Dealing With CompetitionBy: W. Rofianto

• 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?

Today’s Agenda

Hypothetical Market Structure

Source: Kotler & Keller (2012)

Expanding the Total Market Demand

New Customer

More usage

Protecting Market Share

Responsive anticipation

Protecting Market Share

Creative anticipation

Protecting Market Share

Defense Strategies

The Concept of Optimal Market Share

• Define the strategic objective and opponents• market leader

• own size that are not doing the job

• small local and regional firms

• Choose a general attack strategy

• Choose a specific attack strategy

Market Challenger Strategies

• Flank attack

• Encirclement attack

• Bypass attack

• Frontal attack

• Guerilla warfare

General 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

Specific Attack Strategies

Market Follower Strategies

1. Counterfeiter2. Cloner3. Imitator4. Adapter

Market Nicher Strategies

Product Life Cycles

Strategies for Developing a Pioneer Advantage

Growth Stage Strategies

improves product quality and adds new features and improved styling. adds new models and flanker products. enters new market segments. increases its distribution coverage and enters new distribution

channels. shifts from awareness and trial communications to preference and

loyalty communications. lowers prices to attract the next layer of price-sensitive buyers.

Maturity Stage

Market Modification

Product Modification

Marketing Program Modification

• Declining sales

• Low cost per customer

• Declining profits

• Laggards

Decline

• Invest

• Get close to customers

• Review budgets

• Use a compelling value proposition

• Fine-tune offerings

Marketing in an Economic Downturn

Business has only two basic functions

marketing and innovation.

(Peter Drucker )

rofianto@gmail.com