MARKETING MANAGEMENT 12 th edition 11 Dealing with

MARKETING MANAGEMENT 12 th edition 11 Dealing with Competition Kotler Keller

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? • How should market challengers attack market leaders? • How can market followers or nichers compete effectively? 2

Competition in the Jeans Market 3

Figure 1. 1 Five Forces Determining Segment Structural Attractiveness 4

Identifying Competitors 5

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 6

Industry Concept of Competition Pure Monopoly Oligopoly Monopolistic Competition Pure Competition 7

Figure 11. 2 Competitor Map 8

Figure 11. 4 A Competitor’s Expansion Plans 9

Analyzing Competitors Share of market Share of mind Share of heart 10

Table 11. 2 11

Figure 11. 5 Hypothetical Market Structure 10% 20% Market Nichers Follower 30% Market Challenger 40% Market Leader 12

Expanding the Total Market New customers More usage 13

Figure 11. 6 Six Types of Defense Strategies 14

Figure 11. 7 Optimal Market Share 15

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 16

Other Competitive Strategies Market Challengers Market Followers Market Nichers 17

Market Challenger Strategies • Define the strategic objective and opponents • Choose a general attack strategy • Choose a specific attack strategy 18

General Attack Strategies Frontal Attack Flank Attack Encirclement Attack Bypass Attack Guerrilla Warfare 19

Pepsi buys Gatorade in a Bypass Strategy 20

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 21

Samsung Attacks Using Innovation 22

Market Follower Strategies Counterfeiter Cloner Imitator Adapter 23

Market Nicher Strategies 24

Balancing Orientations Competitor. Centered Customer. Centered 25

Marketing Debate ü How do you attack a Category Leader? Take a position: 1. The best way to challenge a leader is to 2. attack its strengths. 3. 2. The best way to attack a leader is 4. to avoid a head-on assault and to adopt 5. a flanking strategy. 26

Marketing Discussion ü 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? 27