kotler - competition

Dealing with Competition

9

Marketing ManagementA South Asian Perspective, 13th ed

Copyright © 2009 Dorling Kindersley (India) Pvt. Ltd. 9-2

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?


Chapter Questions (cont.)

• How should market challengers attack market leaders?

• How can market followers or nichers compete effectively?


Mobile service providers

compete with each other

through innovative

marketing ideas


Figure 9.1 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


Figure 9.2 Strategic Groups


Figure 9.4 A Competitor’s Expansion Plans


Table 9.1 Customer Ratings of Competitors on Key Success Factors


Strengths and Weaknesses

Share of marketShare of market

Share of mindShare of mind

Share of heartShare of heart


Steps in Benchmarking

• Determine which functions or processes to benchmark

• Identify the key performance variables to measure

• Identify the best-in-class companies

• Measure the performance of best-in-class companies


Steps in Benchmarking (cont.)

• Measure the company’s performance

• Specify programs and actions to close the gap

• Implement and monitor results


Fake brands in Rural Markets

• Look-alike

• Spell-alike

• Duplicates


Figure 9.5 Hypothetical Market Structure

10%

Market

Nichers

20%

Market

Follower

30%

Market

Challenger

40%

Market

Leader


Gap Tried to Appeal to Too Broad a Market


Expanding the Total Market

New customersNew customers

More usageMore usage


Figure 9.6 Six Types of Defense Strategies


Figure 9.7 Optimal Market Share


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


Other Competitive Strategies

Market

Challengers

Market

NichersMarket

Followers


Market Challenger Strategies

• Define the strategic objective and opponents

• Choose a general attack strategy

• Choose a specific attack strategy


In Sri Lanka, Tapal has challenged Unilever to emerge as a serious

competitor


General Attack Strategies

Frontal Attack

Encirclement

AttackBypass Attack

Flank 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• Manufacturing-cost

reduction• Intensive advertising

promotion


Market Follower Strategies

Counterfeiter

Cloner

Imitator

Adapter


Market Nicher Strategies


Niche Specialist Roles

• End-User Specialist• Vertical-Level

Specialist• Customer-Size

Specialist• Specific-Customer

Specialist• Geographic

Specialist

• Product-Line Specialist

• Job-Shop Specialist• Quality-Price

Specialist• Service-Specialist• Channel Specialist


Balancing Orientations

Competitor-

Centered

Customer-

Centered


Marketing Debate

How do you attack a category leader?

Take a position:1. The best way to challenge a leader is toattack its strengths.

or

2. The best way to attack a leader isto avoid a head-on assault and to adopta flanking strategy.


Marketing Discussion

Pick an industry. Classify firms according to the

four different roles they might play. How would you characterize the

nature of competition? Do the firms follow the principles

described in this chapter?

kotler - competition

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