Competitive Strategy in MARKETING

1. COMPETITIVE
MARKETING
STRATEGIES

2. OUTLINE
• Introduction
• Strategies for
• Market Leaders
• Challengers
• Followers, and
• Nichers

3. INTRODUCTION

4. STRATEGIES FOR MARKET LEADERS
Market Leader’s objectives:
•Expand the total market by
• Finding new users
• Creating new uses, and
• Encouraging more usage
•Protect its current market share by
• Adopting defense strategies
•Increase its market share
• Note the relationship between market share and
profitability

5. •For example, Rupa Publishers is a
leading brand in book publishing in
India.
•They have adopted a new promotional
activity for their new book for the new
customers as well as protecting its
market shares of existing customers.

6. DEFENSE STRATEGY
• A market leader should generally adopt a defense
strategy
• Six commonly used defense strategies
• Position Defense
• Mobile Defense
• Flanking Defense
• Contraction Defense
• Pre-emptive Defense
• Counter-Offensive Defense

7. Position Defense
• Least successful of the defense strategies
• Involves building superior brand power, and making the brand
almost impregnable.
• e.g. Mercedes was using a position defense strategy
until Toyota launched a frontal attack with its Lexus.
• Google is the market leader in “cloud” technology
services. To stay ahead of new competitors, the
company actually attacks itself by producing new
products that force their old ones into obsolescence.

8. Mobile Defense
•By market broadening and
diversification
•For marketing broadening, there is
a need to
•Redefine the business (principle of
objective), and
•Focus efforts on the competition (the
principle of mass)

9. • ITC (Indian Tobacco Company) have diversified their
strategies and come into food products (brand
“Asirbaad”) and FMCG (brand “VIVEL” etc) and 5 star
Hospitality (brand “SONAR BANGLA”)
• Legend Holdings, the top China PC maker Legend
has announced a joint venture with AOL to broaden
its business to provide Internet services in the
mainland

10. Flanking Defense:
• Tactics of Marketing where a market leader
not only satisfies in Position defense but also
puts up an outpost to defend the weak front
or to act as a counter invasion base
• Secondary markets (flanks) are the weaker
areas and prone to being attacked
• Pay attention to the flanks

11. •In India, Bharti Airtel keeps its call
rates higher than Vodafone, and
expenses those revenue to
promotions to flank others.
•Such as the new advertisement by
Airtel. They make a psychological
effect through those promotions that
what they give others don’t.

12. Contraction Defense
•Withdraw from the most vulnerable
segments and redirect resources to
those that are more defendable
•By planned contraction or strategic
withdrawal
•e.g. India’s TATA Group sold its soaps
and detergents business units to
Unilever in 1993

13. Pre-emptive Defense
• A more aggressive maneuver is to attack before enemy
starts its offense. A company can launch a preemptive
defense by several ways. It can wage guerrilla action
across the market- hitting one competitor here, another
there and keep every one off balance; or it can try to
achieve grand market envelopment.
• Detect potential attacks and attack the enemies first
• Let it be known how it will retaliate
• To protect its position in the diet food arena, Thompson
Medical, manufacturer of Slim-Fast introduced Ultra Slim
Fast that was directed at a wealthier market demographic
that surprised competitors, which were selling near cost.

14. Counter-Offensive Defense
• Responding to competitors’ head-on attack
by identifying the attacker’s weakness and
then launch a counter attack
• e.g. Toyota launched the Lexus to respond to
Mercedes attack
• high-end automaker, Mercedes was attacked
by BMW with the introduction of the higher
priced BMW Series 5, 7, and 8 models. To
counter-attack, Mercedes introduced the
Series 190, later known as the C.

15. MARKET CHALLENGER STRATEGIES
The market challengers’ strategic objective is to gain
market share and to become the leader eventually
How?
• By attacking the market leader
• By attacking other firms of the same size
• By attacking smaller firms

16. Types of Attack Strategies
• Frontal attack
• Flank attack
• Encirclement attack
• Bypass attack
• Guerrilla attack

17. FRONTAL ATTACK
• Seldom work unless
• The challenger has clear distinctive advantage(s)
• In a pure frontal attack, the attacker matches its opponent’s
product, advertising, price, and distribution. A modified frontal
attack, such as cutting price vis-a-vis convinces the market that
it’s product is equal to the leaders product.
• e.g. Newly launched BMW series advertisement challenged
all other big commercial family vehicles by its speed,
trustworthyness and safety.

18. • RCA, Xerox and Univac tried to attack IBM’s
mainframe business but failed due to lack of
competitive advantage.
• The Cola wars between Pepsi and Coke
starting from the early 1900s is an example
of frontal attack strategies.
• McDonald’s McCafes which are coffee joints
are seen as a direct frontal attack on
Starbucks.

19. FLANK ATTACK
• Attack the enemy at its weak points or blind spots i.e.
its flanks
• Ideal for challenger who does not have sufficient
resources
• An enemy’s weak spots are natural targets. A flank
attack can be directed along two strategic dimensions-
geographic and segmental. In a geographic attack,
challenger target the areas the leader’s product is
under performing. Other flanking strategy is to serve
uncovered market needs, as Japanese automakers did
when they developed more fuel-efficient cars.

20. • Mercedes-Benz began a flanking maneuver against
General Motors back in the 1950s, targeting the
prestige market (dominated by the Cadillac brand).
They purposely priced their luxury cars much
higher than Cadillac as part of their campaign to
represent Mercedes as a superior car (“engineered
like no other car in the world”).
• Still today also, MB uses this strategy.

21. ENCIRCLEMENT ATTACK
• Attack the enemy at many fronts at the same time
• Ideal for challenger having superior resources
• e.g. Seiko attacked on fashion, features, user
preferences and anything that might interest the
consumer
• In making a stand against rival Microsoft, Sun
Microsystems licensed its JAVA software to hundreds
pf companies and millions of software developers for
all sorts of consumer devices. As consumer electric
products began to go digital, Java started appearing in

22. BYPASS ATTACK
• By diversifying into unrelated products or markets
neglected by the leader
• Could overtake the leader by using new technologies
• The most indirect assault strategy is the bypass. It
means bypassing enemy and attacking easer markets to
broaden one’s resource based. This strategy offers three
lines approach: diversifying into unrelated product,
diversifying into new geographic markets, leapfrogging
into new technologies to supplant existing products.
• e.g. Pepsi use a bypass attack strategy against Coke in
China by locating its bottling plants in the interior

23. GUERRILLA ATTACK
• By launching small, intermittent hit-and-run attacks to
harass and destabilize the leader
• Usually use to precede a stronger attack
• Guerrilla challenger uses both conventional and
unconventional means of attack. These include selective price
cuts, intense promotional blitzes, and occasional legal action.
Normally Guerrilla warfare is practiced by smaller firm against
larger one.
• Guerrilla Marketing is about taking the consumer by surprise,
make an indelible impression and create copious amounts of
social buzz. Guerrilla marketing is said to make a far more
valuable impression with consumers in comparison to more
traditional forms of advertising and marketing.
• This is due to the fact that most guerrilla

24. • airlines use short promotions to attack the national
carriers especially when passenger loads in certain
routes are low
• KBC 2014 in Sony Entertainment made an
emotional attack on the viewers.

25. MARKET-FOLLOWER STRATEGIES
• Theodore Levitt in his article, “Innovative Imitation”
argued that a product imitation strategy might be
just as profitable as a product innovation strategy
e.g. Product innovation--Sony
Product-imitation--Panasonic

26. MARKET-FOLLOWER STRATEGIES
(CONT’D)
• Each follower tries to bring distinctive
advantages to its target market--location,
services, financing
• Four broad follower strategies:
• Counterfeiter (which is illegal)
• Cloner e.g. the IBM PC clones
• Imitator e.g. car manufacturers imitate the style
of one another
• Adapter e.g. many Japanese firms are excellent
adapters initially before developing into
challengers and eventually leaders

27. MARKET-NICHER STRATEGIES
• Smaller firms can avoid larger firms by targeting
smaller markets or niches that are of little or no
interest to the larger firms
e.g. Logitech– keyboard & mouse
Microbrewers--special beers

28. MARKET-NICHER STRATEGIES
• Nichers must create niches, expand the niches and
protect them
• e.g. Nike constantly created new niches--cycling, walking,
hiking, cheerleading, etc
• What is the major risk faced by nichers?
• Market niche may be attacked by larger firms once they
notice the niches are successful

29. THANK YOU