Session 17 MG 220 MBA - 14 Oct 10

MG 220 Marketing Management
MBA 10
Fall 2010
Muhammad Talha Salam, Asst. Professor
talha.salam@nu.edu.pk
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

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)
MG 220 Marketing Management 2

Leaders
Expanding 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

Leaders
Protecting/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

Leaders
Protecting/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)

Leaders
Increase/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 strategy
Price 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 Management
MBA 10
Fall 2010
Muhammad Talha Salam, Asst. Professor
talha.salam@nu.edu.pk
Part 5:
Shaping the Marketing Offerings
> LEFTOVER TOPIC FROM CHAP 10: Devising Brand Strategy
> Product Characteristics
> Product & Brand Relationships
> Differentiation
> Case Study 2: LEGO
Class Presentation | Session 18 | 18 Oct 2010

Session 17 MG 220 MBA - 14 Oct 10

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