Market
New customers More usage
11-10
Figure 11.6 Six Types of Defense Strategies
Defender Flank Preemptive Counteroffensive Mobile Contraction
11-11
Factors Relevant to Pursuing Increased Market Share
Possibility of provoking antitrust action Economic cost Pursuing the wrong marketing-mix
strategy The effect of increased market share on
actual and perceived quality
11-12
Other Competitive Strategies
Market challengers Market followers Market nichers
11-13
Market Challenger Strategies
Define the strategic objective and opponents
Choose a general attack strategy
Choose a specific attack strategy
11-14
General Attack Strategies (1)
Frontal attack
11-15
Flank attack: an enemy’s weak spots are natural targets.
General Attack Strategies (2)
11-16
Encirclement attack: a grand offensive attack on several fronts.
General Attack Strategies (3)
11-17
Bypass attack: bypassing the enemy and attacking easier markets to broaden one’s resource base (by diversifying into unrelated products/ geographical markets, and leapfrogging into new technologies)
General Attack Strategies (4)
11-18
Guerrilla warfare: consists of small, intermittent attacks to harass and demoralize the opponent and eventually secure permanent footholds.
Suitable for smaller firms against a larger one.
General Attack Strategies (5)
11-19
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
11-20
Market Follower Strategies
Counterfeiter Cloner Imitator Adaptor
11-21
Market Nicher Strategies A leader in small market- End-user specialist- Vertical-level specialist- Customer-size specialist- Specific-customer specialist- Geographic specialist- Product or product-line specialist- Product-feature specialist- Job-shop specialist- Quality-price specialist- Service specialist- Channel specialist
Marketing in an Economic Downturn
Invest Get close to
customers Review budgets Use a compelling
value proposition Fine-tune offerings
11-23
Balancing Orientations Competitor-centered Customer-centered
We were going to obsess over our customers and not our competitors. We watch our competitors, learn from them, see the things that
they were doing for customers and copy those things as much as we can. But we were never going to
obsess over them.