Dealing with Competition

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?

Five Forces Determining Segment Structural Attractiveness

Identifying Competitors

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

Industry Concept of Competition

Pure Monopoly
Oligopoly Monopolistic Competition Pure Competition

Market Concept of Competition Competitor Map

Analyzing Competitors

Strategies Objectives Strengths & Weaknesses Selecting Competitors

Strong Vs Weak Close Vs. Distant Good Vs Bad

Analyzing Competitors
Share of market

Share of mind

Share of heart

A Competitors Expansion Plans

Hypothetical Market Structure

10% 20% Market Market Nichers Follower

30% Market Challenger

40% Market Leader

Competitive Strategies for Market Leaders

Expanding the Market Defending the Market Share Expanding the Market Share

Expanding the Total Market

New customers
New-mkt. segment strategy Mkt. penetration strategy Geo-expansion strategy

More usage
Increasing level or quantity / frequency of consumption

Defending Market Share Six Types of Defense Strategies

Defense Strategies

Position Defense

occupying most desirable mkt. space in the minds of customers

Flank Defense Preemptive Defense Counteroffensive Defense Mobile Defense Mkt. broadening or mkt.
diversification Withdrawal

Contraction Defense

Strategic

Optimal Market Share

Factors to be considered before 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

Other Competitive Strategies

Market Challengers

Market Followers

Market Nichers

Market Challenger Strategies

Define the strategic objective and opponents Choose a general attack strategy Choose a specific attack strategy

General Attack Strategies

Frontal Attack Flank Attack

Encirclement Attack

Bypass Attack

Guerrilla Warfare

Pepsi buys Gatorade in a Bypass Strategy

Specific Attack Strategies

Price discounts Lower-priced goods Value-priced goods Prestige goods Product proliferation

Product innovation Improved services Distribution innovation Manufacturingcost reduction Intensive advertising promotion

Samsung Attacks Using Innovation

Market Follower Strategies

Counterfeiter
Cloner Imitator Adapter

Market Nicher Strategies

Balancing Orientations

CompetitorCentered

CustomerCentered

Open-Sky Policy

To fly across the territory of either state without landing. To land in either state for non-traffic purposes, e.g., refueling without boarding or disembarking passengers. To land in the territory of the first state and disembark passengers coming from the home state of the airline. To land in the territory of the first state and board passengers travelling to the home state of the airline.

To land in the territory of the first state and board passengers travelling on to a third state where the passengers disembark To transport passengers moving between two other states via the home state of the airline To transport passengers between the territory of the granting State and any third State state without going through the home state of the airline

To transport cabotage traffic between two points in the territory of the granting State on a service which originates or terminates in the home state of the foreign carrier or outside the territory of the granting State (also known as consecutive cabotage), To transport cabotage traffic of the granting State on a service performed entirely within the territory of the granting State (also known as stand alone cabotage),

Open sky provisions

Free market competition Pricing determined by market forces Fair and equal opportunity to compete Cooperative marketing arrangements Provisions for dispute settlement and consultation Liberal charter arrangements Safety and security