Market Strategies

Market-Scope Strategy

• Single-Market Strategy– Definition: concentration of efforts in a single segment.

– Objective: To find a segment currently being ignored or served inadequately and meet its needs.

– Requirements: a) Serve the market wholeheartedly despite initial difficulties. b) Avoid competition with established firms.

– Expected results: low costs; higher profits

• Multimarket Strategy– Definition: Serving several distinct markets.

– Objective: To diversify the risk of serving only one market.

– Requirements: a) Careful selection of segments to serve. b) Avoid confrontation with companies serving the entire market.

– Expected results: higher sales; higher market share

Market-Scope Strategy - Continued

• Total-Market Strategy– Definition: Serving the entire spectrum of the market by selling

differentiated products to different segments in the market.

– Objective: To compete across the board in the entire market.

– Requirements: a) Employ different combinations of price, product, promotion and distribution strategies in different segments. b) Top management commitment. c) Strong financial position.

– Expected results: increased growth; higher market share

Market-Geography Strategy

• Local-Market Strategy– Definition: Concentrate efforts in immediate vicinity.

– Objective: To maintain control of the business.

– Requirements: a) Good reputation in the geographic area. b) Good hold on requirements of the market.

– Expected results: short term success--need to expand

• Regional-Market Strategy– Definition: Operate in a region.

– Objective: To diversify risk of dependence on one part of a region and to keep control centralized.

– Requirements: a) Management commitment to expansion. b) Adequate resources. c) Logistical ability to serve a regional area.

– Expected results: increased growth; increased market share; keep up with competitors.

Market-Geography Strategy - Continued

• National-Market Strategy– Definition: Operate nationally.– Objective: To seek growth.– Requirements: a) Management commitment. b) Capital resources. c)

Willingness to take risks.– Expected results: increased growth, market share and profitability

• International-Market Strategy– Definition: Operate outside national boundaries.– Objective: To seek opportunities beyond domestic business.– Requirements: a) Management commitment. b) Capital resources. c)

Understanding of international markets.– Expected results: increased growth, market share and profitability

Market-Entry Strategy

• First-In Strategy– Definition: First to enter the market.– Objective: To create an insurmountable lead.– Requirements: a) Willingness & ability to take risks. b) Technological competence. c)

Strive to stay ahead. d) Heavy promotion. e) Create primary demand. f) Carefully evaluate strengths.

– Expected results: reduced costs via experience; increased growth, market share and profits

• Early-Entry Strategy– Definition: Enter shortly after the leader.– Objective: Stop the first entrant from creating a stronghold in the market.– Requirements: a) Superior marketing strategy. b) Ample resources. c) Strong

commitment to challenge the market leader.– Expected results: increased growth, market share and profits

Market-Entry Strategy - Continued

• Laggard-Entry Strategy– Definition: Enter during tail end of growth stage or during maturity stage

as an imitator or initiator

– Objective: Imitator - capture that part of the market that is not brand loyal. Initiator - serve the needs of the market better than present firms.

– Requirements: Imitator: a) Market research ability. b) Production capability. Initiator: a) Market research ability. b) Ability to generate creative marketing strategies.

– Expected results: Imitator - increased short term profits; Initiator - put market on a new growth path; increased profits; some growth opportunities.

Market-Commitment Strategy

• Deals with level of financial and or management resources a firm is willing to commit to a market.

• May be strong average or light

• Intentional, or a matter of circumstances and competitive forces?

Market-Dilution Strategy

• Demarketing Strategy

– Definition: Discouraging customers from seeking the product.

– Objective: To maintain customer goodwill during periods of shortages. Requirements: a) Monitor customer time requirements. b) Ration product supplies. c) Divert customers with an immediate need to customers who have a supply but no immediate need. e) Find out and suggest alternative products for meeting customer needs.

– Expected results: increased long term profits; strong customer goodwill and loyalty

• Pruning-of-Marginal-Markets Strategy

– Definition: Weeding out markets with unacceptable rates of return.

– Objective: To divert investments in growth markets.

– Requirements: a) Gain good knowledge of the chosen markets. b) Concentrate all energies on these markets. c) Develop unique strategies to severe the chosen markets.

– Expected results: long-term growth; improved ROI; decrease in market share.

Market-Dilution Strategy - Continued

• Key-Markets Strategy– Definition: Focus on selected markets.– Objective: To serve the selected markets extremely well.– Requirements: a) Gain good knowledge of the chosen markets. b) Concentrate all

energies on these markets. c) Develop unique strategies to severe the chosen markets.

– Expected results: increased profits; increased market share in the selected markets

• Harvesting Strategy– Definition: Deliberate effort to let market share slide.– Objective: To generate additional cash flow, increase short-term earnings or avoid

antitrust action.– Requirements: High market share.– Expected results: sales decline but useful revenues still occur.