Market leader

Brand, product, or firm that has the largest percentage of total sales revenue (the market share) of a market. A
market leader often dominates its competitors in customer loyalty, distribution coverage, image, perceived value,
price, profit, and promotional spending.

Examples of market leaders:

Kodak
Microsoft
Hindustan lever Ltd
McDonalds
Coca Cola
Gillette

Market leader strategies: The company can search for new users by using different strategies as explained below:
• Market penetration strategy ( who might use it but do not ): Depth of sales of a particular product in a
given market. The deeper the penetration, the higher the volume of product sales. In order to expand the
sales of current products in markets where their products are already being sold, marketers utilize market
penetration strategies such as cutting prices, increasing advertising, obtaining better store or shelf positions
for their products, or innovative distribution tactics.
• New market segment strategy ( those who have never used it): A market development strategy targets
non-buying customers in currently targeted segments. It also targets new customers in new segments.
A marketing manager has to think about the following questions before implementing a market development
strategy: Is it profitable? Will it require the introduction of new or modified products? Is the customer and
channel well enough researched and understood?
The marketing manager uses these four groups to give more focus to the market segment decision: existing
customers, competitor customers, non-buying in current segments, new segments.
• Geographical expansion strategy ( those who live somewhere else): In today’s rapidly globalizing
economy, a well-planned and prioritized geographic expansion strategy is an absolute requirement. If
managed properly, geographic expansion can help you reduce costs, gain access to new markets and talent
pools, and perhaps most importantly, provide a robust pipeline to fuel your company’s future growth.

The market leader has to use defensive strategy to reduce the probability of attack, or divert the attacks.
The main types of defensive marketing warfare strategies are:
• Position defence - This involves the defence of a fortified position. This tends to be a weak defense because
you become a “sitting duck”. It can lead to a siege situation in which time is on the side of the attacker, that
is, as time goes by the defender gets weaker, while the attacker gets stronger. In a business context, this
involves setting up fortifications such as barriers to market entry around a product, brand, product line,
market, or market segment. This could include increasing brand equity, customer satisfaction, customer
loyalty, or repeat purchase rate. It could also include exclusive distribution contracts, patent protection,
market monopoly, or government protected monopoly status. It is best used in homogeneous markets where
the defender has dominant market position and potential attackers have very limited resources.
• Mobile defence - This involves constantly shifting resources and developing new strategies and tactics. A
mobile defence is intended to create a moving target that is hard to successfully attack, while
simultaneously, equipping the defender with a flexible response mechanism should an attack occur. In
business this would entail introducing new products, introducing replacement products, modifying existing
products, changing market segments, changing target markets, repositioning products, or changing
promotional focus. This defense requires a very flexible organization with strong marketing,
entrepreneurial, product development, and marketing research skills.
• Flank position - This involves the re-deployment of your resources to deter a flanking attack. You protect
against potential loss of market share in a segment, by strengthening your competitive position in this
segment with new products and other tactics. (see flanking marketing warfare strategies)
• Counter offensive - This involves countering an attack with an offense of your own. If you are attacked,
retaliate with an attack on the aggressor’s weakest point.

Market broadening: Company shifts its focus from current product to the underlying generic need.
A strategy in which a company looks beyond its existing product to the need or want of the consumers which buy
it; thus a company which makes soap powder, knowing that what its consumers want is winter clothes, might
expand its operations to make a bleach.

Market diversification: Diversification into unrelated industries.

A strategy in which a company seeks growth by adding products and markets of a kind unrelated to its existing
products and markets.

Contraction defence: It is strategic withdrawal. Give up weaker territories and reassign resources to stronger
territories. Market leaders can improve their profitability by expanding their market share.
A competitive strategy in which a large organisation withdraws from a market or market segment in which it is not
strong in order to concentrate on another market or other segments in which it has greater strength; also referred to
as Strategic Withdrawal.

Market Challenger Strategies:

Market challengers are seen as those firms in an industry/market which are next, in terms of market share, to the
leaders and are actively challenging the leaders for their dominant position. In essence the challenger has three
strategic alternatives open to him:
(a) Direct or head-on attack using cost/price/value for money as the key strategic variable.
(b) An indirect or flanking approach using product differentiation or promotional activities as a means for winning
consumer preference and loyalty.
(c) A by-pass strategy based upon radical innovation through which the challenger seeks to change existing
purchasing behaviour in favour of a new solution to basic consumer needs.

Types of offensive strategies

The main types of offensive marketing warfare strategies are:
Frontal Attack - This is a direct head-on assault. It usually involves marshaling all your resources including a
substantial financial commitment. All parts of your company must be geared up for the assault from marketing to
production. It usually involves intensive advertising assaults and often entails developing a new product that is able
to attack the target competitors’ line where it is strong. It often involves an attempt to “liberate” a sizable portion of
the target’s customer base. In actuality, frontal attacks are rare. There are two reasons for this. Firstly, they are
expensive. Many valuable resources will be used and lost in the assault. Secondly, frontal attacks are often
unsuccessful. If defenders are able to re-deploy their resources in time, the attacker’s strategic advantage is lost.
You will be confronting strength rather than weakness. Also, there are many examples (in both business and
warfare) of a dedicated defender being able to hold-off a larger attacker.

The strategy is suitable when:

• The market is relatively homogeneous
• Brand equity is low
• Customer loyalty is low
• Products are poorly differentiated
• The target competitor has relatively limited resources
• The attacker has relatively strong resources

Envelopment Strategy (also called encirclement strategy) - This is a much broader but subtle offensive strategy.
It involves encircling the target competitor. This can be done in two ways. You could introduce a range of products
that are similar to the target product. Each product will liberate some market share from the target competitor’s
product, leaving it weakened, demoralized, and in a state of siege. If it is done stealthily, a full scale confrontation
can be avoided. Alternatively, the encirclement can be based on market niches rather than products. The attacker
expands the market niches that surround and encroach on the target competitor’s market. This encroachment
liberates market share from the target.
The envelopment strategy is suitable when:
• The market is loosely segmented
• Some segments are relatively free of well endowed competitors
• The attacker has strong product development resources
• The attacker has enough resources to operate in multiple segments simultaneously
• The attacker has a decentralized organizational structure
Leapfrog strategy -This strategy involves bypassing the enemy’s forces altogether. In the business arena, this
involves either developing new technologies, or creating new business models. This is a revolutionary strategy that
re-writes the rules of the game. The introduction of compact disc technology bypassed the established magnetic
tape based defenders. The attackers won the war without a single costly battle. This strategy is very effective when
it can be realized.

Flanking attack - This strategy is designed to pressure the flank of the enemy line so the flank turns inward. You
make gains while the enemy line is in chaos. In doing so, you avoid a head-on confrontation with the main force.

Guerrilla Warfare
Consists of small , intermittant attacks to harrass and demoralize the opponent to secure permanent foothold.
Conventional and unconventional means of attack are used. e.g.: ARIAL
These include selective price cuts, intense promotion

OTHER Specific Strategies to be followed by the Challenger:

Price discount: A pricing strategy in which a company reduces its price to encourage bulk buying, off-peak use or
early payment.
Lower price goods:
Prestige goods: A term used to designate a limited range of exchange goods to which a society ascribes high status
or value.
Product proliferation ( more variety—Baskin Robbins): occurs when organizations market many variations of the
same products. This can be done through different colour combinations, product sizes and different product uses.
This produces diversity for the firm as it is able to capture its sizeable portion of the market. However, it can also be
considered that marketing so many new products leads to economic resources being wasted; the consumer becomes
confused and mistakes are made in the purchase of products.
Product proliferation is often used by incumbent firms as method of entry deterrence. By developing a large variety
of products, the incumbent firm is able to occupy gaps in the market that potential entrants may have exploited, thus
reducing the threat of competition
Product Innovation: Product/service innovation is the result of bringing to life a new way to solve the customer's
problem – through a new product or service development – that benefits both the customer and the sponsoring
company. (3M)

Market follower strategies

Counterfeiter : Duplicates the leaders product and package and sells it in the black market not through authorized
dealers. Automobile components
Cloner : Emulates the leaders products , name and packaging with slight variations
Imitator: Imitator copies some things from the leader but maintains differentiation in terms packaging , advertising
,pricing etc priya gold
Adapter: Takes leaders product adapts or improves them. Sells product to different markets.
Market nicher strategies: nichemanship means specialization .The various types of specialist roles open to nichers
are:
End user specialist: provide value added services Taj Air caterers
Vertical level specialist: The firm specializes at some vertical level of production distribution chain
Example: Sona steering
Customer size specialist: serve small customers who are ignored by the major players Revolution
Specific customer specialist: sell to one or few customers Bosch
Geographic specialist: sell in a specific geographic region Local brands
Product or product line specialist: produce one product or product line. Himalya
Product feature specialist: firm specializes in producing certain type of product feature. Amway
Service specialist: provide loans on phone