Marketing

Strategies for
Leaders

Presented by :- Abhijeet Singh

Mukati , Riteek Bhaisare ,
Vaishnavi Sharma & Yash Agrawal
 Objectives of this presentation

• Understand the threats to a market leader.

• Know how the market leader can expand the total market.

• Identify the defense strategies that may be followed by a market leader.

• Know how the market leader can increase its market share even if market size
remains constant.
 What is a Market leader?

A market leader is a company with the largest market share in an industry that can
often use its dominance to affect the competitive landscape and direction the
market takes. A market leader typically enjoys the largest market share or the
largest percentage of total sales in a given market. It may surpass its competitors
according to other metrics, too, including brand loyalty, perceived value,
distribution coverage, image, price, promotional spending, and profit.
 How Market Leadership works
• A company establish itself as a market leader by being the first to offer a
product or service. Product or service is novel enough to attract a consumer
base and then the company must keep on top of consumer preferences to
maintain leadership.

•  Then company enters a market as a competitor to the first mover(s), it can

aggressively market its own version of the product with differentiated features.

• Competitors that seek market leadership status may invest heavily in market
research and product development, and then use consumer information to
develop attributes that improve an existing product.
 Leader Strategies
1. Expand the total market strategy :- Total market can be expanded by creating
new users , Discovering new uses and ensuring increased uses of the item sold by
a company. Creating new users through market penetration strategy, new-
market strategy, and geographical expansion strategy.

For Example Google has diversified its business into various businesses like
Android, Chrome, Google Map, Google Earth, AdSense, Gmail, YouTube, etc.

Market expansion through Diversification by means of conglomerate &

Concentric concept which helps to increase market share.
2. Defending market share strategy:- Market leader should always keep in mind
that he is always subject to attack by competitors. If he does not work out
strategies to defend himself against potential attacks, he may lose substantial
market share.

There is a saying “The leader applies the military principle of offensive: The
commander exercises initiative, sets the pace, and exploits enemy weaknesses. The
best defense is a good offense”

(a) Position strategy

It involves allocating maximum resources into the current successful brands. To
overcome a position defense an attacker therefore typically adopts an indirect
approach rather than the head-on attack that the defender expects. For example,
HUL increased its ad-spend on Clinic Plus and Sun silk shampoos and gave
heavy promotions through price reduction.
(b) Flanking defense:
This strategy both guards the market position of leading brands and develops
some flank market niches to serve as a defensive corner either to protect a weak
front or to establish an invasion base for counterattack, if necessary.

An ideal example is how HUL successfully nourished its first Rs.100 crore
Indian-made brand Vim in a competitive dish wash market. It was able to
check the attack of competitors through product innovation, attractive public
campaigns, road shows and public relations.
(c) Pre-emptive defense:
This defense strategy maneuver involves the launching of an offence against an
enemy before it starts an offence. For example, Titan launched more brands and
sub-brands to corner the market share of HMT watches in the early 1990s.
(d)Counter offensive defense:
This is a strategy of identifying a weakness in an attacker and aggressively going
after that market niche so as to cause the competitor to pull back its efforts to
defend its own territory .When a leader is attacked, he may base his
counterattack in the attacker’s territory.

This includes:-
(i) Price cuts
(ii) Offensive promotion
(iii) Product improvements
(iv) Sales territory invasion.
(e) Mobile Defense Strategy:- In mobile defense, the leader in addition to
defending his existing territories, expands into areas which are prospective. Such
an expansion may help him to defend as well as attack his competitors in future.
These expanded territories may be used as bases for future offense as well as
defense. Mobile defense may be launched through market broadening as well as
market diversification.
Example: A petroleum industry getting involved in producing coal. Another
Example like:-
Contraction defense:
This strategy involves retrenching into areas of strength and is often used in later
stages of a product life cycle or when the firm has been under considerable attack.
When companies think that it becomes difficult to hold a bigger sales territory in
the long run, then they consider it wiser to pursue contraction defense strategy.
Under this strategy, the firm first finds out the weaker territories, and then
plans to withdraw from those territories gradually. Thus it can concentrate and
mobilize its resources on stronger territories. It can thus consolidate its forces and
fight back more aggressively. Such a contraction should not be confused with
market abandonment. Rather the firm decides to withdraw itself from the weaker
parts in a planned and purposive way.
Expanding the market share strategy
Once market share is known, the leader may take measures to increase existing
share which obviously can increase profitability of the firm. How can a marketing
manager move to increase his market share? The answer lies in the marketing
strategy the firm will pursue.
Market leaders can improve their profitability by increasing their market shares,
like HUL, Procter and Gamble, McDonald’s and Titan.Market leaders who stay on
top have learned the art of expanding the total market, defending their current
territory, and increasing their market share and profitability.
 Conclusion
The Market leader should always keep his eyes and ears open. The leader should
know that it has muscle (strength) as well as fat (weakness). His competitors will
try and do their bests either to cut his muscle or to exploit him by taking
advantage of his fat. If he is unable to hold his muscle and reduce his fat, his
position once may become vulnerable in the face of competitive action. He may
thus lose his position and fall back in the race, whereas he was once leading the
race. He should, therefore, foresee the innovation that may be made by his
competitors, no matter how small they are; spend proportionately to his
competitors to improve product and related services to hold his market position;
should not underestimate the competitors’ strengths and abilities, and do the
best to be most cost effective.
In Strategic Management there is a saying :-

All men can see the tactics whereby I conquer, but what none can see
is the strategy out of which great victory is evolved.
Thank You!