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11 Competitive Dynamics

Chapter Questions

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? What marketing strategies are appropriate at each stage of the product life cycle? How should marketers adjust their strategies and tactics for an economic downturn or recession?
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Figure 11.1 Hypothetical Market Structure

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Expanding the Total Market

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New Ways to Use a Brand

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Protecting Market Share

Responsive anticipation

Creative anticipation

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Figure 11.2 Types of Defense Strategies

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Figure 11.3 The Concept of Optimal Market Share

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Market Challenger Strategies

Define the strategic objective and opponents Choose a general attack strategy Choose a specific attack strategy

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General Attack Strategies

Frontal attack Flank attack Encirclement attack Bypass attack Guerilla warfare

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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

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Market Follower Strategies

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Market Nicher Strategies

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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

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Product Life Cycles

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Figure 11.4 Sales and Profit Life Cycles

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Figure 11.5a Common PLC Patterns: Growth-Slump-Maturity

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Figure 11.5b Common PLC Patterns: Cycle-Recycle

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Figure 11.5c Common PLC Patterns: Scalloped

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Figure 11.6 Style, Fashion, and Fad Life Cycles

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Maintaining a Market Advantage: Trivial Pursuit

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Strategies for Developing a Pioneer Advantage

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Growth Stage Strategies

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Electrolux

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Changing Brand Course

Market Modification

Product Modification

Marketing Program Modification

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Decline

Declining sales Low cost per customer Declining profits Laggards

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Marketing in an Economic Downturn

Invest Get close to customers Review budgets Use a compelling value proposition Fine-tune offerings

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A Compelling Value Proposition

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For Review

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? What marketing strategies are appropriate at each stage of the product life cycle? How should marketers adjust their strategies and tactics for an economic downturn or recession?
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Copyright 2011 Pearson Education, Inc. Publishing as Prentice Hall