<COURSE NAME>

<SEMESTER>

<STRETERGIC MANAGEMET>
<M-306>
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CONTENT

UNIT - 1: Marketing situation analysys & Analysing competators stretergies.........................3

UNIT - 2: <UNIt Name>...........................................................................................................8
YNo table of contents entries found.

UNIT – 1: ANALYZING MARKET SITUATION AND COMPETITOR’S STRATEGIES

STRUCTURE
1.0 Learning Objectives
1.1 Introduction
1.2 Analysis of Market Situation
1.2.1 Market Analysis- An Overview
1.2.2 Purpose for analyzing the Market Situations
1.2.3 The 5 Cs of Market Situation Analysis is as follows
1.2.4 SWOT Analysis
1.2.5 Advantages of Market Analysis
1.2.6 Disadvantages of Market Analysis
1.2.7 Internal Market Situation Analysis
1.2.8 External Market Situation Analysis
1.2.9 Other Methods of Market Situation Analysis
1.2.10 Design of Market Situation Analysis

1.3 Analysis of Competitor Strategies

1.3.1 Understanding the Competitors
1.3.2 Importance of analyzing competitor strategies:
1.3.3 Different types of Competitors
1.3.4 Elements of Competitors analysis
1.4 Estimating competitor’s reaction pattern and competitive position.
1.4.1 Competitors based on reaction patterns
1.4.2 Competitors Competitive Position.
1.4.3 Principles of competitive positioning
1.5 Summary
1.6 Keywords
1.7 Learning Activity
1.8 Unit End Questions
1.9 References
1.0 LEARNING OBJECTIVES

After studying this unit, you will able to:

 Purpose of market situation analysis.

 Analyze the market condition and requirement.
 Advantages of analyzing situation of market.
 Who the competitors are?
 Analyze the competitor’s strategies.
 Study the reaction pattern of competitors
 Competitive position

2.0 INTRODUCTION

We've come across the terms market and marketing many times in business world. Both
are similar sounding terms and refer to the same topic. 'Market' and 'marketing,' on the other
hand, are two distinct concepts that are related to one another. Market evaluation and
situation analysis give you a "road map" to help you make better decisions as you carry out
your market development strategies. Marketing research is the function that connects the
consumer, customer, and general public to the marketer through information that is used to
identify and define marketing opportunities and problems, generate, refine, and evaluate
marketing actions, track marketing performance, and improve understanding of marketing as
a process. While developing the market strategy it is necessary to do market research. Market
research is the process of acquiring, analyzing, and interpreting data in order to assist in the
resolution of marketing problems. We employ market research for a variety of reasons. It
assists us in making informed decisions, such as establishing the feasibility of introducing a
new product before investing time and money into it. With market situation analysis it is
important to analyze the competitor’s. Competitive market research focuses on identifying
and analyzing key market indicators that might help you distinguish your products and
services from those of your competitors. Comprehensive market research lays the
groundwork for a successful sales and marketing plan that sets your firm apart from the
competition.
Marketing as a commercial discipline is a relatively new development. Exchanges have
occurred throughout history, from the period of barter to the contemporary complicated
marketing system. Over decades, marketing concepts have evolved significantly. Even after
marketing was elevated to the status of a full–fledged business discipline.
More than any other corporate activity, marketing is concerned with the client. It is centred
on the consumer. Establishing relationships based on the perceived worth of the consumer
and Many individuals believe that marketing is synonymous with selling and advertising.
And it's understandable — we're inundated with television advertising, newspaper
advertisements, direct mail offers, sales calls, and online solicitations on a daily basis.
However, selling and advertising are merely the tip of the iceberg when it comes to
marketing. They are two of several marketing roles and are frequently not the most critical.
There are two marketing principles that provide us with a comprehensive understanding of
marketing. They are as follows:
A) The conventional marketing idea.
B) Contemporary marketing idea
Marketing, in the conventional sense, refers to the activities that result in the transfer of
ownership of commodities and the management of their physical distribution. It encompasses
all operations aimed at ensuring the flow of products and services from producers to
consumers, as well as those aimed at the establishment of time, place, and possession utilities.
However, marketing as a modern idea is more than a physical process or collection of
actions. It embodies a distinct corporate concept that has arisen in recent years: customer
creation. Here, the client is both the catalyst and the objective of all marketing activity.
Marketing is concerned with determining and satisfying personal and social needs. It is
defined as profitably addressing customer demands. Customer creation entails identifying
consumer wants and developing the firm to suit them. In other words, a business takes
deliberate and coordinated attempts to ascertain what the community's members need and
how it may best provide those requirements. It generates what the customer demands, in the
quantity required, at a price the consumer is willing to pay for the satisfaction delivered in the
form of goods and services, via channels that meet the consumer's need for goods and
services. Thus, the current philosophy of marketing is centred on the consumer and his or her
delight. As a result, it is referred regarded as a consumer-oriented idea. Satisfaction is
important to contemporary marketing. The pricing methods used, the promotional techniques
used, the design, shape, and size of the product, and the location of sales are all determined
after researching the customers' lifestyles, cultures, purchasing behaviours, and media
consumption habits, among other things.
Marketing brings together manufacturers and customers for mutual gain. Production is
pointless if the things created are not distributed to customers via an effective marketing
strategy. When we look around, we see marketing in the advertising that fill our television
sets. brighten our periodicals, fill our mailboxes, and provide life to our online sites. At home,
at school, at play, and at work. We encountered marketing in nearly everything we do. All of
this is facilitated by a vast network of people and activities vying for our attention and
dollars.
Marketing management analysis is the process of a company's marketing components being
decided, planned, and controlled in terms of the marketing idea, somewhere inside the
marketing system. Before delving into some of the process's finer points, some background
on two points will be useful.
The marketing notion is easy in theory, but putting it into practice is sometimes difficult, if
not impossible. The above-mentioned comment by Adam Smith is most congruent with it.
The idea is that if a corporation openly integrates the many components of its marketing
operations in order to suit the preferences of its consumers, it may more successfully fulfil its
own aims.
To someone who is inexperienced with corporate practice, the necessity for adopting the
notion and the ability to do so appear to be so self-evident that they don't need to be
discussed.

Within the marketing system, this marketing management process takes place "somewhere."
After seeing the marketing system shown, you realize that "somewhere" may be any of the
many, many enterprises that make it up—manufacturing, wholesaling, and retailing. Every
single one of them employs marketing management.

Assume, for simplicity's sake, that we're just interested in the manufacturing level in the
sense that the manager we're looking at works in a marketing management job there.
Situation analysis requires an examination of an organization's internal environment, or
microenvironment. The state of an organisation, whether it is a business or any other sort of
organisation.
The internal and external dynamics of an organisation are expressed in terms of its internal
and external dynamics. environmental variables When both forms of data are analysed, a
conclusion is reached. management can have a thorough grasp of the internal and external
surroundings the organization's overall situation When it comes to the external world, Factors
that exist outside of the organisation are depicted.The exterior circumstances, as well as the
interior environmental elements, depict the internal situation.the organization's circumstances
Internal environmental analysis can be beneficial.Managers determine an organization's
internal strengths and shortcomings. In terms of numerous internal environmental elements,
the organisation. Each factor in various sections of the organisation is investigated.
The hard truth of today's more competitive marketplace cannot be avoided. Every customer
that a company wants to recruit is a competitor. The company competes for the attention and
engagement of customers. It competes for their time and attention during the purchasing
process. It fights for consumers' willingness to cope with the technological complexity
inherent in many goods and the resulting demand for services, as well as the dollars they are
prepared to pay on a product or service. A terrific concept or a distinctive product are not
prerequisites for successful consumer marketing.
Consumers who desire or need the goods and have the financial means to purchase it are the
starting point for marketing. These customers, on the other hand, don't just buy a product;
they buy a market offering, which is a collection of values. A product, product services,
transaction services, brand, packaging, pricing, credit terms, price reductions, advertising,
personal sales help, shop or company location availability, inventory selection, and
transportation services are all part of that market offering. The key problem for the marketing
executive in building a successful competitive position in the European consumer
marketplace today is combining and matching these many parts of the market offering into an
adequately integrated and unified whole.
But, before any of this can happen, the company must compete for the attention of customers
and establish a recognisable comparative position in their thoughts that is consistent with
their cultural background.

1.2 Analysis of Market Situation

1.2.1 Market Analysis- An Overview

A market analysis is a quantitative and qualitative valuation of a market. The aim of market
analysis is to recognize the important characteristics of a market and to find out the market
structure at a certain point in time. Analyzing the market situation can help you to understand
your target audience and the conditions of the market.  This can help you to differentiate
yourself from the competition and be distinct you in a crowded market. A market analysis
provides information about other industries, customers, your competitors, and other market
variables.  Market situation analysis involves assessment of the situation and trends in a
specific market. If you are in the process of business planning and to launch a new product in
a market, you need to assess the situation in that market. The purpose of this is to help the
business determine the areas where marketing efforts are most needed, and to enable you to
make your business plans and implement them accordingly. Market Situation Analysis should
be based on cold, hard, verifiable facts.
The 'where are we now' situation analysis or audit is a method for a corporation to determine
its own strengths and weaknesses in relation to external opportunities and dangers. As a
result, it is a method of assisting management in choosing a position in that environment
based on existing facts.
A company's external environment encompasses a wide range of factors. The environment is
said to be divided into two parts: the macro-environment and the micro-environment. Social,
cultural, legal, economic, political, and technical elements make up the macroenvironment.
Strategic marketing planning is critical in order to design the most appropriate marketing
strategy to build and sustain Shloer in a continuously changing marketplace, taking into
account elements such as demography, green concerns, and bigger societal and
environmental challenges.
Both the company's internal environment (controllable factors affected by management) and
the external environment in which it works (uncontrollable variables management cannot
influence) must be investigated, as shown. The information gathered is then organised and
evaluated using the SWOT analysis, which matches the company's vulnerabilities and
strengths to the risks and opportunities it faces in the environment. As a result, the firm may
build on its strengths, mitigate any weaknesses, seize market opportunities as they emerge,
and avoid any threads as far as conceivable pressures are considered. Other environmental
restrictions, such as market structure, suppliers, consumers, market trends, public, and
competition, are included in the Micro-environment.
The internal environment, which includes an evaluation of the company's marketing mix
(product, price, site, promotion) and service mix (people, process management, physical
evidence), is also critical. Other criteria covered in an internal environment analysis include
sales, profitability, market share, and customer loyalty.
Internal auditing studies a company's own resources and makes recommendations on its
strengths and deficiencies. Internal factors are mostly under the control of the firm, and as a
result, organizations should make every effort to avoid any difficulties that may arise as a
result of them. Internal organizational competencies are clearly demonstrated to be important
in product creation and strategic formation.
After taking into account both internal strengths and weaknesses as well as external
environmental effects (opportunity and dangers), every organization is in a position to design
an efficient marketing plan. Failure to comprehend both external and internal capacities may
result in total failure.

The following dimensions are commonly used in market analysis:

1. Market size (actual and potential): The size of important submarkets; the prospective
market includes the use gap.
2. Market growth rate: The forces that drive sales, as well as growth rate projections. 3.
3. Profitability of the market: Existing rivals, supplier power, customer power,
replacement products, and potential entrants all influence the level of competition.
4. Cost structure: Examine the value added by the production stage and track how it
changes over time, as well as the impact of the learning curve.
5. System of distribution
6. Developments and trends
7. Critical success factors: What abilities and competences are required today and in the
future to compete?
 8. The market's competitive nature: the type of competition among current enterprises,
whether new entries or the availability of substitute products pose a danger, and how
influential consumer and supplier groupings are.

Fig: 1.2.1 Market Analysis

1.2.2 Purpose for analyzing the Market Situations:

Before enlarging a marketing strategy, it is important to conduct a market situation analysis

to determine the health of your business. This analysis serves as a helpful tool for
determining your business's strengths and weaknesses, and any opportunities and threats
(SWOT) which may affect its health. The results can be eye-opening in terms of what's truly
going on in your company and can aid in determining your company's market strategy. An
analysis can reveal where your company is in the present market, what is working, what can
be improved, and where possibilities to profit and develop exist. Develop a marketing plan,
find market gaps your company can fill, advance new technology, and respond to rival
changes using a scenario analysis. Adapt the report as needed to get the results you want.

1.2.3 The 5 Cs of Market Situation Analysis is as follows:

The following are the four primary factors to consider when assessing the current market
situation:

 Company – This is an examination of the business or company's internal workings,

such as its short- and long-term aims and objectives. It also looks at the company's
strengths and shortcomings, as well as its market share.
 Fig: 1.2.3 5 C’s of Marketing

 Consumer – Because this time the focus is on the customer, demographics such as
type, number, age, and so on will be examined. It will dig even further, considering
the value drivers that motivate customers to behave in a certain way. The
investigation will also examine into the decision-making processes of the participants
in the study.
 Competitor – Because competition is an important part of any firm, it is necessary to
incorporate it in the market condition study. The company's and its shares' market
positions will be compared to those of competitors in this examination. It will also
have to determine the competitors' strengths and shortcomings.
 Collaborators - In addition to the company and its competitors, there are a number of
additional parties who play an important, if indirect, role in the company's activities.
Other players such as distributors, suppliers, consultants, subsidiaries, and joint
ventures, to name a few, are among the collaborators.
 Climate - When assessing the climate, concentrate on external elements that may
have an impact on how you do business. Industry trends, societal trends, legal trends,
and new or developing technology will all be discussed.

1.2.4 SWOT Analysis:

 Fig: 1.2.4 SWOT Analysis

It also contains a business, i.e. its strengths, weaknesses, opportunities and the threats that it
faces.  

 Strength: Strength is referred to all the positive contributions to the favorable result
of an organization. These contributing aspects can be tangible or immaterial, but they
must be under the company's control. Human resources, capital resources,
infrastructure, brand recognition, and other factors should all be taken into account.
 Weaknesses: Weaknesses are defined as any internal elements that prohibit an
organization from attaining its goals. In other words, the factor which may jeopardize
the success of the company is a weakness. For example, employees can be the greatest
asset of company if they are skillful, well-trained, and motivated to their job. On other
side, workers without ample skills and motivation will be a big obstacle for the
company to reach the top position. Similar to strengths, there are some elements that
should be reviewed to find out weaknesses as early as possible.
 Opportunity: An opportunity is defined as an external factor that has a favorable
impact on or contributes to a company's success. For example, if you're an online
retailer, the rise of mobile devices is a boon to your business's ability to expand and
earn consumer recognition.
 Threat: Threats are external factors that exist as disadvantages, requiring
businesspeople to devise effective strategies for dealing with them or change their
plans to overcome these obstacles. For example, a rapid economic downturn may pose
a challenge for businesses, as they will have to work harder to get people to consume
their goods. Some hazards even cause businesspeople to abandon their plans to attain
certain objectives.

1.2.5 Advantages of conducting Market Analysis:

A marketing study can help you manage risk, spot developing trends, and forecast income.
You may utilize a marketing analysis at various stages of your business, and it's even a good
idea to do one once a year to stay on top of any important market changes. A thorough
market study is frequently included in a business plan since it helps you gain a better
understanding of your target audience and competitors, allowing you to develop a more
targeted marketing approach.

Other significant advantages of completing a market analysis include:

 Risk reduction: Knowing your market may help you decrease business risks since
you'll have a better awareness of important market trends, key industry players, and
what it takes to succeed, all of which will inform your business decisions.
 Targeted products or services: When you know exactly what your customers want
from you, you'll be in a far better position to serve them. You may utilize this
information to adjust your business's offerings to your consumers' demands once you
know who they are.
 Emerging trends: Being the first to discover a new opportunity or trend is a key part
of staying ahead in business, and employing a marketing analysis to remain on top of
industry trends is a wonderful way to position you to take advantage of this
knowledge.
 Market forecasts: A market prediction is an important part of most marketing
assessments since it predicts future numbers, attributes, and trends in your target
market. This provides you an estimate of how much money you'll make, allowing you
to change your company plan and budget accordingly.
 Benchmarks for evaluation: Outside of basic metrics, it can be tough to assess your
company's success. A market study gives standards against which you can assess your
firm and how well it is performing in comparison to the competition.
 Marketing analytics: Marketing analytics can provide context for prior blunders and
industry abnormalities in your company. In-depth analytics, for example, can explain
what factors influenced a product's sale or why a certain statistic performed the way it
did. Because you'll be able to examine and define what went wrong and why, you'll be
able to prevent repeating the same mistakes or encountering similar anomalies in the
future.
 Marketing optimization: An annual marketing study may help you with this because
it can guide your continuing marketing efforts and show you which elements of your
marketing require improvement and which are functioning well in comparison to
other companies in your sector.
 Marketing Environment: Successful marketers are those who can direct their
organizations through the unstable marketing environment, and do it better than
competitors. In marketing and strategic management, competitive analysis is an
evaluation of present and potential competitors' strengths and weaknesses.  To
identify opportunities and risks, this analysis gives both an offensive and defensive
strategic perspective.

1.2.6 Disadvantages of Market analysis

A marketing analysis examines the marketplace and determines where you might fit in. This
might assist your small firm in making strategic decisions. While a marketing study has
apparent benefits in terms of assisting you in identifying new customers and devising ways to
reach them, it also has drawbacks.

 Misinterpretation of Market Needs: Identifying the needs of each market segment

is one of the parts of your marketing analysis. Other firms and products that are
aiming to meet the demands of this market are also identified. There are two
drawbacks to doing so. You may overestimate your competition's ability to meet
customers' wants and give up before even attempting selling. You could potentially
misidentify the need being met. Don't forget to consider the distinctiveness of your
own product. Just because your competitors desire the same customer as you, doesn't
mean you're meeting the same demand.
 Assessing Market Growth in the Absence of Market Share: Your marketing
research will involve a look at how the entire market is growing, which can help you
gauge your options. However, if your analysis makes you feel discouraged, this can
be a negative. If you capture market share, you may compete successfully in a small
market. An examination of the market's size alone will not reveal your opportunities.
A slow-growing market can be compensated for by increasing market share.
 Target Markets vs. Market Segmentation: You must determine which market
categories contain potential buyers for your products or services. This will assist you
in comprehending the various tactics you may need to use in order to target various
types of customers. The disadvantage is that you can end up spreading yourself too
thin. Few companies can afford to market to each and every possible customer.
Choose a target market from among the available segments and go after it with a
laser-like focus.
 Improper Data Interpretation: The quality of a marketing analysis is determined by
the analyst. Market surveys can yield a lot of information, but effectively analyzing
that information is crucial. If you misread information and make decisions based on
that misconception, you will be at a severe disadvantage. Run your findings by a few
of reliable advisors. Make certain that your analysis isn't based on wishful thinking.
 Expensive to Conduct Research: One of the biggest factors that deter businesses
from conducting market research is the high costs involved. Knowing how much goes
into Market Research can be rather overwhelming for firms that are just getting
started. Unfortunately, it will be like taking a dull knife to a gunfight without Market
Research.

1.2.7 Internal Market situation analysis

 Merry down PLC was founded in 1946 as a cider maker in Heathford, East Sussex. In
the early 1990s, it purchased Shloer manufacturing and was the first firm to import
alcopops, in the shape of Two-Dogs, into the UK. Due to increased competition in the
 alcopops market, the firm lost £516,000 in pre-tax profits in 1997 and handed
distribution of Two Dogs to Scottish and Newcastle.
 In 1999, the company rebranded itself as Shloer, which boosted its soft drink market
performance. Sales grew in 2001 as a result of the company's current successful
strategy of increasing the size and frequency of existing customers' purchases while
also introducing new consumers to the brand through efficient marketing
communications.
 While the firm continues to make traditional ciders, it is hoping to profit from Shloer's
recent popularity. It explores possibilities that will boost growth for the long-term
benefit of shareholders by sticking to its original 40-year-old formula of natural fruit
juices and water.

Performance
Profitability and Sales
Merrydown PLC's overall financial performance has improved during the previous five years.
Table 1 indicates that between 2000 and 2001, the company's revenues climbed by 12% to
£17.63 million, while pre-tax profit increased by 41% to £1.05 million. Earnings per share
climbed by 86 percent to £2.92, with final dividends increasing to £0.75 in the company's
favour, while net cash increased to £2.80 million, enhancing liquidity. In addition, the firm
has a £3 million committed overdraft to cover all projected working capital needs and allow
room for future developments.
Increased Shloer sales, which surged by 47 percent to £8.5 million the previous year,
contributed significantly to the improved sales performance in 2001. Shloer is presently at the
maturity stage of its product life cycle, despite its rapid sales growth. The Product Life Cycle
(PLC) idea highlights four different periods in a product's sales history, known as
Introduction, Growth, Maturity, and Decline, and shows how profits grow and decline at each
step. The idea serves as a great tool for evaluating the brand's current and future orientation.
By determining where it is in its life cycle, relevant solutions for dealing with possible
dangers and opportunities in that stage may be identified (Brassington and Pettitt, 2001).
Shloer's product life cycle depicts how sales and profitability have evolved through time and
are likely to continue to do so in the future. Low sales growth and fragmented marketplaces
characterise the mature stage, as established rivals strive to obtain a competitive edge in
specific areas. Recent methods have mirrored those recommended at this level of the PLC.
Product modification tactics, such as expanding the selection of flavours, package design, and
size, have previously been used to relaunch Shloer in order to increase sales volumes. Market
modification techniques, such as promoting new and varied applications through recipes and
drinking situations, have effectively improved sales by drawing new customers to the brand
and motivating existing customers to buy more Shloer in the future.
Share of the Market
Shloer's market performance has improved over the previous three years, with a 1.5 percent
gain in its value share of the adult soft drinks market. Shloer is now being purchased by 7.7%
of all households, indicating that the brand has significant development potential.
Customer loyalty is important.
Over the previous three years, the firm has been able to increase Shloer's loyalty. In 2000,
independent research found a strong favourable response to the company's new branding, as
well as high levels of consumer recognition and satisfaction. Summer sales have also grown,
although they are still at their peak during the Christmas season.
Customer loyalty is divided into six categories, according to Wind (1982):
1. Existing customers who will continue to buy the brand.
2. Existing consumers who may switch brands or cut back on their use.
3. Occasional users who, given the correct incentives, may be convinced to expand their
usage.
4. Occasional users who may reduce their use as a result of competing products.
5. Non-users who could consider purchasing the brand if it is changed.
6. Non-users who have strong unfavourable sentiments about the product and are unlikely to
change their minds.
The bulk of Shloer's existing clients fit into groups 3 and 4 (occasional users). As a result,
competitors' comparable goods might erode their loyalty to Shloer, signalling that resources
should be put in a targeted marketing mix to convert them into heavy users.
Positioning
Shloer is marketed as a grown-up soft drink in the adult soft drink market, with a focus on
ladies over the age of 25. The Mc Kinsey Matrix may be used to illustrate its current market
position in order to analyse the current strategy based on its business strength in terms of key
performance indicators and market competitive dynamics.
Figure 3 shows a model that takes into account two dimensions: market attractiveness for
competitors (in terms of cash flow, market size, sales growth rate, competition, and so on)
and business strengths relative to competitors (in terms of company size, growth, marketing
capability, market share, customer loyalty, and so on). Three zones have been established,
each implying a distinct marketing strategy. When the firm's position and market
attractiveness are both good, the company should most likely spend and try to grow. Zone 3
has a more pessimistic outlook and suggests that either harvesting or divestiture techniques
be adopted. Zone 2 denotes that just a few investment decisions should be made if there are
special grounds for doing so (Aaker, 1998).
Shloer is roughly in Zone 1 and is represented by the letter X. Because of the industry's
maturity, the degree of market attractiveness is predicted to decline during the following three
years, as shown by the arrow. Indicating that resources should be directed to investing in the
near future for future growth.
Planning
The corporation is devoted to investing extensively in marketing operations and has a long-
term vision of Shloer's brand growth. In the year 2000, more staff were hired in marketing,
category management, and sales strategy, and production and brand management teams were
separated into distinct operating divisions to focus management resources on these major
operations. Furthermore, all marketing efforts are placed along the M25, a significant traffic
artery, to allow clients and agencies convenient access.
Marketing Combination

Product
Shloer is a beverage made from premium fruit juice (about 55%) and carbonated water, with
vitamin C and no artificial sweeteners or preservatives. In April 1999, it was relaunched. to
allow growth with a wider selection of flavours and more modern packaging within new
commercial channels It's now available in a 1-liter glass container as well as a single-serve
275ml glass bottle. red grape, white grape, raspberry & cranberry, white grape & peach,
white grape & peach, white grape & peach, white grape & peach, white grape & peach, white
grape & peach, white grape & peach, white grape white grape & elderflower, and grape &
apple A flask-shaped 330ml silver wrapped flask is also included. Shloer2gO was introduced
in 2000 and comes in three flavours: orange & lemon, apple, and grapefruit, as well as exotic
fruits, to appeal to impulsive purchasers. Since 1999, capital investment in plant and
equipment, as well as bottling operations, has kept systems running smoothly. up to date, and
high capacity and manufacturing standards were maintained. An honourable distinction
winning the Gold Award from the British Retail Consortium in 2000. Place Shloer is
distributed throughout the UK by SHS Sales and Marketing Ltd in supermarkets and off
licences. as well as pubs. Merrydown PLC has established a good working connection with
the firm. SHS invested in extra resources in the year 2000 to improve their administration and
representation.significant accounts on their behalf, in order to assist in the expansion of
distribution within the Irish Republic

 .Price Shloer demands a premium price in line with its present image, with prices
ranging from £2 to £3. a one-liter bottle However, robust competition precludes price
hikes from compensating promotional expenditures. Promotion Since 2000, support
for the brand has more than quadrupled, according to the present approach. A total of
£2 million was spent on advertising and marketing. In 2001, pull-strategies were
prioritised in order to illustrate Shloer's value to customers directly, with the help of a
 few well-targeted trade promotions. promotions. Shloer is marketed as "the adult soft
drink" that is "sparkling, refreshing, and more than a little bit fruity" in television and
print advertisements. The brand is marketed as being excellent for people who are
looking for a unique way to express themselves. Summer days are hazy and lethargic,
perfect for lounging in the garden with friends and as a self-indulgent adult
refreshment (www.shloer.com). Commercials aired on GMTV and Channel 4 starting
in November. 5, in combination with advertisements in Hello, the BBC Good Food
Guide, and Elle for women's magazines, In-store marketing, sampling, and PR events,
such as the Shloer garden at the Chelsea Flower Show, were also sponsored.

1.2.8 External Market situation analysis

Market Structure in the Micro Environment

The adult soft drink market accounts for 8% of overall soft drink volume and 7% of total soft
drink value.
It's further divided into clear & flavoured carbonates, flavoured waters, fruit drinks, herbal
drinks, RTD iced tea, and coffee sectors based on the kind of drink. Furthermore, clear and
flavoured carbonates are the most popular, accounting for 57 percent of the market (Mintel,
2002).
The following are some of the newer categories that have been identified:
Organic beverages are those that have been certified by a recognised authority, such as the
Soil Association, and have had their manufacturing, processing, packaging, and labelling
inspected on a regular basis.
Competition
3) Competitors in the Market – Other fizzy fruit-flavored drinks marketed at the adolescent
market, such as Tango, 7up, and Lilt, include lesser quantities of fruit concentrate and
sparkling mineral waters.

4) Implicit Competitors — Different drinks, such as hot beverages, alcoholic beverages, and
other carbonates such as Coca-Cola and Pepsi, compete for the same percentage of the adult
consumer's disposable money.
Figure 6 compares and contrasts the strengths and disadvantages of immediate competitors.
Shloer Doyle emphasises the need of studying direct rivals, also known as the strategic group,
because they all target the same market sectors and have comparable objectives. It's also
crucial to be aware of any unintentional competitors who may be selling items, since they
might represent a serious danger to the brand.
There are many competing items on the market, which may be divided into three categories.

four categories are depicted in the diagram

The model highlights five dynamics that influence a product's competitive position in the
market: (1) threat of new entrants, (2) buyer bargaining power, (3) supplier bargaining power,
(4) threat of replacement products, and (5) rivalry among current rivals.
Suppliers
Despite the large number of providers in the market, Britvic Soft Drinks Ltd leads supply,
having the largest share of both volume and value, as seen in Tables 4 and 5.
Furthermore, own-label merchants like Tesco, Sainsbury's, and Boots provide a major
percentage of the drinks.
Low in calories and sugar – Slowly increasing as customers choose healthier lives.
Tables 2 and 3 demonstrate that the adult soft drink market grew overall between 1999 and
2001, with all categories losing market share and sales to the clear carbonates sector, which
rose by 264 percent in volume and 236 percent in value.
Between 2001 and 2006, the market is expected to expand by 20% in real terms, reaching a
market value of £822 million in 2006, with volume sales expected to climb by 29%.

Market Structure in the Micro Environment

The adult soft drink market accounts for 8% of overall soft drink volume and 7% of total soft
drink value.
It's further divided into clear & flavoured carbonates, flavoured waters, fruit drinks, herbal
drinks, RTD iced tea, and coffee sectors based on the kind of drink. Furthermore, clear and
flavoured carbonates are the most popular, accounting for 57 percent of the market (Mintel,
2002).
The following are some of the newer categories that have been identified:
Organic beverages are those that have been certified by a recognised authority, such as the
Soil Association, and have had their manufacturing, processing, packaging, and labelling
inspected on a regular basis.
Competition
3) Competitors in the Market – Other fizzy fruit-flavored drinks marketed at the adolescent
market, such as Tango, 7up, and Lilt, include lesser quantities of fruit concentrate and
sparkling mineral waters.
4) Implicit Competitors — Different drinks, such as hot beverages, alcoholic beverages, and
other carbonates such as Coca-Cola and Pepsi, compete for the same percentage of the adult
consumer's disposable money.
Figure 6 compares and contrasts the strengths and disadvantages of immediate competitors.
Shloer Doyle emphasises the need of studying direct rivals, also known as the strategic group,
because they all target the same market sectors and have comparable objectives. It's also
crucial to be aware of any unintentional competitors who may be selling items, since they
might represent a serious danger to the brand.
There are many competing items on the market, which may be divided into three categories.

four categories are depicted in the diagram

The model highlights five dynamics that influence a product's competitive position in the
market: (1) threat of new entrants, (2) buyer bargaining power, (3) supplier bargaining power,
(4) threat of replacement products, and (5) rivalry among current rivals.
Suppliers
Despite the large number of providers in the market, Britvic Soft Drinks Ltd leads supply,
having the largest share of both volume and value, as seen in Tables 4 and 5.
Furthermore, own-label merchants like Tesco, Sainsbury's, and Boots provide a major
percentage of the drinks.
Low in calories and sugar – Slowly increasing as customers choose healthier lives.
Tables 2 and 3 demonstrate that the adult soft drink market grew overall between 1999 and
2001, with all categories losing market share and sales to the clear carbonates sector, which
rose by 264 percent in volume and 236 percent in value.
Between 2001 and 2006, the market is expected to expand by 20% in real terms, reaching a
market value of £822 million in 2006, with volume sales expected to climb by 29%.
Analysis can shed light on how your business is performing and assist you in making course
corrections if your plan is falling short of the mark. A situational analysis consists of the
following components:

The business
An examination of a company's vision, strategy, and objectives—and if they are being met—
is an excellent place to start. Examining the company's performance through the lens of sales,
market share, and customer retention provides a useful snapshot of whether the business is
meeting its objectives. Additionally, it can assist you in evaluating rivals and market share.
Commodities and services
Analyzing existing products or services, as well as anticipated new releases, is a critical
component of a scenario analysis. Market research is required to ascertain the viability of a
new product or service.

A market analysis done with potential consumers who provide comments or thoughts about
the product, service, or price can give insight on who the target market is and how a
company's products might be improved. Separately examine products and services to
determine which ones best satisfy your clients' demands and which ones require adjustment.

Distribution
Market study identifies a company's target demography and the level of demand for its
products or services. The competition analysis evaluates your firm in comparison to
comparable businesses. Both can provide valuable insight on your company's distribution
routes.

The distribution section of a scenario analysis examines how your products are distributed
and compares it to that of your rivals in order to discover the most effective distribution
methods for your firm.

Opportunities
Market possibilities exist when unmet or underserved demands exist. Understanding how to
get that market share is critical to a business's success. However, before a corporation can
effectively target an untapped market, it must first analyse its own strengths and flaws. A
strength, weakness, opportunity, and threat (SWOT) analysis is an effective method for
determining your business's capacity to capitalise on opportunities.

A SWOT analysis is a reasonably straightforward process that often results in a collection of

data.

Establish four categories: advantages, disadvantages, opportunities, and dangers.

Internally effective systems and processes, competitive advantages, and assets like as
technology, patents, knowledge, and cash should all be included in the strengths area.
Weaknesses are internal problems that limit your business's ability to compete more
effectively, such as recruiting shortages or a lack of money.
External variables such as regulatory changes, future news, and unique events can all benefit
your business.
Threats are external elements over which your business has no control.
In each category box, provide the pertinent information. Brainstorming is a wonderful
method for capturing ideas and information. Keep track of the ideas generated during the
brainstorming sessions in the appropriate boxes and develop an overall insight for each area.
Once completed, compile and summarise all of the insights.
When doing a SWOT analysis, the strengths and weaknesses of your firm are determined
internally, while the opportunities and threats are determined outside.
The SBA Score division provides a free SWOT analysis template.

Analyses of customers
Conducting extensive research is crucial to comprehending your clients. Collect demographic
information on your customers, their locations, their interests, and their issues. Once you
have a firm understanding of your customers, you can identify additional potential customers
as your target market and develop an effective marketing strategy. Knowing your clients
enables you to ascertain the requirements, tastes, and behaviours of your target market in
order to develop the most effective strategy for reaching them.

Competitors
Analyzing your primary rivals will assist you in determining how your firm stacks up.
Identifying and evaluating a company's competitive advantages might assist your
organisation in adapting to compete more successfully.

Conducting competitive research on their products or services, sales, and marketing methods
might assist you in adjusting your company's strategy to gain an advantage. Your competition
study should include information about a rival's market share, as well as its strengths and
flaws. The SBA maintains a database of business statistics that you may use into your
analysis.

Collaborators
Collaborations and partnerships are key components of many corporate processes. They
include raw material suppliers, business partners, and distributors who may handle your
organization's supply chain, production, and vendor connections.

Analyze collaborations to determine their strength and viability. Examining contracts and
determining if items and services have been supplied as promised in the past can provide
insight into a company's relationship's dependability.

Current business climate

A situational analysis should consider both the external and internal factors affecting a
business's success. External variables such as the economy, rivals, government laws, and
regulations all contribute to external factors. Internal elements affecting a firm include its
culture, its people, its resources, and its financial management.

A PESTLE study analyses a company's external environment by examining aspects such as

political, economic, social, technical, legal, and environmental. Examining each category
might reveal information about the broader business market. Examine each category of a
PESTLE analysis in further detail:

Factors political: the effect of government actions or elections

Economic factors: the impact of fiscal trends, present import-export ratios, and taxes on a
corporation.
Social determinants: the impact of consumer habits and demography
Technological variables: the influence of technology and innovation on a business
Legal considerations: the effect of safety standards and labour legislation
Environmental factors: the impact that environmental restrictions and climate change have on
a business
Example of a 5C scenario analysis
A situational analysis should take into account both internal and external elements affecting a
firm, and a 5C method may be the most straightforward. The five Cs are the firm, the
customer, the competition, the collaborator, and the climate.

The company component of a 5C analysis consists of the firm's vision and goals, as well as
its market position, distribution, opportunities, and goods. Consumers supply critical
information about present customers, the target market, and the prospects that a business
might pursue as part of its marketing strategy.

The rivals' section identifies a company's strengths and areas for improvement based on the
strengths and weaknesses of competitors. Collaborators are the relationships that enable the
creation and dissemination of products. Climate factors in aspects such as government policy
and the economy, as well as election projections for 2020.

Conducting periodic situational analyses can assist you in determining the status of your
business as it changes in order to ensure market success.

A scenario analysis serves a variety of functions.

An analysis may shed light on your business's position in the present market, on what is
working and what might be improved, as well as on chances to capitalise on and develop.

Utilize a scenario analysis to create a marketing strategy, uncover market gaps your business
can fill, promote new technologies, and adapt to rival developments. Adapt the report as
necessary to have a deeper understanding of your business's origins—and the path it should
go.
1.2.9 Other methods of Market situation analysis

In marketing, what is a scenario analysis?

A scenario analysis is a collection of tools used by marketing managers to examine a
company's internal and external environments in order to get a better understanding of the
organization's capabilities, customers, and business climate.Your marketing plan is vital, and
situational analysis plays a crucial role in it. Analyzing the marketing environment is the first
stage in developing a new strategy and marketing plan. This analysis will also incorporate a
SWOT analysis.

Additionally, situation analysis is undertaken on a regular basis following the implementation

of a plan to assess if any strategy revisions are necessary. Market definition and analysis,
market segmentation, and competition analysis are all included in the scenario evaluation.
I'll discuss how to create a situational analysis, the many sorts of situational analyses, and
how to construct a situational framework.Your situational analysis will become a component
of your marketing plan, since it will apply to many marketing circumstances. Your marketing
benchmark is the scenario analysis for the marketing plan.
The company's selection of individuals (or organisations) to target is based on the results of
the scenario analysis. The target market selection choice reveals the degree to which the
marketing program's positioning plan must be met.
Positioning is a marketing management term that refers to the combination of a product, a
distribution channel, a price, and a promotion plan. It is intended to differentiate the business
from its primary rivals while also addressing the demands of the target market. New product
strategies are critical to maintaining a steady supply of new goods to replace mature items
that are phased out. The strategy selection process takes into account the situational and
competitive aspects existing in the chosen product market.

Definition and Analysis of the Market

Correct market definitions are necessary for analysing buyers and competitors and
forecasting future trends.Your situational analysis should begin with market research.
Strategic analysis and planning are ineffective when referring to the market in broad strokes.
For instance, the Colorado market, the European market, or any other geographic area with a
varied population of individuals and businesses. A more precise definition of needs and
desires is required. For a market to exist, there must be individuals with specific needs and
desires for one or more items that can meet those needs and desires.
Additionally, market participants must be willing and able to pay for a product that meets
their requirements and desires. Thus, the idea of product-market simplifies the defining
process. A product market is defined as a single product (or series of related goods) that
satisfies your unique set of requirements and desires for all individuals or organisations
willing and able to acquire the product or service. The term "product" can apply to a tangible
good or an intangible service. This concept assigns a product category to individuals or
organisations that have a common set of requirements and desires.Naturally, depending on
the particular or broad nature of the requirements, the corresponding product category will be
similarly specialised or broad. Analyzing product markets and projecting future trends are
critical components of business and marketing strategy.
Strategic marketing decisions about entering new product markets, how to service current
product markets, and how to exit unappealing product markets are crucial. Marketing
professionals possess the necessary skills, expertise, and methodologies to (1) perform
product marketing analysis, (2) understand the strategic implications of the findings, and (3)
develop product market strategies. Market analysis entails the following activities:Identifying
and defining new product markets that present an opportunity for a business. Conducting an
analysis of current product marketplaces in order to establish strategic goals. Environmental
scanning and predicting of future trends and new product markets. Demand and supply
analysis is a critical component of product marketing analysis. Demand reflects the
purchasing power of the individuals and organisations who compose the market. Supply
refers to the extent to which the corporation supplying the market can meet the available
demand. You may think this is elementary economics, but you'd be amazed how many people
overlook this. A thorough examination of the buyer's demands and requirements is also an
integral aspect of the product marketing analysis process. These customer analysis activities
assist marketers in determining which consumers to approach and how to best satisfy their
demands. Your situational analysis reveals details you may have overlooked previously. As
the leader of Soricon's check reader product in Boulder, CO, I assisted in identifying a
significant gap in the single and multi-lane retail sectors. Retail managers, banks, and
clearinghouses desired to curtail and eventually eradicate check fraud. And thus was created
the check reader. The check reader enabled the POS attendant to scan the check, transferring
MICR data back to the bank to confirm adequate funds were available before completing the
sale. This prevented retail businesses from losing millions of dollars in fraudulent purchases.
Segmentation of the Market Market segmentation finds groups of customers with comparable
wants within a product market. Segmentation enables a company to better match its strengths
to the needs of one or more buyer groups.Your situational analysis reveals new information
about market segments. This may involve a strategy based on accounts. The primary concept
of segmentation is to explore distinctions and needs. Additionally, to identify two or more
categories within the target product market. Each target market consists of customers who
have comparable demands and desires for the product category in which marketers and senior
management are interested. Typically, the segments differ in terms of the buyer's attributes,
the reasons they purchase or use specific items, and their preferences for specific brands of
products. Similarly, segments of industrial product markets can be defined by the kind of
industry, the product's intended purpose, the frequency with which the product is purchased,
and a variety of other variables. A segment's features may differ significantly from the
average characteristics of the total product market. The similarity of people's requirements
within a market segment enables a marketing programme to be more effectively targeted.
Age, income, and lifestyle all influence how people shop for food, financial services, autos,
and other consumer goods. Analyze Your Competition and Your Situation Analyzing rival
tactics, strengths, weaknesses, and goals is a critical component of scenario analysis. It is
critical to identify both current and prospective rivals. Typically, a subset of the industry's
firms constitute the strategic group of a company's primary competitors. The analysis should
highlight the analysis's most significant strengths and limitations. Often, the enterprises that
comprise an industry exhibit great variety. This is demonstrated in Exhibit 1 by the
competing enterprises in the computer service industry in the United States.
The companies exhibit significant variances in terms of their level of connection with clients
and the degree to which their services are customised. Each quadrant of the map depicts
businesses that have common qualities.

1.2.10 Design of Market situation analysis

Market Segmentation and Positioning

Marketing advantage is impacted by contextual elements such as industry characteristics,

firm type, degree of difference, and buyer wants, as well as the company's unique competitive
advantages. The critical problem is determining how to compete in light of the circumstances
around a business. For instance, the marketing strategy of a market leader in a developing
sector is very different from that of a small business operating in a mature industry.
Positioning is determined by the following factors:

The factors or rewards that a buyer considers while making a purchase, as well as their
relative importance.
The degree to which and the manner in which a business is distinct from its competitors.
The constraints of competing items in terms of critical customer needs and desires.
The positioning statement serves as a springboard for developing a strategy. Positioning
reflects how the organisation wishes to be viewed by the target market and its consumers.
Positioning is defined in terms of a reference point, most frequently competition.

The formulation of a plan should begin with a product strategy and then go on to distribution,
pricing, and promotion strategies. Notably, the strategy components form a symbiotic
network of acts that complement and reinforce one another.

The selection of an effective marketing programme plan is hampered by the vast array of
possibilities available to management. Nonetheless, there is frequently a clear logic to how
the components of a marketing campaign should fit together in a specific context.
Product, distribution channel, pricing, advertising, and personal selling decisions must all
contribute to the development of an unified marketing campaign aimed at addressing the
requirements and desires of customers in the company's target market.

Creating a digital marketing campaign integrates the company's marketing skills into a
bundle of activities aimed at positioning the business against its competitors in order to
compete for the clients that comprise its target market.

Marketing management must determine the function and scope of each marketing programme
activity.

These decisions establish the overall amount to be spent on the marketing programme
throughout the planning period, as well as the allocation of resources among the different
programme activities, such as content marketing, SEO, advertising, and direct selling.

Market Strategy and Analyses of Your Situation

The target market strategy identifies the individuals (or organisations) inside the product
market that management desires to serve.
When buyer requirements and desires differ, the market target is frequently a sector of the
product market. Marketing managers must determine whether to target many segments. After
identifying a company's product markets and assessing their relative value to the business,
management must decide on a targeting strategy.
The marketing strategy's focus point is the market segmentation decision; segmentation
serves as the foundation for defining objectives and constructing a positioning strategy. The
target market approach alternatives include focusing on all or the majority of the categories.
The choice to target is based on a revenue cost analysis and an evaluation of the competitive
landscape.

The following information is required for each market target:

The target market's size and growth rate.

Users in the target group are described.
The profile or persona of the consumer.
End-user information will aid in the selection of a positioning strategy.
Short-term marketing strategy guidelines.

Positioning Strategy for Marketing Programs

The positioning strategy of a marketing programme is comprised of the product, the channel
of distribution, the price, and promotion strategies. These are chosen by management to
strengthen the company's position against important rivals while also addressing the demands
and desires of the target market. Your situational analysis should assist you in matching your
messaging to your ideal consumer profile. This technique is sometimes referred to as the
marketing mix or marketing programme. This positioning strategy establishes a unifying
notion for the function and strategy of each component of the marketing mix. The positioning
statement expresses the marketing management's desired perception of the company's
marketing mix by the target market. The first stage in designing a positioning strategy is
determining what objectives each target market should have. Marketing objectives are
developed at several levels within the organisation. Corporate objectives define the
company's overall performance goals (e.g., growth, profit, employee development, and other
broad objectives).
Each target market has its own set of objectives. Objectives are arranged in a hierarchy,
ranging from extremely broad corporate goals to the precise goals of a sales representative.
I've provided several marketing objective examples.

Choosing a Marketing Strategy

The marketing strategy chosen is influenced by the business's status and competitive
environment. Selecting a strategy is facilitated by determining the sort of plan that is
appropriate for the scenario in which a given business finds itself. For instance, a business
creating a plan for entering a new market might benefit from an examination of the strategic
concerns and criteria for new market entrance. Other instances include product lifecycle
strategies, fragmented market strategies, global strategies, and enterprise company strategies.
Analyzing distinct strategic scenarios enables the development of strategic design procedures
that place a premium on the critical strategic variables confronting a business. By evaluating
the many elements impacting strategy selection and developing action recommendations for
viable strategies, management develops strategy selection abilities. Significant strategy
selection criteria (for example, implementation difficulty) can be evaluated to aid in the
strategy selection process.

1.3 ANALYSIS OF COMPETITOR STRATEGIES

Overview

In today's highly competitive market, it is no longer sufficient for a business to understand its
consumers. Businesses must keep a careful eye on their rivals. They must regularly
benchmark their goods, pricing, distribution methods, and promotional activities against
those of their direct competitors in order to find areas of competitive advantage and
disadvantage.
Firms must be proactive and identify both present and future rivals, collect information, and
maintain a market intelligence system to track competitor activity and market trends. Often
referred to as "Competitor Myopia," ignoring or underestimating the threat posed by future
rivals in favour of current competitors. Theodore Levitt invented this word to describe
circumstances in which corporations fail to understand the full breadth of their operations.
Competitor Myopia has the potential to force businesses out of business!
Firms must do constant competitor analysis in order to develop successful competitive
strategies.
2. Defined Competitor Analysis
Competitor analysis offers a strategic context for recognising possibilities and risks on both
an offensive and defensive level. The offensive strategy framework enables organisations to
capitalise on opportunities and leverage strengths more rapidly. On the other hand, the
defensive strategy framework enables them to respond more effectively to the danger posed
by competing enterprises looking to exploit the firm's own shortcomings.
Firms do competitor analysis to determine who their important rivals are, create profiles for
each of them, ascertain their aims and tactics, evaluate their strengths and weaknesses,
estimate the danger they offer, and forecast their response to competitive actions. Businesses
that establish a systematic and sophisticated approach to competitor profiling gain a major
competitive edge.
3. Recognize Existing and Prospective Competitors
Firms must employ both an industry and a market strategy when identifying their existing and
prospective rivals. The industry approach will provide insight into the industry's structure and
product offerings from all market participants. On the other side, the market strategy focuses
on the consumer demand and the businesses that are striving to meet those requirements,
providing the firm with a broader picture of existing and future rivals.
Potential competitors include (but are not limited to) firms that compete in a related product
category, use related technologies, already target the same market with unrelated products,
operate in other geographic regions with similar products, and, finally, new start-ups
organised by former company employees and/or managers of existing firms. Firms that have
a common target market and strategy form a strategic group and are the closest competitors
of firms seeking to join that group.
Analysis of the Industry
An "industry" is described as a collection of businesses whose products and services are
highly interchangeable. Industries are categorised mostly on the basis of the number of
vendors and the degree of product differentiation. Additionally, the following elements
contribute to the structure of an industry: entry/exit barriers, cost structure, degree of vertical
integration, and level of globalisation. Industries are frequently categorised as monopolies,
oligopolies, differentiated oligopolies, monopolistic competition, or pure competition based
on the number of sellers and product difference.
Each category is detailed in further detail below.
Monopoly occurs when a single corporation delivers a certain product/service in a particular
country or region. The distribution of electrical electricity to residential and business clients
is a frequent example. Given the absence of alternatives for clients, an unfettered monopoly
striving to maximise profits has a proven motive to charge a higher price, conduct little or no
promotion, and provide rudimentary service. On the other hand, a controlled monopoly is
compelled to charge lower rates and provide additional services in the public interest.
Monopolists may be prepared to invest in service and technology if partial alternatives for
their products or services are available or if impending competition is near. Electric power
generation and distribution are excellent examples of this behaviour, particularly in light of
recent discoveries in alternative energy sources and technical advancements in the utilisation
of electric power.
In the gasoline sector, oligopoly is defined by a small number of enterprises manufacturing
essentially the same product, such as Mobil, Shell, and Sunoco. Any single firm will struggle
to sell gasoline goods over the market rate unless it can distinguish its product range in some
way.
Distinct oligopoly refers to an industry in which a few businesses make goods that are only
somewhat differentiated, such as Sony, Canon, and Nikon in the digital camera sector.
Differentiation is accomplished by the use of distinct product characteristics such as quality,
unique features, style, or services. Typically, rivals will want to be the market leader for a
certain feature, therefore attracting clients who value that attribute and charging a premium
for it.
Monopolistic competition exists when many competing enterprises in a sector are able to
distinguish their offerings entirely or partially. This is the case with grocery chains such as
Wegmans, Tops, and Price Chopper in Upstate New York. In this context, companies often
target market sectors where they can provide a superior level of service to the consumer and
hence fetch a higher price. Pure competition occurs in industries when a large number of
enterprises offer the same product/service. Because there is no distinction between offers,
prices are fixed for all enterprises, as is the case with the majority of agricultural commodities
(e.g. wheat, cabbage, and onions). There is no value to advertising, and the seller's earnings
will be affected solely to the degree that they can reduce manufacturing or distribution
expenses.
Analysis of the Market
From a market viewpoint, rather of focusing just on firms who make the same product, a firm
searches for rivals among those that meet the same consumer demand. To prevent slipping
into Marketing Myopia, and to encompass all present and future rivals, this requirement must
be stated widely.
For instance, in the coffee market, a corporation like Nestle needs evaluate direct competitors
such as Maxwell House and Taster's Choice, as well as indirect competitors. This includes
any firm that sells coffee machines in direct competition with Nespresso, such as Keurig and
Mister Coffee.
Current and future rivals are many. Companies may experience brand rivalry, industry
competition, form competition, or generic competition depending on the degree of product
replacement.
• Brand Competition: the firm evaluates other businesses that offer a comparable
product/service to the same clients at comparable rates. Coca Cola, for instance, would view
Pepsi Cola as its primary competition.
• Industry Competition: the business takes a broader view and considers all enterprises that
manufacture the same product or class of products to be rivals. Coca Cola, for instance,
would see all other soda makers as rivals.
• Product Competition: the firm takes a broader view and views rivals as businesses that
manufacture items that provide the same service. For instance, Coca Cola would see all other
makers of carbonated beverages as rivals.
• Generic Competition: the corporation might take an even broader view of its competitors,
viewing them as firms competing for the same consumer money. Coca Cola, for example,
would view all other beverage manufacturers as rivals.
A)Competitive Strategy Development
Firms can be categorised into four types of positions in an industry: market leader, market
challenger, market follower, or market nicher. By defining its own role and that of its
competitors, a business may get further insights into them and develop more successful
competitive tactics.

1. Market Dominant

It is normal in many sectors for one business to have a disproportionately large market share.
This company leads the market in terms of pricing, new product releases, distribution reach,
and promotional spending. Typically, competitors oppose, mimic, or avoid the leader. Procter
& Gamble, Coca Cola, and McDonald's are all examples of market leaders.
Leaders seek to maintain their position as the market leader in their sector. Their general
strategy is to seek to increase overall market share, defend existing market share, or grow
market share.

2.Market expansion

Market leaders often benefit the most from market expansion. The primary techniques
utilised to increase the market include acquiring new users, discovering new applications for
their product, and/or persuading existing consumers to use their product more frequently.
• To attract new users, a business might target consumers who are unfamiliar with the product
or are hesitant to purchase it due to its price or absence of key features. Johnson & Johnson
expanded the market for its infant shampoo by advertising to other family members.
• To discover new applications, a business may leverage its research and development
resources, new technology, or input from consumers who use the product in novel ways. For
instance, DuPont's nylon was initially used in parachutes, then as a fibre in the manufacture
of women's stockings, subsequently as a major component of garments, and most recently in
the manufacture of tyres and other automotive components.
• To encourage current consumers to purchase more of a product, a business creates ways to
persuade them to purchase the product on additional occasions and in higher quantities each
time.
For instance, Procter & Gamble says in its Head & Shoulders shampoo advertisements that
the shampoo is more effective when applied twice every shampoo occasion.
3.Defending Market Share The greatest method for a leader to defend its market share is to
consistently improve its goods, customer service, distribution system, and cost structure (e.g.
Coke vs. Pepsi, Gillete vs. Bic, McDonalds vs. Burger King, General Motors vs. Ford)   
4.Market Share Expansion
In many circumstances, a single market share point is worth hundreds of thousands of dollars,
which means that leaders may greatly boost their profitability by growing their market share.
However, the impact of increased market share on profitability is strategy-dependent, since
the additional cost of acquiring the greater market share may surpass the additional income.
Additionally, some market leaders must exercise caution in order to avoid inciting antitrust
charges, investing more money than their increased market share is worth, or adopting the
incorrect marketing methods.

To plan productive competitive marketing strategies, the company needs to find out about its
competitors. It must compare its products, prices, channels, and promotions against those of
close competitors on a regular basis. The company will be able to identify areas of possible
competitive advantage and disadvantage in this manner. It will be able to launch more
effective marketing campaigns against competitors and will be able to create stronger
defenses against their actions.

"Who are our true competitors?"

Is a tour operator in direct competition with a male outfitter? Is a business school in direct
competition with an insurance firm? Perhaps the answer is yes, if all of them are competing
for a piece of the consumer's wallet.
WHO ARE THE COMPETITORS?
1. WHO DO WE GENERALLY COMPETE WITH?
2. WHO ARE OUR MOST FEROCIOUS RIVALS?
3. WHO IS THE MANUFACTURER OF THE ALTERNATIVE GOODS?
4. WHO MIGHT BE INTERESTED IN COMPETING?
5. IS THERE ANYTHING THAT CAN BE DONE TO DETER THEM?

TAKING A LOOK AT THE COMPETITORS?

1. WHAT ARE THEIR GOALS AND PLANS FOR THE FUTURE?
2. WHAT ARE THE IMPEDIMENTS TO ADMISSION AND EXIT?
3. WHAT IS THEIR PRICING STRATEGY?
4. DO THEY OFFER A COST BENEFIT OR A COST DISADVANTAGE?
5. WHAT ARE THEIR ADVANTAGES AND DISADVANTAGES?
6. WHAT ARE THEIR STRENGTHS AND ABILITIES?

1.3.1 Understanding the Competitors

To have a better knowledge of your competition, look at them from many perspectives, such
as their size, growth, and profitability, their image and positioning plan, and their level of
commitment. By evaluating data relating to main consumer motivation, significant cost
components, mobility constraints, and value chain, it is useful to consider the characteristics
of successful and unsuccessful firms. Market research and a range of other sources, such as
trade journals, trade sources, consumers, and suppliers, can provide information about
competitors.
 Fig: 1.3.1 Steps in Analyzing Competitors

1.3.2 IMPORTANCE OF ANALYZING COMPETITOR

STRATEGIES:

It is necessary to take routine competitor analyses throughout the lifecycle of your business to
stay updated with market trends and product offerings. A competitor analysis can reveal
relevant information about market saturation, business opportunities and industry best
practices. It's also crucial to understand how your customers see you in relation to your
competitors. A competition study can help you understand what services are currently
accessible to your target client and which are being overlooked. Both offence and defense
benefit from competitor analysis. When you compare your company to its competitors, you
can see where you can improve as well as where you thrive. It may even assist you in
identifying a new niche in which you may capitalize.
1.3.3 There are three different kinds of competitors:
 Direct competitors include: A direct rival provides the same products and services to
the same target market and customer base, with the same profit and market share
growth objectives. This suggests that your direct competitors are aiming for the same
audience as you, selling similar products, and using a similar distribution model."
 Indirect competitors: "An indirect competitor is a corporation that provides similar
products and services to direct competitors, but with distinct ultimate goals."
 Substitute competitors: "Another company that provides your customers with a
product or service that you also give. It's essential to understand how you stand out
once you've decided on the type of competition you want to be compared against. 
 Fig: 1.3.2 Competitor Analysis

1.3.4 Elements of Competitors analysis:

Every competitor analysis should include the following ten elements:

 Feature matrix: Find all the features that each direct competitor's product or service
possesses in a feature matrix. Keep this in a competitive intelligence spreadsheet to
visualize how companies compare up against one another.
 Market share percentage: It can help you figure out who your key market
competitors are. Don't exclude larger competitors totally, as they have much to teach
about how to win in your field. Instead, use the 80/20 rule: target 80 percent direct
competitors (businesses with similar market shares) and 20% top competitors.
 Pricing: Calculate how much your competitors are charging and where they lie on the
quantity vs. quality scale.
 Marketing: What kind of marketing approach is used by each of your competitors?
Examine your competitors' websites, social media presence, event sponsorships, SEO
techniques, taglines, and current marketing initiatives.
 Differentiators: What sets you apart from your competitors, and what do they tout as
their greatest qualities?
 Strengths: Figure out what your competitors do well and what works for them. Do
the reviews suggest they have a better product? Do they have a lot of people aware of
their brand?
 Weaknesses: Determine what each rival could improve on. Do they have a social
media plan that isn't working? Is it true that they don't have an online store? Is their
site up to date? This knowledge can help you get a competitive advantage.
  Geography: Examine your competitors' locations as well as the territories they serve.
Is this a brick-and-mortar company, or does the majority of their business take place
online?
 Culture: Examine the objectives, employee happiness, and corporate culture of your
competition. Are they the type of company that proclaims its founding year, or are
they modern start-ups? Read employee reviews to learn more about the company's
culture.
 Customer reviews: Examine the customer reviews of your competition, noting both
the positive and negative aspects. Look for 5-star, 3-star, and 1-star reviews in a 5-star
system. Three-star evaluations are frequently the most truthful.

1.4 ESTIMATING COMPETITOR’S REACTION PATTERN AND COMPETITIVE

POSITION.

Any executive will tell you that understanding how rivals will react to your activities is
crucial when making strategic decisions. However, if you ask that same individual how
seriously her firm takes rival reaction, she is likely to roll her eyes. According to a recent
McKinsey & Company poll, two-thirds of strategic planners strongly believe that
organisations should factor anticipated rival reactions into strategic choices. Yet, according to
a poll performed by David B. Montgomery, Marian Chapman Moore, and Joel E. Urbany
(published in 2005 in Marketing Science), less than one in ten managers recalled doing so in
the past and less than one in five anticipated to do so in the future.

This divergence occurs because game theory, the sole formal framework for analysing rivals'
conduct, frequently becomes unmanageable in practise. To begin, most game theory models
presuppose that all participants adhere to fundamental game theory principles—a
presumption that is plainly wrong. Additionally, game theory models become complex when
a competitor has a large number of alternatives, when the strategy is uncertain about the
metrics his adversary will use to assess them, or when there are numerous adversaries, each
of whom may behave differently. However, when strategists rely on ad hoc predictions or
war-gaming exercises, the analysis can devolve into near-complete arbitrariness. The amount
of qualitative factors that enter the prediction process—personal biases and hidden agendas,
for example—risks undermining the conclusions and increasing the likelihood that top
management would reject counterintuitive findings.

Our Investigations
The conclusions in this paper are based on our expertise assisting customers with competitive
forecasting...
Over the last few years, as the leader of McKinsey's efforts to model competitive behaviour,
we've worked with a variety of organisations to forecast the potential reactions to their
strategic initiatives. Through that study, as well as a 2008 poll of top executives, we built a
practical technique to anticipating competitive behaviour that adheres to the theoretical rigour
and precision of game theory while being as easy to deploy as the majority of other methods.
(For additional information on the survey we utilised, see the sidebar "Our Research.") Our
technique entails condensing all conceivable evaluations of a rival's reaction to a certain
strategic move into a sequential examination of three issues:

Is the rival likely to respond at all?

What alternatives will the competitor examine actively?
Which option is most likely to be chosen by the competitor?
Two facts enable this streamlined method. To begin, if your adversary employs primitive
analytical procedures—as our survey indicates is the case for the majority of businesses—you
may utilise such approaches to forecast his response. Second, our research discovered that the
majority of large corporations follow a predictable pattern when reacting to a competitor's
move.

The payoffs associated with adopting the method we recommend can be substantial—
especially when contrasted to the expense of generating no forecasts at all. We assisted the
major participant in a transaction-processing business in seeing that reorienting its strategy in
a new direction would almost certainly elicit a positive, rather than destructive, response from
its main competitor. The firm adopted the approach, the competition reacted as expected, and
the outcome was a complete reversal of the industry's fortunes. We also stood by while a
telecom business failed to comprehend its competitors and hence overpaid for a new telecom
license—a mistake that cost the company $1 billion and contributed to its bankruptcy within
a few years.
In this post, we will investigate each of the three questions above and expose several
conventions, biases, and patterns that businesses use while analysing their competitors. Please
keep in mind that the data presented in this article represent averages across sectors, regions,
firm sizes, and competitive environments—all of which can have a substantial impact on
these trends. (In genuine client scenarios, we apply client-specific inclinations.) If you have
particular knowledge on how your market segment has behaved or, even better, how an
enemy makes decisions in general, you should use it in place of our averages. However, as
you will see, understanding the tendencies of all companies simplifies the process without
sacrificing accuracy unnecessarily.
Is There Any Reaction from the Competitor?
Even businesses that do competitive analysis frequently overlook the possibility that a rival
would opt not to respond to a strategic move. By excluding that alternative, the strategist
reduces the expected value of his company's move: the greater the perceived chance of
competition counteraction, the smaller the expected return. Additionally, with a lower
expected return on investment, the company is less likely to take bold action.

Is the Competitor Going to React?

The first step in analysing a competitor's response is to consider the possibility of no
response. To ascertain this, you must...

Why are otherwise conscientious strategists omitting this step? To begin, all managers—
including, somewhat ironically, those who avoid competitive analysis entirely—are schooled
in stories about companies that failed because they ignored their competitors, and they are
fearful that by assuming no reaction, they will become a protagonist in one of those
narratives. They fear that if they consciously forecast no reaction and the competition does,
they will appear even worse. They err on the side of presuming a response to avoid
undesirable eventualities. Second, personnel must portray the rival in firms that conduct war-
gaming exercises. These individuals frequently believe they would appear more intelligent
and involved if they forecast a clever move or countermove by the competition rather than
just reporting to the group, "We've considered it, and we don't believe we should do
anything." Consider how a day-long session on wargaming would begin in this manner. The
organisers are likely to disregard the original conclusion and continue the move-countermove
practise.

Thus, the first step in studying competitor reaction is to consider the possibility of no
reaction. This may be determined by asking four subquestions. If you respond no to any of
these, your odds of receiving a response are slim.

1. Is your adversary aware of your actions?

Even if an action seems self-evident to you, your adversary may miss it for one of two
reasons. To begin, the majority of businesses rely on imprecise data to gauge market trends.
For instance, in China, the majority of significant consumer goods businesses collect data on
rival volumes in only 30 main cities that account for around half of the market. As a result,
they are unable to identify new items aimed for smaller cities. In the United States, a large
consumer products firm recently missed substantial market share gains by a rival because the
market-tracking service it (and other comparable companies) utilised did not include dollar
shops, which accounted for 20% of the market for this type of commodity. Second, if your
new product affects many business units of your rival, it may not register as substantial to any
one unit and hence be disregarded. On average, just 23% of respondents in our poll knew
about a competitor's innovation in time to reply before it reached the market (while we
questioned respondents about product or service innovations generically, we will refer to
these specific replies as "new product"). Only 12% of respondents learnt about a competitor's
pricing shift in time to formulate a preemptive reaction. (In our research, we surveyed one
group on their reactions to an innovation and another regarding their reactions to pricing
changes.) Additionally, you may increase your chances of evading discovery by exploiting
your opponents' blind spots, which will become apparent as you analyse the next three
subquestions.
Only 23% of the CEOs we polled were aware of a competitor's new service in time to reply
before it launched.

2. Will the competitor perceive you as a threat?

Even if your rival observes your activities, he may not see a threat—and hence may not
believe that mounting a reaction is worth the effort and disruption. The majority of
corporations evaluate performance purely in relation to their yearly budgets. If the budget's
financial objectives can still be accomplished despite your planned action, management will
perceive the firm as "on track" and secure. Thus, assessing whether your enemy would
answer is critical to predicting if he will respond, and is frequently easier to determine than
you might imagine. Certain businesses disclose their objectives by product line. Numerous
businesses publish earnings objectives. For public corporations that do not publish their
objectives publicly, the earnings forecasts of securities analysts—which many companies use
as targets—can be substituted. If no such data is available, just calculate the prior year's
volume growth rate and presume the firm would aim for a comparable pace this year. Once
you've established your competitor's anticipated objectives, you may evaluate industry sales
statistics to see whether the firm is on track. When you factor in the likely consequences of
your activity, you may make an early estimate regarding the company's future viability.
3. Is mounting a reaction going to be a top priority?
Before you make a move, your enemy already has a comprehensive agenda. It includes
product launches, marketing campaigns, reorganisations, large acquisitions, plant openings,
and cost-cutting initiatives—all of which must be scaled down in order to respond to your
relocation. As a result, if your adversary has already committed to plans that will consume all
of his attention, he will be averse to shifting priorities. By determining the perceived "cost" to
your opponent of abandoning his planned endeavours, you may determine if he will choose to
ignore you. Additionally, keep in mind that some of the business unit's goals will have been
determined by its corporate parent. For instance, assume the parent company of a unit faces
earnings pressure from Wall Street. If the unit's instructions are to create present revenue, its
management may remain silent (or may pick an insufficient response) despite feeling fairly
threatened—especially if a forceful reply would be more costly in the short term than
ignoring your conduct.
4. Is your adversary capable of overcoming organisational inertia?
Even if senior management desires to respond, the company as a whole may be resistant.
Numerous variables might exacerbate this obstacle. To begin, if responding involves
significant organisational changes, it is highly unlikely that the corporation will do so until
the threat is immediate and lethal. We once advised a telecom customer that, within three
years, it will confront competition from new entrants. To prepare, the customer required a
new planning methodology, the development and implementation of which would take the
whole three years. Because the threat had little effect on present performance — despite
management's acknowledgement — the corporation lacked the drive to make more than
minor adjustments. As a result, it ultimately lost almost 30% of its market share.
Second, managers are often hesitant to forsake their success formula, and when they do, they
are notoriously inept at changing it. Employees adhere to thousands of processes designed to
bolster the formula. These are tenacious.

Third, businesses often struggle to construct a response that entails the participation of third
parties who may not share their urgency. In the late 1980s, a small pizza delivery chain in the
United States called Papa John's noticed a shift in consumers' perceptions of the quality of
Pizza Hut and Domino's (the top two chains) and capitalised on the opportunity by
developing a differentiated value proposition dubbed "Better ingredients. Better pizza."
Throughout the 1990s, Papa John's developed swiftly and surpassed the two larger
competitors to become the third biggest pizza company in the US. Incapable of mobilising
their franchisees around quality until the danger became clear, the large chains waited until
2000 to respond with their own improved pizzas.

Even if they were aware of a competitor's strategic action, 17% of our survey respondents
indicated that they did not respond to it.

While all rivals will notice a significant shift, our experience indicates that organisations
overestimate the chance of a medium to minor action being observed by 20% to 30%.
Additionally, 17% of our survey respondents indicated that they made no reaction even
though they were aware. This is surprising, given that respondents were recalling just those
instances in which their organisation identified a danger and rated the action as a "major"
move with the "potential to considerably influence your assessment of your competitive
position in your market category." Thus, the chance of receiving no answer in an average
real-world circumstance may be significantly greater. Taking all of these considerations into
account, it is plausible to expect that businesses do not respond to their competitors' activities
at least one-third of the time—certainly enough to merit an explicit effort on your part to
ascertain if your competitor will. Additionally, merely determining if a competition would
reply simplifies the entire process. If you believe the firm will not react, you can proceed
directly to the next stage.

What Alternatives Will the Competitor Consider Actively?

According to classical game theory, the next stage would be to provide a comprehensive list
of all possible possibilities for your competition to examine, assuming it would research each
one before picking one. However, this very assumption undermines businesses' confidence in
their capacity to forecast, leading them to forego analysis. In comparison, our experience with
customers and the survey findings reveal that, while rivals may discuss a variety of answer
choices, they genuinely consider only a few. Daily duties that keep some rivals from replying
at all may also hinder them from dedicating time to thoroughly analyse all alternatives.

When we analysed the number of choices considered by businesses seeking replies to a

competitor's new product launch or price adjustment, we discovered that the vast majority
explore less than four. The median number of actively explored choices was nearly identical
to two or three. The distribution was likewise tight: about 75% of respondents examined two
or three; 10% or less examined five or more. Due to the fact that you cannot predict which
possibilities your adversary will evaluate, you must analyse more thoroughly than he does.
Having said that, the number can be limited, since you can anticipate which possibilities he
will evaluate. Both the innovation and pricing groups in our study identified "the single most
apparent counteraction" as the most often examined alternative (in these situations, that
would be introducing a me-too product or matching a price change). In all situations, almost
55% of participants said that they considered the most obvious response, and more than one-
third of those who evaluated only one response chose that choice. As a result, there is a
significant possibility that a rival is evaluating the most apparent reaction carefully.

However, there were notable distinctions between the various possibilities evaluated in the
context of a new product and those considered in the context of price. 43% of price managers
examined what their business unit did the last time it encountered a comparable circumstance,
compared to only 26% of innovation managers. 25% of innovation managers indicated that
they were likely to consider recent activities by other business divisions inside the
organisation, compared to 16% of price managers. In all categories, around 30% of managers
sought guidance from board members and external experts. The second-least probable choice
(20 percent for both groups) was to examine the business unit's past experiences, and the least
likely option (19 percent for both groups) was to consider the executive in charge's prior
experience. The basic line is that you don't have to go back very far to determine which
possibilities your competitors will consider.

Which Option Is Most Likely to Be Chosen by the Competitor?

As a result of the preceding process, you should have compiled a brief list of potential
possibilities that your enemy is likely to explore. Now it's up to you to zero in on the one he'll
select. This prognosis creates the most worry for many strategists. It is not necessary. Bear in
mind that the alternative to making this prediction—avoiding predictions—is far worse, so
the effort does not have to be 100 percent right all of the time to be worthwhile.

Classical game theory (as most strategists are familiar with) takes a convoluted path to that
prediction: It states that a competitor will choose the option that maximises his net present
value after accounting for all sequential moves and countermoves made by all competitors
(each of whom typically has complete knowledge of the others' motives, economics, and
options) until a new equilibrium is reached. Regrettably, no portion of that prescription
remains true in practise.
By combining the spirit of game theory with the real behaviour of businesses, strategists may
simplify and enhance prediction. Our experience teaches us to begin with the following rule:
Among the alternatives carefully considered by your enemy, he will select the most effective
one (as determined by his analytic approach) within the restrictions of his trade-off between
short- and long-term suffering. The rule makes logical and has been validated via our client
work. To put it into practise, strategists must consider the following two subquestions:

1. How far ahead does your rival appear to be?

In chess, the top players are said to anticipate five or more steps ahead—a process that
(intuitively) entails sorting through hundreds of thousands of "if he picks x, I will choose y,
and then he will choose z" possibilities. In business, planning ahead is a similar procedure.
We conducted actual trials in which the ideal option is different depending on whether the
rounds are even or odd. To make matters more complicated, your adversary's optimal answer
may vary depending on whether he analyses simply your reaction or that of other rivals as
well.
Only 25% of our survey respondents explored more than two or three possible responses to a
competitor's move.
Fortunately, while there are several methods to examine a situation, the vast majority of
businesses, like you, prefer straightforward, readily replicated studies. When asked how
many moves and countermoves they studied, over 25% of our respondents said that they
modelled no interactions other than their own. This percentage was as high as 45 percent in
other circumstances (for example, financial sector responses to pricing changes). The next
two most often given responses were based on the assumption of a single round of counter-
reaction by either the first mover (the firm that introduced the innovation or price adjustment
to which the competition is responding) or many competitors. That is, around 35% used a
one-stage response model. (Again, the proportion was far greater in specific industries.)
Fewer than 10% of the managers questioned examined many rounds of response from
multiple competitors.

2. How does the rival measure success?

Businesses frequently make the mistake of assuming that everyone assesses success the same
way. This explains why a large proportion of our clients feel their competition are
"irrational." However, would your most significant competition, who by definition has made
a series of intelligent choices (otherwise, he would not be your most significant competitor),
pick this time to lose his senses? Or is he merely following a plan that appears to be inept by
your standards but appears to be rather intelligent by his? Simply ask yourself, "What metric
would have influenced my competitor's recent decisions?" to ascertain your competitor's
metrics. You won't have to look far to get the solution. The majority of businesses employ
easy, short-term strategies. Only roughly 15% of respondents in our poll employed NPV to
assess their alternatives. Seventeen percent based their decisions on short-term market share,
while another seventeen percent based their decisions on short-term earnings. 20%
considered "long-term" market share, while another 21% considered "long-term" earnings.
However, do not interpret our responders' usage of the term "long-term" literally. When
asked how far into the future they anticipated the costs and advantages of their probable
replies, 85% indicated four years or less, and around 62% stated two years or less. These
percentages vary according on the respondent's geographic area and industry. For instance,
when considering price movements, the majority of respondents in Asia-Pacific reduced their
time horizon to one year, whereas financial services organisations increased it to three to four
years. Clearly, managers struggle to accept the uncertainty of short-term expenditure in
exchange for the certainty of long-term return.
Your final task is to mimic your adversary’s decision-making process by applying his metrics
and analytic techniques (including the rounds of competition) to the options you think he will
look at in order to see which one (or ones) seems best. Sensitivity analyses should be
conducted for the elements of greatest uncertainty to help determine whether or not the
choice for your adversary is clear-cut. If these indicate that the decision is a close call, then
you must also assess your adversary’s recent actions in response to a competitive move. Our
research suggests that even if companies consider multiple response options, most will have a
clear preference for one or two. The companies represented in our survey that reacted to a
strategic move at all (remember that 17% did not react) usually either made the most obvious
response (22% in the innovation group, 18% in the pricing group) or relied on the instincts of
the decision maker (19% of innovation managers, 13% of pricing managers). What you must
do, therefore, is spend some time understanding the patterns the CEO or relevant executives
have displayed in prior decisions: Get a gut feel for their gut feel. Talk to people who have
worked with those executives and learn about the units they have led. Look at the history of
the competitor’s other units, as well.

A rigorous analysis of competitors’ behavior doesn’t have to involve a lot of math and talk of
Nash equilibria. The key is to focus on understanding how a competitor actually behaves
rather than on the theory of how everyone should behave. By studying your competitor’s past
behavior and preferences, you can estimate the likelihood of his responding at all, identify the
responses he is likely to consider, and evaluate which will have the biggest payoff according
to his criteria. This information can give you an accurate idea of what your competitor is
likely to do. And the competitor you can predict is the one you can learn to outsmart. Isn’t
that what strategy is all about?

Knowing the tactics, aims, and strengths and weaknesses of competitors can assist managers
predict (project) how they will react to the company's strategies. Furthermore, each
competition has its own corporate philosophy, culture, and guiding values, all of which
influence its reaction pattern. Each competitor reacts in a unique way. Some companies might
not react immediately or aggressively to a competitor's move for a variety of reasons: they
may believe their clients are loyal; they may be sluggish to notice the shift; or they may lack
the financial resources to respond. Some competitors only react to particular types of assaults
while others do not. They may always react negatively to price reductions as a way of
signaling that they will never succeed. They may, however, be unresponsive to advertising
increases, considering them to be less dangerous. Other competitors retaliate quickly and
strongly to every attack. Knowing how significant competitors react might provide insight
into the best ways to attack competitors or protect the company's current positions.

1.4.1 Competitors based on reaction patterns

Competitors can be divided into four groups based on their reaction patterns:

 The Laid-back Competitor: This competitor does not respond swiftly or forcefully
to any of the opponent's movements or attacks. There could be a variety of reasons
why the laid-back competitors don't react right away, including the fact that they
 believe their customers are loyal, that they are doing well in business, that they are
slow to notice the move, that they lack funds to react, that they are too preoccupied
with their own development plan, and that they are confident that rivals cannot harm
their interests in any way.
 The Selective Competitor: A competitor that respond only to certain types of attacks
and not to all attacks. For example, it may respond to price decrease, but not to
increased or improved promotional efforts.
 The Tiger Competitor: A competitor who reacts quickly and fiercely (like a tiger) to
any attack on its terrain or arena. The tiger competitor wants competitor to know that
it is a tiger and that they should avoid attacking since the defender (the tiger) will/can
fight to finish them.
 The Stochastic (Unpredictable) Competitor: A competitor who does not react in a
predictable manner. The stochastic competitor may not react for a variety of reasons.
For example, it may not want to react on a specific occasion; it may not be in a
favorable economic situation; it may want to prepare for a strong future attack; it may
believe that it is better to concentrate on improving its position rather than react;
and/or it may believe that rivals' attacks cannot harm its performance.

1.4.2 Competitors Competitive Position:

Competitive positioning is a marketing strategy that relates to how a company's marketing

team may set itself apart from its rivals. The company's position is determined by how its
goods and services compare to the value of similar goods and services on the market.
Consumer judgments are used in the competitive positioning method, usually on an aggregate
basis.

There are four different sorts of competitive strategy:

1. A cost-cutting technique: It works well for huge companies that can create a large volume
of things at a low cost.
2. Cost-cutting strategy.
3. Differentiation leadership strategy.
4. A focus on differentiation strategy.

1.4.3 principle of competitive positioning

Competitive positioning as a factor to consider while establishing a marketing strategy has

been characterised as follows:
Positioning is the process of developing a business's offering and image in such a way that
they hold a relevant and unique competitive position in the eyes of its target consumers.
(2000) (Kotler, 1997)
Competitive positioning is fundamentally concerned with how customers in various segments
of the market perceive rival organisations, products/services, or brands. It is critical to
remember that positioning can occur at any of the following levels:
Companies: For example, in grocery retailing in the United Kingdom, the major competitors
are Tesco, Sainsbury's, and Asda, and positioning is based on their identities; products and
services: positioning also applies at the product level, as demonstrated by the comparison of
the Dyson vacuum cleaner to similarly priced products from Hoover and Bosch; brands:
competitive positioning is perhaps most frequently discussed in terms of brand identities:
Indeed, some examples demonstrate the critical nature of these levels in relation to one
another – Virgin, for example, is a company that embodies certain values in the minds of its
customers, which translates into the company's simplified financial services products and
serves as the brand identity for a variety of products and services.
In some respects, competitive positioning may be viewed as the result of businesses' efforts to
achieve successful competitive differentiation for their products and services.
However, according to Kotler (1997), not all competitive differentiation efforts will result in
a strong competitive position; differentiation efforts should fulfil the following criteria:
Importance – a distinction should result in a highly valued advantage for a sizable number of
clients; Distinctive and pre-emptive – the distinction should be difficult to copy or perform
better by others;
Superior – the difference should provide a superior method for customers to obtain the
desired benefit; communicable – the difference should be capable of being communicated to
and understood by customers; affordable – the target customers can afford to pay for the
difference; profitable – the difference will command a price that is profitable for the
company.
The notion of the value proposition – the promise given to clients that embodies the position
we desire to take in comparison to rivals – is one method to describe the consequence of the
search for distinctions that matter to target customers and how we perform them in a
distinctive manner. For example, in the mid-1990s, Daewoo obtained 1% of the UK
automobile market from scratch in the quickest period ever recorded by a car manufacturer.
The automobiles it offered were unremarkable — they were rebadged versions of older
General Motors designs. What set it apart was an unambiguous and unequivocal value offer
to its target market niche. The four pillars around which this company's unique value
proposition was built were as follows:
1 direct: interacting directly with customers rather than via conventional distributors and
remaining in touch throughout the purchase and usage of the goods; 2 hassle-free: clear
communication with customers and no sales pressure or price bargaining;
3 reassurance: all consumers pay the same price, and several items that were formerly
provided as optional extras are included in the package;
4 decency: exhibiting throughout the process an awareness of the customer's demands and
preferences.
On the strength of this concept, Daewoo soon built a strong competitive position in a certain
section of the automobile industry.
A competitive position may be established on any aspect of a product or service that provides
an advantage to the consumer in the market, but positioning places a strong focus on the fact
that what matters is customer perception.
Indeed, Ries and Trout (1982) popularised the word 'positioning' to refer to the creative
process that begins with a product. A product, a service, a business, or even a person...
However, positioning is not something that you do to a product. Positioning is what you do to
the prospect's thinking. That is, you place the product in the prospect's consciousness.
The Ries and Trout approach to the 'battle for your mind' is heavily focused on marketing
communications and brand image, whereas competitive positioning, as we have seen, is
somewhat broader in its recognition of the impact of every aspect of the market offering that
customers perceive as critical to creating distinctive value. To summarise the fundamental
philosophy, consider the following: You don't purchase coal, you buy heat; you don't buy
circus tickets, you buy thrills; you don't buy a newspaper, you buy news; you don't buy
glasses, you buy vision; and you don't sell items, you create positions.
Kotler's (1997) warning about the primary positioning flaws (Figure 7.3) that might weaken a
company's marketing strategy emphasises the critical nature of clear and powerful
competitive positioning:
Under-positioning: when clients have only hazy perceptions of a firm or its products and see
nothing distinctive about them, the product becomes a 'also-ran';
Over-positioning occurs when a customer's perception of a company, product, or brand is too
limited: Mont Blanc offers pens for many thousand pounds, however it is critical for the
brand that consumers understand that a Mont Blanc pen can also be purchased for less than
£200;

Confusion about positioning: frequent changes and contradictory messages may

simply confuse customers about a company's positioning: Sainsbury's indecision
about whether or not to have a loyalty card in response to rival Tesco's launch of its
card, as well as about its price level in comparison to competitors, contributed to its
1990s market leadership loss; doubtful positioning: the claims made for the company,
product, or brand may simply not be accepted, whet the appetite for the company,
product, or brand. British Home Stores' objective of becoming 'the first-choice store
for outfitting the modern lady and family' failed in a market dominated by Marks &
Spencer, notwithstanding the latter's recent difficulties

1.5 SUMMARY
  The marketing plan explains in detail the steps that must be taken in order to carry out
the marketing program, and it takes a lot of time and effort to develop and implement.
 Market analysis is a wider term. If want to launch a product we should know the
market situation. Strategic planning is required to reach the goals.
 To achieve the goals we should know about the market situation, our competitors. The
process of strategic market planning may be quite complex.
 The planning process begins with an in-depth investigation of the organization's
internal and external settings, which is frequently referred to as a situation analysis,
whether at the corporate, business unit, or functional level.
 SWOT analysis focuses on the internal (strengths and weaknesses) and external
(opportunities and threats) aspects that provide the firm specific advantages and
disadvantages in serving the needs of its target market, as determined by the situation
analysis.

1.6 KEYWORD

Market: A group of customers or organizations that is interested in a product, has the

financial means to purchase it, and is permitted to do so by law and other laws.
Market Segmentation: Market segmentation is the practice of dividing a market into groups
of buyers with distinct demands, features, or behaviors who may require different products or
marketing mixes.
Microfinance Robinson (2001) defines microfinance as ―small-scale financial services
primarily credit and savings—provided to people who farm, fish or herd‖ and adds that it
refers to all types of financial services provided to low-income households and enterprises.
Entrepreneurship - An entrepreneur is a person who has possession over a new enterprise or
venture and assumes full accountability for the inherent risks and outcome. The term is a lone
word from French and was first defined by Irish economist Richard Cantillon A female
entrepreneur is sometimes known as entrepreneurs. However, Entrepreneur in English is a
term applied to type of a personality who is willing to take upon herself or himself a new
venture or enterprise and accepts full responsibility for outcome. (Veira, X. (2008).
Over-positioning - Over-positioning is a marketing failure whereby a brand, product or
service is too special such that it appeals to few customers. The term applies to a
competitive position or product differentiation that may strongly appeal to some customers
but not enough to reach a firm's sales targets.

1.7 LEARNING ACTIVITY

1. What is market analysis?

2. Define competitive research?

 1.8 UNIT END QUESTIONS

A. Descriptive Questions

Short Questions:
1. What is SWOT analysis?
2. What are types of competitors?
3. Why analysis of competitor’s strategies is important?
4. What is purpose of analyzing market situations?
5. Write the step in analyzing competitors?

Long Questions:

1. What are five C’s of market situation analysis?

2. What are advantages of market analysis
3. What are disadvantages of market analysis?
4. What are the elements of competitive analysis?
5. Describe market analysis and competitor strategies analysis.

B. Multiple Choice Questions

1. __________ Competitor who does not react in a predictable manner.
a. The Stochastic
b. The Tiger
c. The Laid-back
d. The Selective
2. _______________is not a primary factors to consider when assessing the current
market situation.
a. Company
b. Advertising
c. Climate
d. Collaboration
3. An ___________ competitor is a corporation that provides similar products and
services to direct competitors, but with distinct ultimate goals.
a. Substitute competitors
b. Indirect competitors
c. Direct competitor
d. Replacement competitor
4. An __________ is defined as an external factor that has a favorable impact on or
contributes to a company's success.
a. Strength
b. Weaknesses
c. Threat
 d. Opportunity
5. Market Situation Analysis should be based on _______ , hard, verifiable facts.
a. Cold
b. Hot
c. Soft
d. Warm

Answers
1-c, 2-c;l, 3-a. 4-d, 5-a

1.9 REFERENCES

References book:

 Marketing_Management_14th_Edition by Philip Kotler (Northwestern University)

and Kevin Lane keller (Dartmouth College)
 Principal of marketing 2nd European edition by Philip Kotler
 Marketing Management- Essentials of Marketing edited By Neha Tikoo
 Marketing Strategy by Ferrel Hartline

Websites:

 https://smallbusiness.chron.com/disadvantages-marketing-analysis-25883.html
 https://www.yourarticlelibrary.com/marketing/8-stepped-process-of-analysing-
competitors/48761
 https://www.zabanga.us/sales-promotion/estimating-competitors-reaction-
patterns.html
 https://www.cleverism.com/ultimate-guide-market-situation-analysis/
UNIT - 2:
STRUCTURE
2.1 Learning Objectives
2.2 Introduction
2.3 Market leaders’ strategies
2.2.1 Expanding the total Market
2.2.2 Protecting Market Share
2.2.3 Expanding Market Share
2.4 Market Challenger Strategies
2.4.1 Choose and Attach Strategy
2.4.2 Market follower strategy
2.4.3 Market niche strategy
2.5 Summary
2.6 Keywords
2.7 Learning Activity
2.8 Unit End Questions
2.9 References

2.0 LEARNING OBJECTIVES

After studying this unit, you will be able to:

 Describe strategies of market leader.

 Explain market share effects.
 State market share strategies of five step procedure.
 List the benefits and drawbacks of market challenger.

2.1INTRODUCTION
It's not easy to be the market leader. Other firms are always challenging the leader's strengths
or attempting to exploit its flaws. In the face of fresh entrants as well as existing rival firms,
the leading firm may become weaker or outdated.
Almost every business model is based on a market leader with the biggest market share. In
most cases, the leader is the one who leads the other companies in terms of new product
creation and price modifications. Promotional event and distribution systems Others, on the
other hand, may not respect the leader. Others, on the other hand, may recognise its power.
Only the leader is followed, challenged, imitated, or avoided by companies.
Obviously, the life of a market leader is not simple. It is necessary to be cautious at all times.
Other companies are continuously looking for methods to exploit a leader's flaws.
The leading brand can adopt one of three actions to maintain its market leadership.
The market leader in the industry has the biggest market share in the relevant product. It
commands a significant share of the market. It clearly outperforms competitors in terms of
new product creation, price changes, distribution coverage, promotional activities, and
innovative experimentation.
Other firms may or may not respect the leader, but they must recognise the leader's power.
The market leader might be challenged, followed, or avoided by other companies. Maruti
Suzuki in cars, Hero Honda in two-wheelers, Hindustan Unilever in consumer packaged
goods, Coca-Cola in soft drinks, McDonald's in fast food, Life Insurance Corporation in life
insurance, and so on are well-known market leaders in India.
The market is monopolised by a few market leaders. To maintain their leadership position,
they must remain awake at all times. Other companies are continually putting pressure on the
CEO's position. A minor blunder can knock the leader down to second or third place. In all
aspects of marketing, it must employ creative approaches. In order to keep the top spot, it
sometimes has to spend a lot of money.Increasing overall demand,Market share should be
protected,Increase your market share.

Market Challenging Techniques are marketing strategies used by companies in the third or
second place in the market to target the market leader or a direct rival with the goal of gaining
a larger market share and generating large profits.
There will be rivalry wherever there is a market. In fact, it wouldn't be inaccurate to suggest
that the term "market" is associated with competition in the corporate world. There will be
competitors up front who have already gained market share if a new business enters a market.
So, what exactly does a new company do? Should it close due to apprehensions about
competition? NO, confronting those competitors would be the best strategy. This will benefit
the firm in two ways:
A company that takes on existing competitors will not only give them a hard time, but it will
also instil dread in newcomers, acting as an entry barrier.The new business will be able to
progressively climb the success ladder with this technique.
In the simplest terms, market challenger tactics are marketing techniques used by a company
to challenge or attack the market leader or immediate competitors in order to generate
revenue and gain market share. That company could be brand new to the market or ranked
second, third, or even last in the competition.
A "market challenger" is a company that takes on other companies. There is an extremely
significant point to be made here. Is it possible for a company in any position to challenge the
market leaders? No, it doesn't work that way, and here is where most businesses go wrong.
If a company is just getting started in a market, its competitors will be low-ranking
companies. A newcomer just cannot compete with the industry's leader or runner-up. If a
company is in fourth or third place in the market, it can go after the industry leaders.

2.2 MARKET LEADER STRATEGIES

1. Exploring the market on a global and local level:
Consider the market leaders in their respective categories, such as Coca-Cola, Microsoft, LG,
and others. You'll see that each of these companies has items that are well-known and widely
used around the world. Each of these items' marketing strategies, on the other hand, is
tailored to the market that it serves.
If you have a firm with a lot of competitors, you should think about market expansion as well
as localization. Don't ignore the worldwide market, but more importantly, don't forget your
own turf while serving the global market. The simple supporting data for this assertion is that,
after investigating global markets, every emerging country is now focusing on its own rural
markets, which will bring the most growth potential.
2. Smart Expansion:
Expansion for the sake of expansion can be destructive. All strategists understand that
maintaining a close eye on the company's cash flow is critical to its success. If your working
capital is being utilised for expansion, it will have an impact on even the company divisions
that are growing, forcing you to cut back on important initiatives.
Expansion is vital for a successful firm, but it should not be at the expense of a skewed
working capital or cash flow, since both can be detrimental to your existence.
3. Control costs :
Take a hard look at any good company's financial statements to see how they manage costs.
Profits can be calculated using only one formula. Profit equals income minus expenses. As a
result, if you reduce your expenditures, your expenses will naturally decrease, resulting in a
higher overall profit. The most important thing is to understand what the primary components
of your costing are. For example, transportation, rentals, labour, distribution margins, and
other expenses in a product-based corporation are all more expensive than the raw materials
required to make the product. As a result, understanding each and every costing component is
critical.
During a downturn, a wonderful example of the need of cost control may be shown. When a
corporation is confronted with a difficult economic environment, it must choose how to
control costs while reducing spending. It can be accomplished by making fundamental
changes to raw materials, partnering with low-cost transporters, shipping in bulk quantities,
reducing labour, and lastly reducing skilled manpower. These are some of the ways employed
by businesses to keep costs under control during difficult times. Instead of taking harsh
actions, if effective processes are used during good times, the corporation will have larger
margins and deeper pockets to phase out the bad times.
4. Implement effective marketing strategies :
The key to outsmarting your competitors is to establish your own distinct position in the
minds of your customers. This position should be both appealing and lucrative. Only then
will you obtain a competitive advantage over time. Marketing strategies must be put into
action correctly. What should the company's messaging be? How can you evolve your
messaging over time to attract more people to your business? How can marketing be changed
to increase market share and expand? What should marketing communication vehicles be?
What is the best way to implement the plan and in what order? These are some of the
questions that your marketing strategy should properly address.
It is critical at this time to use your competitors as a point of comparison and to develop a
marketing strategy that is superior to your competitors' and aids you in obtaining the statistics
you desire. The most effective technique to put together a solid marketing strategy is to do a
thorough competition analysis and determine where you stand in the current market. You are
not allowed to challenge the top rival right away. However, by establishing a great marketing
plan and sticking to it, you may eliminate each competition one by one. The key to marketing
success in this scenario is proper implementation of the marketing plan.
5. Get the appropriate individuals on board and keep them:
In the service industry, you are only as good as the people you hire. Many software
organisations set aside a portion of their profit margin to avoid having to replace software
professionals once a project is over. When the task is over, these engineers are transferred to
another project. A customer service manager never wants to lose one of their top employees.
A CEO will never want to lose one of his top performers. Any organisation does not want to
lose productive personnel. Your assets are your staff and stakeholders.
To keep your employees and stakeholders motivated and committed, you must take action on
a regular basis. Take any firm with a low attrition rate and you'll find one that invests heavily
in staff training and development. This is due to the fact that when people leave a company,
they take with them a portion of their expertise and experience. Over time, this knowledge
and experience must be instilled in the other employee. As a result, a significant amount of
effort is spent training and developing new personnel. As a result, smart businesses save time
by retaining and encouraging their most valuable people. And it is because of this that they
are able to keep ahead of the competition.
6. Concentrate on your clients:
Several businesses forget that the main reason they are still in business is because their clients
like their products. When a business forgets this principle, it is doomed to collapse. As a
result, you must be the finest in this field. You should know everything there is to know
about your customers. Conduct frequent market research and consumer buying behaviour
analysis to determine the customer's thinking. A new technology that you overlooked but that
a competitor has installed can catch your customers' attention and drive away even your most
devoted clients.
While a position of market leadership has undeniable appeals, both in terms of the potential
to influence others and a potentially better return on investment, leaders have all too
frequently proven fragile in the face of a challenger or the need for big technical change in
the past.
As a result, if a market leader wants to maintain its dominance, it must constantly defend its
position.
Because of the increased intensity of rivalry that has occurred around the world in recent
years, many managers have developed an interest in military battle models in order to
uncover any lessons that can be learned and applied to business. Position defence, mobile
defence, flanking defence, contraction defence, pre-emptive defence, and counter-offensive
defence are six military defence methods that can be deployed by a market leader bent on
defending his position. If military history can teach the marketing or business strategist
anything, it must be that some of these techniques are significantly less likely to succeed than
others.
Leading the market and putting the customer first:
From what has been discussed so far, it should be clear that a marketing planner must build a
clear vision of what the future will or can be for an organisation to become a market leader
and - perhaps more crucially – maintain its leadership position over anything other than the
short term. As part of this, it is commonly stated that a strong focus on the client is required,
and that the organisation must be customer-driven by necessity: fact, this is a basic feature of
the marketing notion.
However, it is important to note that there is a strong case to be made against being entirely
customer-driven, because customers rarely have a comprehensive or helpful vision of what
they want in the future. (It's crucial to note that we're not arguing against customer happiness
when we say we don't want to be customer-led.) For example, if Sony had developed the
Walkman based on the results of customer research, the product would have been abandoned
early on because few buyers seemed to value the concept.
A number of considerations must be addressed before making this decision, most notably the
competitive implications. Taking down a slew of tiny regional companies, for example, is
frequently significantly more profitable than going after the market leader.
Position defence, flanking defence, pre-emptive defence, counter-offensive defence, mobile
defence, and contraction defence are six popular defence techniques used by corporations in
market leadership positions to defend their market share from challengers.

2.2.1 Expanding The Total Market

Market leader companies make the most money as the whole market expands. The focus of
expansion in total markets is determined by the product's location in its lifecycle.
When a product reaches maturity, this method is typically adopted.
Expansion for the sake of expansion can be destructive. All strategists understand that
maintaining a close eye on the company's cash flow is critical to its success. If your working
capital is being utilised for expansion, it will have an impact on even the company divisions
that are growing, forcing you to cut back on important initiatives.
It's not easy to be the market leader. Other firms are always challenging the leader's strengths
or attempting to exploit its flaws. In the face of fresh entrants as well as existing rival firms,
the leading firm may become weaker or outdated. To keep its leadership, the company can
utilise one or a mix of three techniques.
When the overall market expands, market leaders typically gain the most. The focus of total
market expansion is determined by where the product is in its life cycle. When a product has
reached maturity, this method can be implemented. For example, the Japanese boosted
vehicle production in order to expand into new markets.
When a product is in the maturity stage of its life cycle, market leaders can look for more
users, new uses, and more consumption of their products. When ICICI Bank felt the heat of
competition in the congested and over-saturated urban market, it ventured into rural banking
and agri business lending. Maruti Udyog established the True Value automobile business,
which sells used cars that have been approved by Maruti engineers, in order to extend their
market in both rural and urban areas.
Expansion is vital for a successful firm, but it should not be at the expense of a skewed
working capital or cash flow, since both can be detrimental to your existence.
Knowing your rivals is one of the most important aspects of selling against them. Take, for
example, the consumer durables market. In the television and fridge segment, there would be
ten distinct contenders. In addition, each competitor will provide ten different product lines.
For Sec A clients, they would offer high-end refrigerators and televisions, while for the price-
conscious section, they would have low-end and lower-priced versions. To introduce your
own product versions, you must first understand your competitors and their product lines. On
the other hand, in order to introduce a product that is unique in the market and has the first
mover advantage, you must be familiar with all of your competitors' products. As a result,
information is critical.
Demand is the quantity of goods or services that a consumer is willing to buy at a specified
price in a given time period, and market demand is the sum of all individual demand for items
from buyers in the market. When a buyer enters the market with the financial means to buy or
pay for a product, market demand rises.
Methods for increasing total market demand include:
Attracting new customers: To attract new clients, the company focuses more on developing
new incentives and other promotional activities. The company must be concerned about
customer feedback while maintaining a high-quality product, as this has an impact on the
market. It entails actions such as free sample, increased advertising, and increased usage:
Companies want to encourage the use of their products since it helps them sell more and have
a good reputation in the market.
Market demand is influenced by the following factors:
Recognizing a market need is a difficult activity, and many students struggle to understand
the graph work of economics. However, you can now overcome your problems with the aid
of increasing total market demand assignment help. The demand for any product is
determined by its price, and it fluctuates as the price changes. For example, a rise in price
may result in a fall in demand for that product, but a decrease in price may result in an
increase in demand for products.
Consumer preferences and taste: This component has a significant impact on demand for
goods and services since it evolves with changing fashion, consumer attraction to things that
are advertised more effectively, product quality, and so on. When a consumer's taste and
preferences for a product are greater, the demand graph will be higher.
People's earnings:
The bigger the customer's income, or purchasing power, the greater the demand for items,
and the lower the customer's income, the lower the demand for products. When a customer's
income rises, they prefer to buy more high-quality items without regard for their budget, and
the demand curve goes upwards; conversely, when a customer's income falls, they have fewer
desires for any products, and the demand curve shifts downwards.
Price changes in items and services:
When the price of any good changes, the demand curve shifts since many buyers like low-
cost goods, and if the price rises, they would rather buy the product's substitute. For example,
tea and coffee are replacements, and if the price of one product changes, customers will opt to
buy another to satisfy their needs.
Advertisement:
Demands are heavily influenced by advertisements created by various companies, which
focus on addressing consumers and influencing them through various promotional activities.
Newspapers, the internet, television, and radio are some of the several types of
advertisements that are used to successfully create demand by influencing people.
Customer expectations:
This is one of the most significant variables in raising demand, and it focuses on what
customers want. If the price of a good increases in the future for any reason, the client will
want to buy it in bulk so that they do not have to pay more money in the future.
When the market as a whole expands, the leading company usually benefits the most. If more
individuals take pictures, Kodak, as the market leader, stands to benefit the most. Kodak will
benefit enormously if it can encourage more individuals to take pictures, or to take pictures
on more occasions, or to take more pictures on each occasion. In general, the market leader
should seek out new customers, new applications, and increased utilisation of its products.
Every product category has the potential to attract buyers who are unfamiliar with the product
or who are put off by its price or lack of specific characteristics. A merchant can usually
discover new customers in a variety of locations. L'Orfial, for example, might gain new
fragrance consumers in its current markets by persuading ladies who do not normally wear
pricey perfume to try it. Or it could appeal to new demographic groups; for example, men's
scents are a small but rapidly rising market. It might also expand into other geographic areas,
such as selling its fragrances to Eastern Europe's emerging wealthy.
Johnson's Baby Shampoo is a great example of how to get new customers. When the baby
boom faded and the birth rate slowed, J & J's marketers noted that other Market leader
strategies family members occasionally used the baby shampoo on their own hair, and the
corporation became concerned about future sales growth. Management devised an adult-
targeted advertising campaign. Johnson's Baby Shampoo rose to the top of the shampoo
market in a short period of time.

2.2.2 Protecting Market Share

When attempting to extend the entire market size, the leader must also constantly defend its
current business from enemy attacks. Coca-Cola, for example, must always be on the lookout
for Pepsi-Cola. Similarly, in the two-wheeler industry, Hero Honda must continuously guard
against Bajaj, Honda, Suzuki, and TVS. The leader firm must maintain its costs low and its
price commensurate with the value that buyers see in the product under this strategy.

A market can safeguard its market position in six different ways:

(i) Position defence: This strategy entails pouring all of your resources towards the most
successful companies right now. As a result, rather than the direct attack that the defender
expects, an attacker usually takes an indirect strategy to overcome a position defence. HUL,
for example, upped its marketing expenditure on Clinic Plus and Sun Silk shampoos while
also offering significant price reductions.

(ii) Flanking defence: This strategy protects leading brands' market positions while also
developing some flank market niches that can be used as a defensive corner to shield a weak
front or construct an invasion base for counterattack if necessary. HUL's accomplishment in
nurturing its first Rs.100 crore Indian-made brand Vim in a competitive dishwashing industry
is an excellent example. Through product innovation, appealing public advertising, road
shows, and public relations, it was able to stave off competitor attacks.

(iii) Pre-emptive defence: This defence strategy manoeuvre entails launching an offensive
against an adversary before the adversary launches an offensive. In the early 1990s, Titan, for
example, introduced more brands and sub-brands to control the HMT watch market.

(iv) Counter-offensive defence: This is a strategy that involves finding a competitor's

vulnerability and aggressively attacking that market segment in order to force the competition
to refocus its efforts on defending its own area. When a leader is attacked, he has the option
of launching a counter-offensive from the attacker's area.

For defence, the attacker must send resources to this zone. When Ceat tyres challenged TVS
Srichakra in Tamil Nadu, TVS chose to use novel efforts like road rallies, road shows, and
attractive public campaigns to spread its coverage to Ceat tyres' hub in the north and west of
India.

(v) Mobile defence: This approach entails the leader diversifying and stretching its territory
to new market locations. Innovation operates in both of these directions when the leader is in
charge. A five-star hotel, for example, can work as a foreign exchange dealer, an inbound and
outbound trip operator, a flouriest, and so on. Diversification into related fields is one of the
elements of mobile defence tactics.
(vi) Contraction defence: This approach entails retrenchment towards areas of strength, and
it is frequently adopted at the end of a product's life cycle or after the company has been
under significant attack. For example, HUL chose to focus on its core business areas of soaps
and detergents, and as a result, it has emerged as the obvious leader in the toilet market.

Marketing is commonly thought of as a tool for business expansion. It can help a company
launch a product, break into a new market, or acquire market share from existing items in its
current market. However, there is an incumbent that must defend its position for practically
every new product launch, market entry, or industry upstart capturing market share. The
defender loses the base on which to construct its own growth if it can't hold on to what it has.

While much research has been done on marketing as an offensive strategy, there has been
surprisingly little done on how strong incumbents can use marketing to respond to new or
anticipated threats, whether they arise as a result of deregulation, patent expiration, changing
technology, or rivals' shifting competitive advantage. That's unfortunate, because many of the
marketing difficulties that defenders face are distinct. An incumbent, for example, typically
has an installed base of consumers, implying that the company has specific information about
the clients it wants to maintain and how it might keep them. However, a newcomer has the
benefit of cherry-picking prized consumers and looting the most fruitful sectors of the
market, whereas the incumbent must defend its whole customer base.

The first step in defensive marketing is to examine the weapons you have at your disposal to
defend your market position. Your brand identity, or how people perceive you; the mix of
products and services that support that identity, including their pricing; and the means of
communicating your identity, such as advertising, are all examples.

The efficiency of these weapons will be determined by a number of circumstances, including

your incumbent status. For example, if you want to keep customers or keep them from
defecting, you might decide to change your brand identity. However, this may be difficult:
While customers' impressions of a newcomer are likely to be changeable, their perceptions of
an incumbent are likely to remain solid. The defender may hold the customer's perception of
"legacy," but despite large advertising expenditures aimed at changing that view, the defender
may be stuck with that moniker.

Whether your valuable clients are vulnerable or not, the biggest problem is dealing with
them. The idea is to provide the valuable-vulnerables a cause to stick around without
providing a benefit that isn't required to secure their loyalty. Telstra needed to work out how
to price its services in a way that would protect the valuable-vulnerables from Optus' attempts
to entice them away without lowering the rates of the valuable–not vulnerables, customers
who were perfectly content with their present services at their current costs.

Markets are expanded by increasing utilisation, new uses, or users. Leaders can protect
market share by keeping an eye on their position and quickly correcting any flaws. The
greatest strategy to protect market share is to keep on innovating.

A company's market share is a vital indicator of its competitiveness. A company's

profitability can be improved by increasing its market share. This is because as businesses
develop in size, they are able to scale as well, allowing them to provide lower pricing and
limit the growth of their competitors.

When attempting to extend the entire market size, the leader must also continuously defend
its current business from enemy attacks. The leader firm must maintain its costs low and its
price commensurate with the value that buyers see in the product under this strategy.

MARKET SHARE PROTECTION STRATEGIES:

1 Protect the first position

Like Tide laundry detergent with cleaning, Crest toothpaste with cavity prevention, and
Pampers diapers with dryness, position defence entails dominating the most desirable market
area in the minds of consumers, making the brand practically invincible.

2 Preventive defence

Attacking before the enemy launches an offensive is a more aggressive strategy. There are
various ways for a firm to begin a preemptive defence. It can either aim to accomplish Grand
market envelopment or wage guerilla action across the market, hitting one competitor here,
another there, and keeping everyone off balance. Local and regional banks now face stiff
competition from Bank of America's 13,000 ATMs and 4,500 branches around the country. It
has the ability to send out market signals to deter competitors from striking. It can roll out a
steady stream of new items while ensuring that they are preceded by pre-announcements and
planned messaging about future actions. Competitors may perceive preannouncements as a
hint that they will have to struggle for market share.

3 Counter-offensive defences

Most market leaders will counterattack if they are assaulted. Counterattacks come in a variety
of shapes and sizes. In a counteroffensive, the leader can confront the enemy, strike its flank,
or use a pincer movement. Invading the attacker's main territory is an effective counterattack
because it forces the attacker to retreat in order to defend the territory. FedEx invested
extensively in ground delivery service through a series of acquisitions after watching UPS
effectively invade its aerial delivery system. The goal was to attack UPS on its home turf.
The use of economic or political clout is another common method of counteroffensive. The
leader may attempt to crush a competitor by subsidising lower prices for the vulnerable
product with revenue from more profitable products; or the leader may prematurely announce
the availability of a product upgrade to prevent customers from purchasing the competitor's
product; or the leader may lobby legislators to take political action to stifle competition.

4 Contraction is a safeguard

Large corporations occasionally realise that they can no longer defend their entire region. The
optimal course of action appears to be deliberate contraction (also known as strategic retreat),
in which weaker territories are abandoned and resources are reassigned to stronger regions. In
2001, Diageo bought the majority of Seagram's brands and spun off Pillsbury and Burger
King so it could focus on alcoholic beverage powerhouses like Smirnoff vodka, J&B scotch,
and Tanqueray gin.

2.2.3 EXPANDING MARKET SHARE

"That share of the market commanded by a firm's product (or brand)," for example, is a
simple definition of market share. However, because this is a tautology rather than a
definition, it does not assist us grasp market shares. The fundamental difficulty is the
vagueness of the term market.

A market leader's profitability can be improved by increasing market share. Market share
profitability is raised, and market leaders who wish to keep their position and extend the
overall market defend the current market area.

Example- According to a survey released by Strategy Analytics on May 7th, 2020, Apple
Watch maintained its lead in the global wristwatch industry with a share of 55 percent in the
first quarter of the year. Market leaders such as HUL, Procter & Gamble, McDonald's, and
Titan can boost their profitability by growing their market share. To summarise, market
leaders who remain at the top have mastered the skill of extending the overall market,
protecting their current area, and growing market share and profitability.
All newcomers have a tough struggle in competing with highly aggressive market giants.
Consider the tea or coffee industries. No entrants dare to enter the market since Tata, HUL,
and Nestle have effectively guarded their market share.

When the overall market expands, market leaders typically gain the most. The focus of total
market expansion is determined by where the product is in its life cycle. When a product has
reached maturity, this method can be implemented. For example, the Japanese boosted
vehicle production in order to expand into new markets.

Market leaders such as HUL, Procter & Gamble, McDonald's, and Titan can boost their
profitability by growing their market share. To summarise, market leaders who remain at the
top have mastered the skill of extending the overall market, protecting their current area, and
growing market share and profitability.

All newcomers have a tough struggle in competing with highly aggressive market giants.
Consider the tea or coffee industries. No entrants dare to enter the market since Tata, HUL,
and Nestle have effectively guarded their market share.

Stage 1 : Analysis

1. Model Parameter Estimation: The next stage is to estimate the parameters of the models
once the relevant models have been picked. This step will employ statistical techniques such
as log-linear regression analysis and maximum-likelihood estimation. Even if the model
specification remains the same, it may be required to re-estimate parameters on a regular
basis. This is desirable not just for the purpose of adjusting parameter values to changing
situations, but also for enhancing estimate accuracy. 2. Decision-Related Factors Conversion:
The structure and occurrences in the market and competition are provided by the model
parameters themselves, which provide little information to the analyst or manager. Market
share responsiveness to marketing operations of own firm and competitors, as described by
market simulators, may be more immediately helpful information from the perspective of a
decision maker. It could also be a visual representation (map) of competing products/brands'
relative market positions. It takes a certain amount of inventiveness to create a presentation
that is easily comprehended by non-quantitatively minded management.

Stage 2: Planning and Strategy

The planning stage can be broken down into two parts: 1.Strategy Formulation: The
information gathered during the analysis stage is used to formulate marketing strategies in
this step. 4It is envisaged that descriptive, rather than predictive, methods of analysis will
provide concrete formulation ideas to the analyst and manager(s).

1.marketing tactics: For example, the visual summary may indicate more effective marketing
methods.

2. Forecasting and Planning: A marketing plan will be used to forecast future market shares
and sales volumes. It's pointless to talk about forecasts unless there's a clear plan in place.
Explicit assumptions regarding competitive activities, for example, are required by market
simulations. As a result, they generate conditional forecasts (i.e., condi-tional on these
assumptions). A strategy can be tested against a variety of competitive scenarios.
Furthermore, while searching for an ideal (i.e. profit-maximizing) plan is theoretically
possible, it is not necessarily realistic.

Stage 3: Follow Up

After marketing plans are implemented, it is crucial that the analyst evaluates the
performance of the firm's product/brand. A thorough examination of one's intentions and
actual performance would improve not only future planning but also market-share analysis
approaches. In order to do a follow-up, it is not sufficient to examine if market shares were
correctly projected. For three main causes, market shares and, as a result, actual salesvolume
differ from predicted numbers. 1. Industry sales volume forecasts were incorrect. 2. Market
share forecasts were incorrect. 3. Marketing initiatives did not go according to plan. If actual
performance differs from what was expected, it is critical for the analyst to pinpoint the cause
of the discrepancy through meticulous investigation. The so-called variance analysis5 could
be effective in this situation.

Market Share Effects:

1. Economies of Scale Economies of scale relate to a company's cost advantage when it

increases its output level.

The benefit emerges as a result of the an rise in a company's market share might enable it to
operate on a larger scale and earn more money. It also assists the organisation in gaining a
cost advantage over its competitors.

2. A rise in sales
Increased market share can also enhance a company's overall sales. When consumers observe
that a majority of their peers are loyal to a particular brand, the remaining consumers are
compelled to buy that product.

3. A larger customer base

An rise in market share also aids in the expansion of a company's consumer base. When the
majority of a customer base is loyal to a single brand or product, the rest may follow suit.

4. Popularity

An rise in market share can benefit a company's reputation. A positive reputation, in turn,
aids in increasing sales and expanding the consumer base.

5. Taking control of the industry

A company's influence over the industry it operates in grows as its market share grows.

6. More negotiating clout

A corporation begins to dominate an industry as its market share grows. A firm can exercise
some powers, such as more bargaining power, with increased influence over the industry. The
corporation gains an edge and can bargain with suppliers and members of the distribution
channel to its benefit.

How do you grow your market share?

1. Creativity

Increased market share can be achieved through innovation. Product innovation, production
process innovation, or simply delivering new technologies to the market that competitors
have yet to provide are all examples of innovation. A corporation can get an advantage over
its competitors and dominate the industry through innovating.

2. Price Reductions

Lowering pricing can also help a company gain market share. Lowering prices will attract
more customers, allowing the company to expand its client base and increase revenues, so
growing its market share.

3. Increasing the value of customer connections by enhancing their current customer

relationships, Customer Relationship Management
Customer bonding is the process by which a business or organisation establishes relationships
with its clients. The purpose of customer bonding is to help businesses protect their present
markets and avoid losing customers due to increased competition. This improves consumer
happiness, which leads to a growth in customer base through word-of-mouth marketing.

4. Advertising

Increasing market share through advertising is an expensive but effective strategy. With such
fierce rivalry in the market, advertising is a wonderful strategy to acquire a competitive
advantage.

Quality has improved.

Customers are becoming increasingly concerned about a product's quality as well as its
pricing. A company's market share can be increased by assuring greater quality standards.

6. Purchasing.

Purchasing a competitor is a surefire way to gain control of an industry. A corporation

obtains access to a new client base by purchasing a competitor, but it also eliminates
competition and helps build domination over an industry and boost market share.

2.3 MARKET CHALLENGER STRATEGIES

A market challenger is a corporation that aggressively floods the market with its products at
competitive rates in order to increase its market share. It is a company with a strong presence
that is just below the market leader (Picon, 2015). A market challenger is a company or a
firm that ranks second or third in its industry. The primary goal of a market challenger is to
increase market share and become the industry leader by offering a new product line or
increasing customer service. Companies having a low market share, according to Ferrell and
Hartline (2011), frequently strive to improve their market share by using this method. By
implementing these methods, they can take on the market leader or other competitors. It is
not required for the market leader to be a competition when a brand enters a market. Even
companies in second or fourth place may become competitors if they cut into market share.
Frontal attack, flank attack, encirclement attack, bypass attack, and guerilla marketing are all
strategies that a brand can employ to combat these threats. According to Urban (2004), a
market challenger can launch a full-frontal assault by introducing items that are similar to the
market leader's in terms of quality, competitive pricing, aggressive advertising, and
distribution. To acquire market share, the ideal method is to create differentiated items that
will aid in the creation of their own brand name and aggressively push that product into the
market through various distribution channels. Any technique a company uses to gain market
share or knock down the market leader necessitates a significant financial investment (Parkin,
2009). It is a costly process to become a market challenger, and businesses should be aware
of this.

Challengers to the market Smaller companies can use one of two approaches. They can take
an aggressive posture and fight other firms, including the market leader, in an attempt to
obtain market share and perhaps dominance (market challengers), or they might take a less
aggressive stance to protect the status quo (market maintainers).

Market challengers fight other companies, including the market leader, in an attempt to gain
market share and gain leadership, or they take a significantly less aggressive strategy and
accept the status quo ( market followers). Several variables must be considered when
choosing between the two, the most important of which are the costs of attacking other firms,
the likelihood of success, the final probable profits, and management's desire to engage in
what will almost always be a costly fi ght. Fruhan (1972, p. 100) has commented on the
question of returns, highlighting the consequences of spending irresponsibly, noting that,
particularly in mature markets, management can all too readily fall into the trap of chasing
market share that turns out to be ineffective.

This idea was followed up by Dolan (1981), who claimed that industries with stagnating
demand, high fixed costs, and high inventory costs experience the most severe competitive
competition. While there may be a need to gain market share in order to benefit from higher
economies of scale, the costs of doing so are significant, and the possibility of the pyrrhic
victory mentioned before grows dramatically. As a result of this, the strategist should have a
better understanding of the most cost-effective course of action.

In reality, this entails selecting one of the following options:

1. Attacking the market leader.

2. Targeting businesses of comparable size that are either underfinanced or reactive.

3. Targeting small businesses in the region.

When most businesses join the market, they make the error of focusing on the industry's top
player. They are just interested in defeating the best player. When you first enter a market,
though, your greatest competition is the one who surrounds you and eats up even a small slice
of your market share. It's improbable that the first brand on the market will be your opponent
if you're the fifth or sixth. In your situation, the fourth and third brands are more likely to
provide a market challenge.

FIVE STEP PROCEDURE:

1) Go for a direct hit.

A frontal attack occurs when a rival fights another based on the opponent's strengths, as seen
most prominently in the smartphone industry now, or more regularly in the Pepsi vs Coca-
Cola war since the centuries.

When Coke develops Diet Coke, Pepsi introduces Diet Pepsi as an example. Both companies
have a diversified product range and a strong product expansion strategy. Pepsi launches a
product in response to its market opponent in a direct frontal attack.

2) Attacking from the flank

Pepsi and Coca-Cola, for example, are two brands that are extremely powerful in the FMCG
sector and have no direct competitors. As a result, they attack from the front. What if a little
player is pitted against a colossus? The player then employs a flank assault, attacking the
competition's weaknesses. For example, many technology companies, such as AMD vs Intel,
Apple vs Microsoft, and others, employ a flank attack strategy.

3) An attack based on encirclement

This type of market challenger strategy is used when a rival assaults another on the basis of
both strengths and weaknesses, leaving no stone unturned in the process of destroying the
competition.

The current E-commerce scenario is the best example of an encirclement attack, in which E-
commerce corporations are willing to go negative in margins in order to outperform a
competitor on a turnover basis. By all means necessary, they aim to rise to the top and gain
the greatest number of clients.

4) Attack using a loophole

What happened to the Sony Walkman after the iPod was released? It simply sailed right
through it. There is no simpler example of a market challenger approach than the bypass
attack. A company with the ability to innovate employs this technique. When it innovates, it
avoids the competition entirely and creates its own market segment. Other competitors, of
course, quickly follow suit. However, in the long run, the attack is really beneficial for
building brand reputation and gaining customers.

5) Guerrilla marketing

Guerrilla marketing is a type of marketing that uses unconventional methods to reach out to
people.

Guerrilla marketing is all about making modest but impactful changes that keep your brand in
the spotlight and help it grow into a household name. A small company that wishes to
compete with larger brands will first establish itself in a local market, then offer price and
trade concessions.

Slowly but steadily, the little player's name will become known, and it will then engage in
branding as well as ATL and BTL marketing. The tiny player has grown into a successful
large player over time and has become a thorn in the side of all of the market's larger players.
Isn't this the storey of any little business that has grown into a major corporation?

For instance, consider the AJE group. They have been in the market for numerous years with
their signature product, "Big Cola." It gradually grew in popularity to the point where the
brand can now be found in a number of nations.

The Benefits of Being a Market Challenger:

1.Market challengers can readily take advantage of competitors' faults or shortcomings to

gain market share.

2.Other businesses, particularly newcomers, view market competitors as aggressive or

proactive corporations aiming to overthrow any competition.

3.The time it takes for a product to reach the market is much shorter.

4.The costs of development and research are relatively cheaper.

Being a Market Challenger Has Its Drawbacks:

1.Customers are always comparing market challengers to market leaders. As a result, the
challengers will have to be at their best all of the time.
Because competitors aren't the first option of clients, it's tough for them to establish an
irreplaceable position in the market. They are acceptable as long as they can deliver the same
or better quality at a lower cost.

2.Customers will not identify the challenger as good enough to compete with the industry
leaders if it fails to produce the goods it claims.

3.To stay in the competition, challengers may have to take financial losses or reduce their
profit margins. It will be difficult to restore to more lucrative rates if a brand seeks to entice
customers and overthrow competition by dramatically decreasing prices.

4.A challenger strategy (such as the guerilla attack plan) might go awry if a brand hurts the
sensibilities of its clients.

2.3.1 CHOOSE AND ATTACK STRATEGY

Due to the large number of merchants selling comparable goods or services, the business
market is currently saturated.

As a result, you will become a market challenger in any market you choose to enter. You
must instil fear in potential market entrants in order to minimise the number of competitors.

Most businesses make the frequent error of focusing just on outperforming the industry's
leading competitor. They are oblivious to the fact that brands that come in second or third
place may pose a threat to them.

We've compiled a list of the top five market challenger methods you should be aware of in
order to safeguard your company:

1.Line of Defense

This is a direct assault based on the strength of the opponent.

Customers are usually attacked by providing them a lower price, a higher-quality product,
aggressive advertising, or better service. This is a hazardous attack because if you lose, your
sales, customers, and public image will all be for naught.

Frontal attacks come in a variety of forms:

Attacking from the front: a marketing fight to the death

Frontal attack with a limited number of targets: concentrated on a small number of clients.
Frontal assault based on research and development Create a product to take on the market
leader head-on.

In marketing, attack strategies are required. You are up against competition on all sides,
regardless of the type of goods or service you sell. You could be the market leader or you
could be in the middle of the pack. Understanding your current position and how to best
tackle the competition can help you gain a larger part of the market while also improving
your visibility, client loyalty, and revenue. To make the appropriate move, two of the most
prevalent types of attack methods necessitate a significant emphasis on your competitors'
strengths and weaknesses.

In marketing, a frontal attack approach involves a challenger going head-to-head with the
market leader. This entails focusing on the qualities of your competitors and matching your
own pricing, products, marketing, and promotions to the top brand. The winner is generally
chosen by who has the most endurance to last the longest, similar to a frontal attack in
warfare. Frontal assaults are hazardous because they pit your finest against the best of your
opponent. If you don't match up, you'll suffer losses in sales, customers, and public
perception. Let's face it: it's much easier to zero in on your competition's weak places and
outperform them than it is to take on the colossus head-on and risk losing. Pure frontal, which
is a head-to-head marketing battle; limited frontal, which is focused on specific markets; and
research and development, which entails developing a product to compete directly with the
market leader, are all examples of frontal attacks.

There are various sorts of frontal assaults:

1. Pure: It entails emulating competitors in every element of marketing.

2. Restricted: It entails targeting specific customer groupings.

3. Price-based: The competition matches every product attribute.

4. An attack on research and development

RCA, Xerox, and Univac, for example, attempted to take on IBM's mainframe industry but
failed due to a lack of competitive advantage. The Pepsi-Coke battles, which began in the
early 1900s, are an example of frontal attack methods. McDonald's Mccafes, or coffee shops,
are considered as a direct challenge to Starbucks.

2. Defensive flanking
This entails going after the weak aspects of the competition. Based on geographic location, a
market competitor can identify weak points.

This implies that challengers identify areas where competitors are underperforming and
devise marketing strategies to address those issues.

Aside from that, they can use segmentation to challenge their rivals. This is where a
challenger finds a market gap that competitors have overlooked and develops a product to fill
it.

If executed correctly, this technique has the potential to improve your market position and
produce excellent outcomes.

A flanking assault approach in marketing, on the other hand, is aimed to induce competitors
to focus on attacking and surmounting their competitors' weaknesses. Customer segments
that are not reached or geographic areas that are disregarded by the market leader are
examples of weaknesses that generate opportunities for challenger brands. Because they
focus on slipping silently into an uncontested sector of the market, flank strategies are less
dangerous for competitors. The most difficult situation arises when a market leader detects a
competitor's entry into a market with a new product or service and then devotes all of its
resources to surpassing the opponent.

Attacking the opponent from the side is known as flanking. Because the enemy's might is
usually concentrated in the front, it's effective. By attacking from the side, you increase your
chances of hitting a weaker, less guarded position, giving you an edge.

It's a successful sales strategy that's been around for a long time. In sales, flanking causes the
prospect's selection criteria to move to requirements that favour your offering. Flanking has
never been more important than it is right now.

Flanking refers to attacking an opponent from the side. It's successful since the enemy's force
is usually focused in the front. Attacking from the side gives you a better chance of reaching
a weaker, less guarded location, giving you an advantage.

It's a tried-and-true sales method that's worked for a long time. When it comes to sales,
flanking causes the prospect's selection criteria to shift toward those that favour your product.
The importance of flanking has never been greater than it is now.

Basics of Flanking Strategy: Companies that utilise flanking marketing must avoid coming
into direct contact with their competitors' brands. Managers must ensure that a move is made
in an uncontested market area. It's also important to keep in mind that the manoeuvre should
be subtle and quick.

This marketing technique tries to establish a market presence before the competition does.
Firms must conduct in such a way that the competition believes the firm isn't a threat until it's
too late.

Flanking Strategies:

1. Flanking at a Low Cost

In this sort of marketing, the marketer employs this strategy in order to save costs by cutting
prices. The company has drastically reduced its price. As a result, the competitor has a
difficult time selling its product. This is due to the fact that the company sells equivalent
products at a lesser price.

2. Flanking at a High Cost

There are a range of products under this model for which the marketers benefit from a high
pricing. For several reasons, the higher price is preferable. On the one hand, the product is
more expensive, but it is of superior quality and has more features. On the other side,
charging a premium price allows the company to make more money.

3. Flanking Distribution

When creating a new distribution channel, this is used. A flanking marketing approach might
be used by the company to provide assistance.

1. Tesla's Flanking Strategy – Direct Distribution & Long-Range Electric Vehicles

2. Animal Friendly & Vegan Products – Lush Cosmetics Flanking Strategy

3. Dollar Shave Club Flanking Strategy - Low Prices and Direct Delivery

4. Hanes Flanking Strategy - Hanes flanked its competition by selling pantyhose through a
different distribution system, marketing its L'eggs brand hosiery in supermarkets while
competitors only sold in apparel stores.

3. Attack by Encirclement
Defination: The Encirclement Attack is a challenger firm's war tactic that aims to attack the
competition on all important fronts. In this technique, the challenging firm evaluates both the
opponent's strengths and weaknesses before launching an attack at the same time.

The encirclement attack is thought to be limited to corporations that are 10 times stronger or
more powerful than the opponent. The assaulting firm's resources must be sufficient; only
then will it be able to undertake a multi-front grand offensive.

Product and Market Encirclement are two techniques that can be utilised in an encirclement
attack. When a challenger firm engages in product encirclement, it may introduce a variety of
items with varying features and quality, and price them differently based on their utility.

In the case of market encirclement, the company may develop a product for a market segment
that has been left unexplored by competitors and hence has a large market share.

The e-commerce business is the clearest illustration of an encirclement attack, in which

companies are willing to go to any length for high profits, even selling things at a loss.

Another example is the fashion industry, where corporations routinely produce multiple
varieties of products, each priced differently, in order to generate a large sales turnover and
outperform competitors.

This entails simultaneously attacking competitors' strengths and weaknesses.

Encirclement is just a mix of frontal and flank attacks.

If a business wishes to employ this method, it must be excellent in all areas.

This can be accomplished by launching advertising campaigns to attack competitors and

compel them to defend themselves.

The market competitor will gain market share in this manner.

The Encirclement Attack is a challenger firm's war tactic that aims to attack the competition
on all important fronts. In this technique, the challenging firm evaluates both the opponent's
strengths and weaknesses before launching an attack at the same time.

The encirclement attack is thought to be limited to corporations that are 10 times stronger or
more powerful than the opponent. The assaulting firm's resources must be sufficient; only
then will it be able to undertake a multi-front grand offensive.
Product and Market Encirclement are two techniques that can be utilised in an encirclement
attack. When a challenger firm engages in product encirclement, it may introduce a variety of
items with varying features and quality, and price them differently based on their utility.

In the case of market encirclement, the company may develop a product for a market segment
that has been left unexplored by competitors and hence has a large market share.

The e-commerce business is the clearest illustration of an encirclement attack, in which

companies are willing to go to any length for high profits, even selling things at a loss.

Another example is the fashion industry, where corporations routinely produce multiple
varieties of products, each priced differently, in order to generate a large sales turnover and
outperform competitors.

An encirclement attack strategy involves attacking a competitor on multiple fronts at once in

order to disrupt them and steal market share. The premise is that the defender will be
disoriented and confused by the approach and will be unable to successfully protect all
portions under attack.

This type of market challenger strategy is used when a rival assaults another on the basis of
both strengths and vulnerabilities, leaving no stone unturned in the process of overthrowing
the competition.

The current E-commerce scenario is the best example of an encirclement attack, with E-
commerce corporations willing to go negative in margins in order to outperform a competitor
on a turnover basis. They aim to be on top and attract as many consumers as possible by any
means necessary.

4. Violation of Bypass

This is an indirect attack in which a market challenger attacks a less competitive market to
expand its resource base. This can be accomplished in a number of different ways.

Develop new products, diversify into unrelated products, or extend into new geographic
markets with existing products are examples of such strategies.

This technique is used to gain long-term dominance in the market you're in, and it's
particularly effective if the industry you're in is very competitive.
Defintion: The Bypass Attack is the most indirect marketing approach used by a challenging
corporation to overtake a competitor by attacking their simpler markets. The goal of this
approach is to increase the firm's resources by capturing a competitor's market share.

Before launching the bypass attack, the company can choose one of three approaches:
diversify into unrelated products, expand into new geographic markets, or leapfrog into new
technology. Any of the approaches can be used as long as the company has sufficient
resources and is more powerful than the competition.

The term "leapfrogging" in new technology refers to a company conducting extensive study
before releasing the next generation technology in order to attract more customers and shift
the battleground to its own area.

This method is quite common in the mobile industry, as businesses release new technology
one after the other in order to outperform their competition. The bypass attack is followed by
well-known businesses such as Apple and Samsung.

Another example of this strategy is the rivalry between Coke and Pepsi. Pepsi utilised a
bypass attack on Coke by establishing the Aquafina mineral water brand before Coke's
Dasani brand.

A corporation that employs a bypass attack technique simply outperforms its rival. That
example, a company does not identify its competitor's weak spots or conduct counterattacks.
Rather, the company develops a new product and establishes its own market sector. However,
there are also options for fully bypassing the competition, such as expanding into previously
untouched markets. Diversifying your product portfolio with unrelated items.

Adding additional features to an existing product to update or modernise it. Of course,

competitors will catch up later, but the "trendsetter" will be able to establish a brand identity
in that market until then.

Pepsi Co.'s Aquafina

Pepsi Co's mineral water brand Aquafina is an excellent example of a bypass attack tactic.
Coca-Cola followed suit with its own mineral water brand when the business fully engaged in
a new market. Apart from that, the Apple iPod absolutely outperformed the Sony Walkman.

Bypass strategy, also known as a Leap Frog strategy, is a means to outperform or overturn
superior competitors in the corporate world by taking one massive, determined, merciless,
brilliant leap of intellect that leads to amazing growth, profit, and managerial position.
It primarily focuses on the marketing section of an organisation, where top-level executives
collaborate with executives to develop marketing strategies to aggressively promote the
company. It produces a wide range of comprehensive plans for a variety of scenarios,
including fortress strategy, promotion strategy, expansion price strategy, pioneer strategy,
follower strategy, channel strategy, and what is now known as "leapfrog strategy."

This technique entails a challenger completely bypassing its competition and grabbing all of
the competitor's customers in one fell stroke. It's a game-changing approach that completely
changes the rules of the game. By developing new technology or developing new trade
models, a rival has the highest opportunity of "leapfrogging." For example, the introduction
of the iPod fully overtook the compact disc industry, and mobile phones are rapidly
displacing landlines in Africa and India.

This method is effective if it can be implemented. However, not all contenders will be able to
leapfrog. To win, the challenger must possess unique, distinctive, and game-changing
knowledge and technology that is superior and better in every manner to that of all traditional
competitors. The challenger must also have the ability to create and grow engineering
capabilities to turn that technology into a compelling solution.

This technique entails a challenger completely bypassing its competition and grabbing all of
the competitor's customers in one fell stroke. It's a game-changing approach that completely
changes the rules of the game. By developing new technology or developing new trade
models, a rival has the highest opportunity of "leapfrogging." For example, the introduction
of the iPod fully overtook the compact disc industry, and mobile phones are rapidly
displacing landlines in Africa and India.

This method is effective if it can be implemented. However, not all contenders will be able to
leapfrog. To win, the challenger must possess unique, distinctive, and game-changing
knowledge and technology that is superior and better in every manner to that of all traditional
competitors. The challenger must also have the ability to create and grow engineering
capabilities to turn that technology into a compelling solution.

5. Guerrilla Marketing

Guerrilla marketing entails achieving tiny victories that add up to a significant increase in
market share over time.
Typically, a small business will pursue this technique after proving its viability in the local
market. The pricing and trade reductions are frequently announced after that.

This is due to the fact that every major participant in the market started small. Furthermore,
this method has been shown to demoralise competitors, allowing you to solidify your position
in the sector.

As a result, market challengers must be aware of the macro-environment and do everything

possible to improve their market position. As a result, they have a number of market
challenger methods to select from.

Guerrilla Marketing's Purpose

Stand out from the crowd of paid adverts and establish a distinct position in the thoughts of
your clients.

Create a brand that will be remembered by the audience.

Attract media attention, as news organisations and media outlets frequently cover and
publicise guerilla marketing campaigns.

Guerrilla marketing comes in a variety of forms.

Ambient Marketing:

Ambient Marketing is a type of marketing that takes place in. It refers to the marketing of
goods and services via the use of natural elements, creative concepts, and unconventional
places. As a result, they make good use of the surroundings.

Frontline, a company that makes flea and tick protection for dogs, put up this clever image of
a dog-insect illusion to appeal to people's emotions by making it tough not to look at it twice!

In Japan, BIC's lawn mowing razor promotion created a big impression on people, prompting
them to wonder if the seemingly impossible task of shearing a lawn with a razor was actually
not so difficult with BIC's razor!

Ambush Advertising:

Ambush refers to a surprise attack carried out by someone hiding in plain sight. Ambush
marketing is when a marketer utilises the word 'ambush' to gain an advantage over its
competitors by snatching the spotlight from them. It is one of the most important tactics in
brand wars since it allows a company to obtain greater exposure and capitalise on an
audience at the expense of competitors.
Nike employed surprise marketing to defeat Adidas during the 2010 FIFA World Cup. The
game's official sponsor was Adidas, although Nike promoted their wares through television
ads and celebrity football players.

Coca-cola was the main marketing sponsor of the 2014 FIFA World Cup, while Pepsi
ambushed its marketing efforts by signing 19 well-known players.

Stealth or undercover marketing:

Undercover marketing refers to marketing that is discreet and 'hidden,' such that it does not
appear to consumers to be a marketing tactic. The concept is to sell things in a non-obtrusive
manner, as in the term "flying beneath the radar."

A person eating an ice cream bar, for example, would not expect the wooden stick to turn out
to be Colgate's doppelganger toothbrush.

Marketing that goes viral or creates a buzz:

Viral or buzz marketing tactics try to maximise a product's or campaign's word-of-mouth

marketing potential. It means to promote in such a way that it captures people's attention and
causes them to talk about it. This increases the target audience's receptivity and aids in the
spread of word about the product.

Tiger Woods PGA Tour 08 was released by EA Games with an unusual shot known as the
Jesus shot, in which Tiger Woods would dive into the water to play the shot. It was intended
to emphasise that in the game, players were able to hit shots while standing on water hazards.
This was eventually found to be done in order to generate excitement for the game.

Grassroots Marketing is a type of marketing that takes place at the grassroots level.

Grassroots marketing refers to marketing tactics that aim to reach out to a small group of
people in order to spread a brand message to a bigger audience and increase its awareness in
the marketplace.

The ALS bucket challenge, in which people were encouraged to pour a bucket of ice water
over their heads and then urge others to do the same, is an example of how grassroots
marketing helped promote awareness about the condition and drove people to donate money
to the cause. The goal was to motivate individuals to become involved and support the cause
from the ground up.

Marketing on the Streets:

The use of unorthodox marketing methods to promote a brand in streets and other public
locations is known as street marketing. The main goal is to leave a lasting impact on the
public by utilising a variety of new ideas. Customizing street components, organising flash
mobs, creatively distributing items or brochures, and organising roadshows or human
animations are all examples of activities.

McDonald's french fry street crossing is a great example of street marketing.

Graffiti Reverse Strategy:

Marketers have been known to take dirt and filth from a street or wall and stencil it to create
reverse graffiti. They leave an all-natural stamp on the audience and make a lasting memory.
The objective is to use the city as a "canvas" on which to spread their message.

Many well-known brands utilise reverse graffiti to promote themselves.

Marketing Through Experiential Learning :

Consumers are engaged through experiential or engagement marketing tactics, which involve
them in the brand's marketing initiatives. They serve to raise brand recognition and create a
bond between the brand and its customers. They are frequently event-driven.

For example, Coca-Day Cola's Valentine's happiness vending machine, which only appeared
when couples went by, was a brilliant technique that helped the brand capture people's hearts!

Guerrilla marketing's characteristics

Guerrilla marketing methods are unique and innovative, and they help a business stand out.
They include an element of surprise and out-of-the-box thinking.

Cost-effectiveness– They demand fewer cost inputs because the idea, not the quantity of
money invested, is the most important aspect.

Authenticity– To make an impression on the target audience, the techniques should be one-
of-a-kind and genuine.

Interactivity– Guerrilla marketing tactics allow firms to interact with their target audience and
better understand their needs.

Guerrilla Marketing's Benefits

Cost-effective– Guerrilla marketing methods are incredibly low-cost to use and do not burn a
hole in the brand's purse. They necessitate less expenditure and greater inventiveness.

Interaction with the audience: These methods enable brands to establish a more personal
relationship with their customers.

Guerrilla marketing tactics rely primarily on word of mouth, which is one of the most potent
weapons in any marketer's armoury. To get people to talk about your products and services,
that is.

Impact creation: Because guerilla marketing tactics are unique, they leave a lasting imprint on
people's minds.

Publicity may snowball: These tactics can help a company expand its reach and reach a wider
audience. They aid in the creation of market awareness and buzz for the company's products.

Guerrilla Marketing's Drawbacks

Potential backlash: Audiences may object to the marketing technique, and the brand may be
forced to suffer the brunt of their hatred. As a result, brands should be mindful that if the
campaign is a failure, the brand image may suffer a boomerang effect.

Strategic risks: Because originality is in the eye of the beholder, guerilla marketing strategies
may be misconstrued. They may be biassed against the brand due to a lack of clarity and an
openness to interpretations. There may also be instances where word of mouth backfires due
to factors beyond the brand's control.

Uncertainty: Because these techniques are shrouded in mystery, brands cannot be certain if
they will have a good impact. They'll have to take a chance and see if it pays off for them.

Legal risks: Brands should exercise caution while implementing these techniques, as well as
their product placements, locations, and other considerations, in order to avoid any legal
issues.

Unforeseen obstacles: There may be instances where the guerilla marketing campaign is
jeopardised due to inconvenient timing or terrible weather.
2.3.2 MARKET FOLLOWER STRATEGIES

The market follower strategy involves copying the market leader's products, services, and
strategies. The cost of inventing a new product, bringing in technology, breaking down
barriers to entry, and educating the market is borne by the innovator or leader. Another
company, on the other hand, could come along and imitate or improve the new product.

Although it is unlikely to overtake the leader, the follower can make a lot of money because it
did not have to pay for the innovation. Many businesses would rather follow the market
leader than challenge it. Many of the runner-up firms do not take on the market leader. When
you are a market leader, there will undoubtedly be market followers, according to the law of
business. Many businesses adopt a market follower strategy. In fact, all organisations'
competencies are so high in today's world that invention is swiftly duplicated or imitated in
many formats.

For example, (1)Apple pioneered multi-touch smart phones, but Samsung now dominates the
market in terms of overall revenue. In today's corporate climate, there are numerous market
follower tactics in use.

(2) We frequently find fragrances and deodorants on the market that seem and smell quite
similar to the original brand, but when examined attentively, they may change in terms of
appearance, colour, or spelling of the brand name.

A number of these tactics are also applied in the apparel industry. Similar apparel and
emblems are used, but they are significantly less expensive and differ slightly from the
leader's offerings.

In a mature market, market followers are unavoidable. Because online marketing has reduced
entry barriers and bigger rewards, it attracts a larger number of market followers. As a result,
companies like Snapdeal, Flipkart, Amazon, and Jabongg have all started one after the other
in online commerce. Of course, Ebay and Amazon were the market leaders. However, they
are now up against fierce competition.

A market follower is a corporation that mimics the actions of the industry leader. A market
follower, on the other hand, is the polar opposite of a maverick. Instead, it sits back and
watches what its competitors, particularly the market leader, do. It only follows the leader's
effective strategies after that.
"A corporation that is not the market leader but decides to maintain its position rather than
compete aggressively to grow its market share."

In a given industry, a market follower may be second to the market leader. It does not want to
lose market share by upsetting the established order.

This style of business never puts the leader in a position of weakness. It may, however,
usually sustain market share at a lower cost of investment than the market leader.

Because the market leader paid for the majority of the groundwork, the follower's investment
is lower.

For one or a combination of factors, it does not challenge the leader. Perhaps it believes that
the leader would win in a fight because it has more resources.

A market follower is a corporation that enters a product market after a competitor has
established a considerable market share.

The company that enters the market after the major one has a much lesser market share to
begin with. However, as a newbie, it has a significant advantage.

It reaps the benefits of the front-marketing runner's efforts. Consumers were educated as a
result of this marketing. To put it another way, the front-runner has already articulated why
customers should buy the product.

The front-runner has already invested money on getting the consumer to comprehend and
want the product.

Example of a market follower

Assume, for example, that Bicycles A Inc. is the first company to sell bicycles in the globe. It
has spent the last five years not just selling bicycles but also heavily advertising them.

Consumers were educated on the advantages of owning and riding a bicycle as part of the
advertising effort. Consumer education takes time and might be expensive.

Bicycles B Ltd. has now entered the market. Bicycles B does not require the same level of
promotion as Bicycles A.

Bicycles B does not need to invest money on consumer education because Bicycles A has
done so already.
As a result, Bicycles B has a significant advantage: cheaper costs. It has no desire to compete
with the market leader.

All Bicycles B cares about is gaining and maintaining a specified market share. It is content
to let the market leader maintain his position.

Market follower methods in video:

The first is one that tries to copy the market leader in as many markets as possible. It never
blocks the leader, though, because it prefers to avoid conflict.

Second, a corporation that tracks you from afar. In comparison to the leader, this company
retains a pricing, distribution, and quality advantage.

Third, a firm that selectively follows. This market follower is unable to duplicate all of the
market leader's operations. As a result, it only participates in some activities with the leader.

A counterfeiter is a person who makes a copy of another person's work.

The best example of counterfeiting is piracy, which involves selling the originals.
Counterfeiting involves thievery and is a black market business technique, whereas cloning
involves production of marginally altered products. Pirated DVDs and CDs of movies and
music are the best example.

These are the four most common market follower tactics in use today. The adaptor and
potentially the imitator have a chance to overtake the market leader in these four categories.
Cloners and counterfeiters, on the other hand, will never be able to overcome the market
leader since they do not have their own manufactured products or brand equity.

Market leaders, on the other hand, are well aware that they will be followed and that market
followers will remain indefinitely. What strategy the market follower employs, whether white
or black, is entirely reliant on the market follower's perspective.

Market follower have four strategies:

1)Adapter

Adapter is a market follower approach for white collar workers. The adaptation variant of
market follower strategy is used by automobiles. Cars such as the Maruti 800, Alto, Zen, brio,
and others are all adapters, taking the finest attributes from one another while changing the
appearance of the vehicle. Similarly, technological adapters such as the Dell laptop and Sony
Vaio laptop are available. These market laggards offer identical goods, but they aim to learn
from their direct competitors. Adapters can quickly get to the top because they can adapt,
learn, and produce a better product than the competitors.

Adapter is a white-collar approach to market follower methods. This is a common tactic used
by many businesses. In this situation, the follower companies' reproduced items are superior,
enhanced versions of the original products that are already on the market.

Adapters are capable of becoming leaders because of their ability to learn, adapt, and adjust.
Automobile businesses employ an adaptation type of market follower strategy.

2) Plagiarism

The best form of flattery is imitation. If you're a goods maker, however, such flattery can eat
into your profit margins. Imitators take advantage of your hard-won brand equity and produce
a product with the same features as yours, but at a lower cost.

The difference could be that the new product is constructed of inferior materials or lacks the
service or guarantee that your brand can provide. Nonetheless, there is a sizable market for
imitation, as many people cannot pay the higher price.

Imitation jewellery is the best and most well-known example of imitation as a market
following technique. The second example is Tata Sky's imitation, where Tata Sky was the
market leader and pioneered the digital television revolution in India, but Videocon, Airtel,
Reliance, and others quickly followed suit.

Imitators take for granted a company's hard-won brand equity. They plagiarise unique
products, give them the same characteristics, and then offer them for less. Imitated products
may not be of high quality or may not provide clients with the same level of service as the
original brand.

Because most people cannot buy the original goods, the market for imitators and their low-
cost imitations grows.

Imitation jewellery, for example, is the best and most common example of imitation as a
marketing approach.

3) The Cloner
Between an imitator and a cloner, there is a silver lining. While an imitator may imitate some
of your product's characteristics, it also keeps its own. Timesjobs.com, for example, is a
knockoff of naukri.com, however timesjobs has its own distinct product features.

However, if you get Rado watches or Gucci bags with Rado spelled as RADA and Gucci
typed as GUCCA, that's copying. Cloning entails creating a product that is identical to yours
but with minor differences. Cloning takes use of well-known brands and produces products
that are nearly identical.

Try to buy Samsung phone clones the next time you're in Bangkok. The similarities between
the original and the clone will astound you.

A clone is an exact replica of an original product with a different branding. Along with the
products, even the product's name and brand design or packaging are reproduced with minor
differences.

When counterfeiting Rado watches or Gucci bags, for example, Rado is spelled RADA while
Gucci is spelled GUCCA.

4) A counterfeiter is a person who makes a copy of another person's work.

The best example of counterfeiting is piracy, which involves selling the originals.
Counterfeiting involves thievery and is a black market business technique, whereas cloning
involves production of marginally altered products. Pirated DVDs and CDs of movies and
music are the best example.

These are the four most common market follower tactics in use today. The adaptor and
potentially the imitator have a chance to overtake the market leader in these four categories.
Cloners and counterfeiters, on the other hand, will never be able to overcome the market
leader since they do not have their own manufactured products or brand equity.

Market leaders, on the other hand, are well aware that they will be followed and that market
followers will remain indefinitely. What strategy the market follower employs, whether white
or black, is entirely reliant on the market follower's perspective.

2.3.3 MARKET NICHER STRATEGIES

A market nicher approach is defined as a small set of clients seeking specific items or
services. They have well-defined wants for which they are willing to spend a higher price for
a specific product (service) or its quality in order to be satisfied.
A niche marketing strategy is one that focuses on selling or advertising a particular product or
service to a small yet productive target group. It only appeals to customers who can relate to
the product or service in question. With this limited group of clients, the corporation aims to
establish a long-term relationship. Some people mistakenly believe that the number of
potential clients targeted determines profitability and success.

A nicher market strategy includes a significant number of potential purchasers who are
diverse, geographically dispersed, and varied in terms of wealth, social standing, and
educational accomplishments. Naturally, many businesses create items or services that appeal
to a broad audience or are intended to gratify a huge number of people, and this is referred to
as mass marketing.

Many people believe that targeting the mass market in any product category has the
advantage of being large, and that achieving three to five percent of the market share would
be enough to run a profitable firm. However, given the enormous market size, there may be
so many companies, each with their own strengths and weaknesses, that cornering even a
small portion of it may be difficult. Even if the market is broad and diverse, a large ad may be
required to stand out in a crowded market.

Nicher Technique's Importance: This strategy is especially beneficial for small businesses
with limited resources and specialised products. However, even huge corporations with mass-
market products can employ this method to target niche markets. Customers are targeted by
businesses based on demographics, interests, occupations, or social causes. Because niche
products are typically high-involvement, it's critical to have a solid marketing and growth
strategy in place.

specialised market strategies:

1. Determining who your target audience is (nicher market benefits)

You've opted to target a certain audience that isn't the general public. The next step is to
determine the age group, geographic region, needs that the product will address, social status,
and other relevant factors. According to Linda Falkenstein, "we have to be really specific
here." And we shouldn't use terms like "teenagers," "young ladies," "young men," "kids," "the
American fast-food market," or "wealthy businesspeople searching for real estate
investments" in our statements.

IT marketing organizations, the financial services industry, and the automotive industry all
look to be too generic to be categorised as niche markets in the B2B world. Companies that
sell low-cost electric automobiles in China could be a smart approach to establish specialised
market benefits. Similarly, teenage girls in India's metro cities wearing premium jeans with
low waist characteristics in the 13-16 age group are a more realistic representation of the
target market than teenage females preferring western-style clothes.

2. How do I choose a focal point? (nicher market benefits)

We need to build the focal area now that we've defined the target audience, and the
description shouldn't be too broad. Many people make the error of focusing on the most
profitable or fastest-growing industry. A pharmaceutical marketing specialist with a decade
of experience may struggle to establish a pharmaceutical manufacturing or retailing business.
His skill set is marketing, therefore sourcing drugs from manufacturers and selling them
under his own brand name would be a good fit. Again, if all medical specialties are targeted,
the investment and dangers are higher. If the focus is solely on cardiac or neuropsychiatric
medications, the market will be narrowed and hence easier to create. It all depends on the
entrepreneur's domain knowledge and experience.

Many individuals jump into domains they've never heard of, and the only reason they do is
because it's exhibiting tremendous income and return on investment growth. Trends change
quickly, and by the time the new company established itself, the niche industry's positive
trend may have shifted.

Furthermore, due to a lack of industry knowledge and competence, a successful trader who
hops on the IT or software bandwagon just because it's hot may burn his fingers. Such a
person would be completely reliant on someone else to operate the firm from the beginning,
making them more likely to lead in the incorrect way or to be duped.

Entrepreneurs should construct a checklist of their core abilities before entering into
something new, according to Falkenstein. They must highlight their strengths, preferred
work, knowledge areas, accomplishments, and life lessons acquired. A new venture's success
is dependent on interest and experience.

3. Determine the customer's requirements (nicher market benefits)

A well-known business model for success is to find a need and fill it. The majority of
business success stories stem from a sharp sense of identifying a problem and providing a
solution. It applies to the software business, where anti-virus software was developed to
address the requirement to remove viruses or Trojans that corrupt files or cause a computer to
malfunction.
Market surveys, informal conversations with potential customers, and secondary data are all
methods for determining consumer demands. There are research firms that produce market
surveys on niche market strategy sectors, and this could be a fantastic place to start when
determining who your target market is. Direct communication with clients is sometimes the
most effective technique.

Initially, just photocopiers were available, but as businesses sought a single device that could
perform all office activities, multi-function electronic devices including the fax, copier,
printer, and scanner were developed.

In India, today's popular toothpaste started out as a powder, but the need for a convenient
paste version in sealed tubes sparked a new market that has now eclipsed tooth powders and
other forms of teeth cleaning products.

4. Look for consumers who have been overlooked (nicher market benefits)

There may be some target audiences that aren't being served by established mass marketers,
and niche marketing can fill that gap. Provided no vendor or grocer is delivering fruits and
vegetables or prepared food in a particular area, for example, there is a strong possibility to
supply such services if the people who reside there have a true demand. The demand for
home delivery of daily usage food and groceries may be higher if it is made up of older
individuals living in high-rise residential units. Similarly, most health and fitness centres
cater to the young; if a certain neighbourhood has a higher number of senior individuals
seeking exercise and fitness, a wellness centre geared on the elderly would do well.

Many real estate professionals may overlook first-time buyers seeking economical but
comfortable housing. If there are no such service providers in a location, the company's
concentration may be on this small segment, where it can capture more than 80% of the
market share, despite the fact that the wider real estate market catering to all categories may
appear more enticing.

5. Put the qualities together in a logical order (nicher market benefits)

According to Falkenstein, once the entrepreneur has identified the target audience, the
attributes, and the need it serves for the client, they must still synthesise the qualities of the
new product or business.
It should adhere to the entrepreneur's long-term vision, there should be a genuine need for the
product, the strategy should be well-thought out, the product or service should be unique in
the market, and there should be the possibility of developing new products around it while
maintaining the core niche market strategy already identified to start a business.

6. Assessment (nicher market benefits)

The next stage is to analyse the synthesising criteria given above once the product blueprint is
complete and the target audience has been determined. Is it in compliance with the given
qualities, and if it isn't in compliance with a few of them, is it better to discard the product
and try something new? The evaluation should assist firms to make the best judgments
possible, rather than being guided solely by hearsay, intuition, and popular perceptions of a
market that may or may not be accurate.

7. Test marketing (nicher market benefits) Before moving ahead with full manufacturing of a
product or service launch, many large corporations debut a new product in certain areas to
evaluate audience response and feedback from sellers. A chosen set of clients is given the
opportunity to acquire and utilise the product in test marketing. To measure consumer
response, big corporations frequently give away free samples or participate in trade shows.
Alternatively, they may arrange mini-seminars to present a product and solicit feedback from
a restricted group of users. After receiving input, it must be assessed and any necessary
changes made.

8. Implementing the idea in the market (nicher market benefits) The actual introduction of the
product into the market is the final stage in the niche market strategy entry procedure. If the
product is a beauty product offered through pharma retail stores, adequate quantities must be
created, orders must be collected from retailers, or the product must be introduced in
collaboration with distributors. This is the most critical step of specialty marketing, according
to Falkenstein. He claims that if enough research has been done, launching the product is just
a calculated risk.

Nicher marketing provides various advantages over mass marketing, particularly for small
enterprises with limited funds. If there are many competitors, a niche market player is more
like a big fish in a small pond, whereas a corporate entity in a broad market is more likely to
be a tiny fish in a big pond.

Because the nicher market strategy is targeted to the needs of the tiny group it is targeting, the
product could have a significant impact on the market because there is a compelling motive
for individuals to purchase. A strong niche market position aids a corporation in defending its
position and entering a new nicher market. On the other hand, the mass market will draw in
new participants as competition heats up, leaving existing firms with a reduced slice of the
pie.

In the nicher market, organic growth is conceivable because customers will spread the word
about the product's benefits and recommend it to others.

A defined market position that targets nicher market benefits, according to marketing experts,
is a definite formula for success that provides short-term prospects, cash flow, and the
potential for long-term business maturation beyond the initial nicher position.

First-time entrepreneurs in nicher markets must be self-motivated, goal-oriented individuals

with the determination and optimism to succeed in the face of adversity. Most of the time,
there is no precedent for the product or service because it is a novel concept. As a result, the
business's success will be determined by the homework and measured risks made.

Finance, tourism, information technology, beauty and fitness, health, agro-processing, food
processing, manufacturing, electronics, electrical engineering, and other industries can all
benefit from nicher market benefits.

Nichers are capable of performing the following specialised roles:

1. The end-user expert

When a company specialises in providing a specific type of customer,

Johnson & Johnson, for example, is a company that only makes infant-care items.

2. Customer experts - When a company only sells to a certain group of clients.

Nobel Hygiene Adult Diaper, for example, launched the adult diaper brand 'Friends.'

It is the market's undisputed leader. This product's target market is quite precise.

3. Geographical expert

When a company sells a product in a specified geographic location.

For instance, Cuba is known for its cigars.

4. Product or product-line specialist A company that focuses solely on a single product or
product line.

Example (i): Ray-Ban is a sunglasses company that only sells sunglasses.

(ii) IKEA sells ready-to-assemble furniture, kitchen appliances, and home accessories, among
other helpful items.

(iii) Decathlon, a French firm, is the world's largest athletic goods retailer, with over 1,500
locations in 57 countries.

5. A job-shop expert

When a company's manufacturing is based on consumer orders. Dell provides consumers

with customised PC solutions. Subway provides clients with personalised sandwiches that
include a variety of items.

6. Price-quality expert

The firm meets the high quality and low price ends of the market. Future Group's Foodhall,
an Indian luxury food supermarket, offers high-quality products at premium rates.

7. Customer service expert

When a company supplies customers with one-of-a-kind or rare services.

Example: (i) Airbnb is a good example.

8. Product Feature Specialist The firm's specialty is the offering of a specific type of product
or product feature.

Example: (i) GoPro, for example, is a company that makes action cameras.

(ii) Marshall Amplification is a British firm that designs and manufactures amplifiers.

It deals with music amplifiers, speaker cabinets, and headphones and earbuds from various
companies. The Marshall guitar amplifiers are well-known all over the world.
2.5 KEYWORDS

 Smart Expansion: Expansion alone for the sake of expansion might be harmful.
Maintaining a tight check on the company's cash flow is vital to its success, as all
strategists recognise. If you use your working capital for expansion, it will have an
influence on even your developing company divisions, requiring you to cut down on
critical activities.

 Contraction defence: This strategy comprises retreating to areas of strength, and

it's typically used near the end of a product's life cycle or after a severe attack on the
organisation. HUL, for example, elected to concentrate on its core business of soaps
and detergents, and as a result, it has risen to the top of the toilet industry.

 Guerrilla marketing : Guerrilla marketing is a style of marketing that employs

nontraditional ways to reach out to customers. Guerrilla marketing is all about
making little but significant adjustments to your brand that keep it in the spotlight
and help it become a household name. If a small business wants to compete with
larger brands, it must first establish itself in a local market before offering pricing
and trade concessions.

 Flank Defense: Flank Defense is a marketing approach in which a market leader

not only provides Position Defense but also establishes an outpost to protect a weak
front or serve as a counter-invasion base. For example, has set a high price per
minute, despite the fact that it is still in its early stages of development, and has spent
that money heavily on advertising, which has helped the company turn around its
fortunes.

2.5 SUMMARY

 Market Challenging Techniques are marketing techniques employed by companies in

third or second place in a market to pursue the market leader or a direct competitor in
order to achieve a larger market share and generate large profits.
  Position defence, flanking defence, pre-emptive defence, counter-offensive defence,
mobility defence, and contraction defence are six common defence strategies
employed by market leaders to defend their market share against rivals.

 Companies that are market leaders profit the most as the market grows. The location
of the product in its lifetime determines the focus of expansion in total markets.

 Markets can be enlarged by increasing usage, adding new uses, or adding new people.
By keeping an eye on their position and rapidly rectifying any errors, leaders can
protect market share. The best way to keep your market share is to continuously
innovating.

 Increased market share can boost a market leader's profitability. Market leaders who
want to preserve their position and expand the entire market defend the current market
area as market share profitability rises.

 Customer bonding is the process by which a company or organisation forms bonds

with its customers. Client bonding is intended to assist businesses in protecting their
current markets and avoiding customer loss due to rising competition. This increases
customer satisfaction, which leads to an increase in customer base via word-of-mouth
marketing.

 A niche market approach involves a large number of potential buyers who are diverse,
geographically separated, and diverse in terms of wealth, social status, and
educational achievements. Naturally, many firms offer products or services that
appeal to a wide audience or are intended to satisfy a large number of people, which is
known as mass marketing.

2.6 LEARNING ACTIVITY

1.What are the market leader's strategies?

___________________________________________________________________________
___________________________________________________________________________

2.Challenger employs which strategy?

___________________________________________________________________________
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2.7 UNIT END QUESTIONS

A. Descriptive Questions

Short Questions:

1. How can a market leader increase the total market size?

2. Can you give me an example of a market challenger?
3. Which marketing method is the most effective?
4. What are the market leader's strategies?
5. Challenger employs which strategy?

Long Questions:

1. In a changing climate, what strategies has the organisation implemented to become

the market.
2. What are some of the ways a market leader might try to keep competitors out of the
market?
3. What strategy should market challengers use to take on market leaders?
4. What are the different types of offensive strategies?
5. How do a market leader's and a market challenger's marketing methods differ?

B. Multiple Choice Questions

1. In terms of competitive positioning, a company that is not the market leader but is
competing hard in its industry to gain market share is categorised as . Choose the
appropriate option.
a. market leader

b. market follower

c. target market

d. market disruptor

2. The corporation with the biggest market share in its industry is classed as
______________, based on competitive positioning. Which of the following is the right
answer?
a. market challenger
b. market leader

c. market follower

d. target market . 

3 The key aim of market leader strategy is to ______________, according to competitive

positions. Which of the following is the right answer?

a. increase market share

b. use an indirect attack

c. use multiple niches

d. a full-frontal assault

4 The type of advertising approach adopted by the corporation to attain its goals is classified
as . Which of the following is the best choice?

a budget for advertising

b a plan for advertising

c a goal for advertising

d. commercial messages

5 When a market challenger attacks the market leader, it is referred to as a market takeover.

a) High-risk plan

b) No-risk strategy

c) Low-risk strategy

d) None of the above

Answers

1-d, 2-c, 3-b, 4-b, 5-a

2.8 REFERENCES

References book

 Market Follower Strategies by Hitesh Bhasin .

 Digital Marketing Courses Published By MBA Skool Team (2017) .
 Business Strategy: Essential You Always Wanted To Know : Second Edition (Vibrant
Publishers)
 Win: the Key Of Principles To Take Your Business From Ordinary to Extraordinary
By Frank Luntz.

Textbook references
 Permission Marketing By Seth Godin.
 Misbehaving : The making of Behavioral Economics by Richard Thaler
 Marketing Challenges : Cases and Excercises By Christopher H.Lovelock Charles
B.Weinberg
 eMarketing : The essential Guide To Marketing In a Digital World By Rob Stroke and
the creative minds of Red & Yellow. (Edition Six)

Website
 https://www.marketingtutor.net/market-challenger-strategies/
 https://freecourses.net/marketing/market-leader-strategies/
 https://www.yourarticlelibrary.com/marketing/market-leadership-strategies-
explained/43538
 https://nscpolteksby.ac.id/ebook/files/Ebook/Business%20Administration/Strategic
%20Marketing%20Planning%20(2009)/13.%20Chapter%2012%20-%20The
%20Formulation%20of%20Strategy%203-Strategies%20for%20Leaders-Followers-
Challengers%20and%20Nichers.pdf
 https://www.ipay88.com/5-best-market-challenger-strategies-that-you-need-to-know/

The concept of brand in its present form is recent. Creating brand is the ultimate aim of
marketing
endeavour. The AMA defines it as: “A brand is a name, term, sign, symbol, or design, or
a
combination of them, intended to identify the goods or services of one seller or group of
sellers
and to differentiate them from those of competitors.” There are three aspects of this
definition.
Firstly, it focuses on ‘What’, of the brand. Secondly, it emphasises on what the brand
‘does’. A
brand can be any combination of name, symbol, logo or trade mark. Brands do not have
fixed
lifetimes. Under the trade mark law, the users are granted exclusive rights to use brand
names
in perpetuity. The economists view of branding “various brands of a certain article which
in fact
are almost exactly alike may be sold as different qualities under names and labels, which
will
induce rich and snobbish buyers to divide themselves from poorer buyers.”
A brand name is used by the marketers because of the roles it can perform. It identifies
the
product or service. This helps consumers to specify, reject or recommend brands. This is
how
string brands become part and parcel of a consumer’s life. Secondly, brands help in
communication. Brands communicate either overtly or subconsciously. For instance, the
brand
‘Fair and Lovely’ communicates what the product does. Similarly, a brand like Johnson
and
Johnson is a symbol of expression of a mother’s love. Finally, a brand becomes an asset
or
property which only the owner has the right to use. The brand property is legally
protected. All
the registered names are the valuable assets of the owners. Coca-Cola brand name is
perhaps the
most valued asset of Coca-Cola Corporation.
Conventionally brands were viewed myopically. They were seen to perform
identification and
differentiation functions. But mere identification may not be a sufficient condition for
survival
in a competitive marketplace. For instance, the brand Premier identified the automobiles
with
the Premier Automobiles Limited very well. At the same time the ‘Premier’ brand
distinguished these cars from rest of the competitors like Hindustan Motor’s
Ambassador, Maruti, and others. Yet the brand went out of the market. Now Premier
cars are not even manufactured. What is essentially missing in the conventional brand
concept is consumer. According to American Marketing Association (AMA) a brand is a
“name, term, sign, symbol or design or a combination of them, intended to identify the
goods and services of one seller or group of sellers and to differentiate them from those
of competitioners”. A brand in short is an identifier of the seller or the maker. A brand
name consists of words, letters and/or numbers that can be vocalized. A brand mark is
the visual representation of the brand like a symbol, design, distinctive colouring or
lettering. Mercedes Benz is a brand name and the star with it is a brand mark.
Essentially, a brand is a promise of the seller to deliver a specific set of benefits or
attributes or services to the buyer. Each brand represents a level of quality. Irrespective
of the fact from whom the brand is purchased, this level of quality can be expected of the
brand. A brand is much more complex. Apart from attributes and benefits, it also reflects
values. Brands do not exist for the sake of identification and differentiation.

Evaluation of Brand

Brands start off as products made out of certain ingredients. Over a period of time,
brands are built through marketing activities and communications. They keep on
acquiring attributes, core values and extended values. Branding makes it easier for
consumers to identify products and services. Brands ensure a comparable quality when
products are repurchased. Brands simplify a consumer’s shopping. Choosing a
commodity is far more complex than choosing a brand. The firms find that brands can be
advertised. The firms also get the advantage of recognition when brands are on the
shelves of the retailers. There is no confusion between branded products amongst
consumers. Branding makes price comparisons difficult. Good brands help build a
corporate image. Branding gives added prestige to the marketer. Branding also gives
legal protection to the seller. Brand loyalty protects a firm against competition. Branding
enables a seller to segment the market. The distributors prefer branding as an
identification tool for vendors, as a convenient tool to handle the products. These are
some of the factors which encourage the sellers to brand their products