3. MARKET LEADER STRATEGIES
3.
Firm with the largest market share in a product
Market
Leads the other firms in price changes, new
product introductions, distribution coverage and
promotional intensity
Examples: Microsoft – various versions
Colgate – various flavor
TV3 – various programs
Duracell
Hertz
Kodak
Boeng
STRATEGY APPROACHES:
1. Expanding the total market
2. Defending market share
4.
5. MARKET LEADER STRATEGIES
3.
EXPANDING THE TOTAL MARKET
1. NEW CUSTOMERS
• Attract buyers who are unaware of the product
or who are resisting it because of price or lack
of certain features:
a. who might use it but do not
(market-penetration strategy)
b. who have never used it
(new-market segment strategy)
c. those who live elsewhere
(geographical-expansion strategy)
6. MARKET LEADER STRATEGIES
3.
EXPANDING THE TOTAL MARKET
2. MORE USAGE
• By increasing:
a. the level or quantity of consumption
b. the frequency of consumption
• The amount of consumption can be increased:
- through packaging or product design.
- by making the product more available.
• The frequency of consumption can be increased
by identifying:
- additional opportunities to use the brand in the
same basic way
- completely new and different ways to use the
brand
7. MARKET LEADER STRATEGIES
3.
DEFENDING MARKET SHARE
The leader is like a large elephant being attacked by
a swarm of bees.
The best way to defend is by focusing on
“continuous innovation”:
developing new product and customer services,
distribution effectiveness and cost cutting.
8. MARKET CHALLENGERSTRATEGIES
To increase market share, challenger can attack:
i. The market leader
- make good sense if the leader is not serving
the market well.
ii. Firms of its own size
- that are not doing the job and are underfinanced
iii. Small local and regional firms
Specific Attack Strategy:
i. Price discount
ii. Prestige goods
iii. Product proliferation
iv. Product innovation
v. Distribution innovation
vi. Intensive advertising promotion
9. MARKET FOLLOWER STRATEGIES
Followers can achieve high profits because it did not bear
any of the innovation expenses
4 Broad Strategies:
i. Counterfeiter
- duplicates the leader’s product and package and sell it on the
black market or disreputable dealers.
Example: pirate CDs, Rolex
ii. Cloner
- emulate the leader’s products, name, and packaging with
slight variations.
iii. Imitator
- copies some things from the leader but maintain differentiation in
terms of packaging, advertising, pricing or location.
iv. Adapter
- takes the leader’s products and adapts or improves them
- may sell to different markets
- adapters may grow into the future challengers.
10. MARKET NICHERSTRATEGIES
Leader in a small market, or niche.
Even large and profitable firms use niching strategies for
some of their business.
Why niching is so profitable?
- Nichers know their target market very well that it meet
their needs very much better than other firms
selling to this niche casually.
- As a result, nichers can charge a substantial price over
costs. The nichers achieve high margin, whereas the
mass marketers achieve high volume.