Market leader Holds largest market share Many industries

Market leader. • Holds largest market share. • Many industries contain one firm that is the acknowledged market leader. • Ex. Microsoft (Computer software), Intel (Microprocessor), Gilette(Razor blades), Visa(Credit cards).

Problems • Unless a dominant firm enjoys a legal monopoly, its life is not altogether easy. It must maintain constant vigil. • Product innovations might hurt the leader (Nokia’s and Erricson’s digital cell phones took over from Motorola’s analog models). Maruti Vs Ambassador and premier padmini. )HMT vs Titan • All-Out liquid vaporizers. • The leader might misjudge its competitors and left behind. (Eg. Sears to Kmart and then Wal. Mart, All-out).

To remain no. 1 • The firm must find ways to expand the total market demand. • The firm must protect its current market share through good defensive and offensive actions. • The firm can try to increase its market share even when it is constant.

Expanding total market demand • New customers (market-penetrationsachet marketing, new-market-segments. Dabur Honey, geograhical expansion). • More Usage ( Soft-drinks, 500 ml, Qantity, Frequnecy, Colgate, Oral. B, Gillete Mach-3).

Defending market share • Continuous innovations. • Sony.

6 Six Types of Defense Strategies • • • Position defense Flank Preemptive Counteroffensive Mobile Contraction

Position defense • It includes building superior brand power, and making the brand almost impregnable (Impossible to capture or enter by force ). • Ex. Nescafe, Mercedes, Amul,

Flank(A lateral part or side ) defense • The market leader should also erect outposts to protect weak front or possibly serve as an invasion base for counterattack. • Ex. Smirnoff (Brand of Heublein) which had 23% of market share of vodka market in US was attacked by low-priced Wolfschimdt, Heublein raised the price and put the increased revenue into advertising. • At the same time, Heublin introduced another brand, Relska to compete with Wolfschmidt and Popov , to sell less than Wolfschmidt.

Preemptive defense. • It’s the more aggressive move with attacking before the enemy starts its offense. • Preannouncements. (Microsoft). • Bank of America (ATM’s).

Counteroffensive defense. • When attacked , most market leaders will respond with a counterattack. • In a counteroffensive, the leader can meet the attacker frontally or hit its flank. • An effective counterattack is to invade the attacker's main territory so that it will have to pull back some of its troop to defend its territory.

Mobile defense • In this the leader stretches its domain over new territories that can serve as future centers for defense and offense through market broadening and market diversification. • Market broadening involves shifting focus from the current product to the underlying need. Ex. ITC ltd (diversification).

Contraction defense • Large companies sometimes recognize that they can no longer defend all of their territory. • The best course of action then appears to be planned contraction (also called strategic withdrawl). Ex. Hindustan motors.