Session 17 MG 220 MBA - 14 Oct 10

MG 220 Marketing ManagementMBA 10

Fall 2010

Muhammad Talha Salam, Asst. [email protected]

Access it online: www.slideshare.net/talhasalam

Part 4: Building Strong Brands

> Competitive Strategies for Market Leaders> Other Competitive Strategies> Balancing Customer & Competitive

Orientations

> Case Study 1: ABN AMRO (Class Discussion)> Quiz 5: Part 4 (Chap 9 & 10 – 12/ed. OR

Chap 10 & 11 – 13/ed.)

Class Presentation | Session 17 | 13 Oct 2010

MG 220 Marketing Management 2Access it online: www.slideshare.net/talhasalam

Competitive Strategies for Market Leaders• Different roles firms can have in a target market:

– Leader– Challenger– Follower– Nicher

• In most of industry, there is an established market leader.– Mobilink (Celcos), Gillette (Razors), TCS (Courier) etc.

• Although they have distinct place but unless they are a legal monopoly, they face tough time always!

• Staying a leader requires careful strategic action:– Finding ways to Expand Total Market Size– Must Protect current Market Share– Try to increase Market Share (even if current market size is not

increasing)


Competitive Strategies for Market LeadersExpanding the Total Market• If overall market size increases, biggest gainer is Market

Leader• Different ways of doing it:

– New Customers• Market Penetration strategy Users who might use it but don’t• New-Market segment strategy Users who have never used it• Geographical-expansion strategy Users who live elsewhere

– More Usage• Increase level/quantity of consumption• Increase frequency of consumption• Identify other uses (food products finding new recipes)• Communicating effectively as to when it should be replaced

– Product development can also spur new uses• Consider Maggi


Competitive Strategies for Market LeadersProtecting/Defending Current Market Share• Leader is like a large elephant swarmed by bees• While increasing share and market size, it must also continuously defend

its current business• Continuous innovation – to keep increasing its competitive strength and

value to consumers• In this process of satisfying customer needs, a firm may be engaged in:

– Responsive marketing – finding needs and fulfilling them– Anticipative marketing – looking ahead into what needs a customer may have in

future– Creative marketing – Discovering & creating solutions not asked for!

Sony is a market-driving firm not a market-driven firm. Sony doesn’t serve markets, Sony creates markets


Competitive Strategies for Market LeadersProtecting/Defending Current Market Share (…contd.)• Defending is just like military defensive strategy. Any of these six positions

can be taken• All of these points have examples in branding strategies by brands. If their

strategies are observed carefully, these patterns of defensive strategy can be seen clearly– Position defense – Occupying most desirable position in market & minds of consumers and

making it impregnable– Flank defense – Creating outposts to protect weak fronts or even launch counterattacks– Preemptive defense – Attack before enemy does– Counteroffensive defense – Responding to attack by launching own strategy against rival– Mobile defense – Leader can stretch its domain and move into new territories– Contraction defense – Companies at times realize that they cannot defend all of their

territory and go for a planned contraction (also known as strategic withdrawal)


Competitive Strategies for Market LeadersIncrease/Expand Market Share• Gaining one share point can be worth millions in revenue• Leader must always focus on carefully increasing market

share• Market share increase may not always imply increased

profitability and has its own share of problems• Key considerations

– Possibility of provoking anti-trust– Economic cost – Concept of optimal market share. Ahead of this value,

profitability may actually decline– Pursuing wrong marketing-mix strategy– Effect of increased market share on actual perception and perceived

quality


Other Competitive Strategies

Market-Challenger Strategies• Market Challengers set high aspirations and leverage their

resources at fullest while market leader often runs business as usual

• Strategies used by Market-Challenger– Defining the strategic objective & opponent(s)

• It can attack the market leader• It can attack firms of its own size• It can attack small local and regional firms

– Choosing a general attack strategy• Frontal attack• Flank attack• Encirclement attack• Bypass attack – technological leapfrogging• Guerrilla warfare

– Choosing a specific attack strategy• Many options available

Examples of Specific attack strategyPrice discount, Lower priced goods, Value-priced goods & services, Prestige goods, Product proliferation, Product innovation, Improved services, Distribution innovation, Manufacturing-cost reduction, Intensive advertising promotion



Market-Follower Strategies• Many firms prefer following market leader rather than challenging• Strategies used by Market-Followers

– Counterfeiter– Cloner– Imitator– Adapter



Market-Nicher Strategies• Consider being a leader in a small market• Nichers get to know their customers so well that they also charge

premium• Creating/Identifying niches is a continuous process


Balancing Customer & Competitive Orientations• Competitive Orientation

– Companies always observe & focus on competitors– Fighter’s orientation– Always observing strategies, strengths and weaknesses for competitors

• Customer Orientation– Focusing mainly on customers rather than competition– Better placed to identify new opportunities

MG 220 Marketing ManagementMBA 10

Fall 2010

Muhammad Talha Salam, Asst. [email protected]

Access it online: www.slideshare.net/talhasalam

Part 5: Shaping the Marketing Offerings

> LEFTOVER TOPIC FROM CHAP 10: Devising Brand Strategy

> Product Characteristics> Product & Brand Relationships> Differentiation

> Case Study 2: LEGOClass Presentation | Session 18 | 18 Oct 2010

Session 17 MG 220 MBA - 14 Oct 10

Business

Transcript of Session 17 MG 220 MBA - 14 Oct 10