9

Dealing
with Competition
Mr. Ajit Arya
Faculty-Marketing
Department of Business Studies
C. U. Shah College of Engg. & Tech.
 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?
Mobile service
providers compete
with each other
through innovative
marketing ideas
Five Forces Determining Segment Structural
Attractiveness
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
Strategic Groups
Analyzing Competitors

Objectives

Strategies
Competitor
Actions

Reaction
Patterns Strengths &
Weaknesses
A Competitor’s Expansion Plans
 Strengths and Weaknesses

• In general, a company should monitor three variable when

analyzing competitors:
– Share of market – The competitor’s share of the target
market.
– Share of mind – The percentage of customer who
named the competitors in responding to the statement,
“Name the first company that comes to mind in this
industry”
– Share of heart – The percentage of customer who
named the competitor In responding to the statement,
“Name the company from which prefer to buy the
product.”
 Selecting Competitors
• Strong versus Weak
• Close versus Distant (near to your product)
• Good versus Bad
 Hypothetical Market Structure

10% 20% 30% 40%

Market Market Market Market
Nichers Follower Challenger Leader
Market Leader
Strategies
Expanding the Total Market

New customers

More usage
Six Types of Defense Strategies
Optimal Market Share
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
Other Competitive Strategies

Market
Challengers

Market Market
Followers Nichers
Market Challenger Strategies

• Define the strategic objective and

opponents
• Choose a general attack strategy
• Choose a specific attack strategy
Define the strategic objective and
opponents
• It can attack the market leader.
• It can attack firms of it’s own size that are
not doing the job and are underfinanced.
• It can attack small local and regional firms.
In Sri Lanka, Tapal has challenged
Unilever to emerge as a serious
competitor
 Attack Strategies

(4) Bypass attack

(2) Flank attack

(1) Frontal attack

Attacker
Defender

(3) Encirclement attack

(5) Guerilla attack

Specific Attack Strategies

• Price discounts • Improved services

• Lower-priced goods • Distribution innovation
• Value-priced goods • Manufacturing-cost
• Prestige goods reduction
• Product proliferation • Intensive advertising
• Product innovation promotion
Market Follower Strategies

Counterfeiter

Cloner

Imitator

Adapter
 Niche Specialist Roles
• End-User Specialist
• Vertical-Level Specialist
• Customer-Size
Specialist
• Specific-Customer
Specialist
• Geographic Specialist
• Product-Line Specialist
• Job-Shop Specialist
• Quality-Price Specialist
• Service-Specialist
• Channel Specialist
 Balancing Orientations

Customer Competition
+ ID opportunities
+ Fighter orientation
+ Long-run profit
+ Alert
+ Emerging needs & groups
+ Exploit weaknesses
- Reactive
Thank You!!!