08 Ippt

8
Competitive Dynamics
Chapter Questions
 How can market leaders expand the total market
and defend market share?
 How should market challengers attack market
leaders?
 How can market followers or nichers compete
effectively?
 What marketing strategies are appropriate at
each stage of the product life cycle?
 How should marketers adjust their strategies and
tactics for an economic downturn or recession?
Copyright © 2013 Dorling Kindersley (India) Pvt Ltd. Authorized adaptation 8-2
from the United States edition of Marketing Management, 14e.
Figure 8.1
Hypothetical
Market Structure
Expanding the Total Market
 New customers
 More usage
More Usage
 Additional opportunities to use the brand

 New ways to use a brand
Protecting Market Share
Responsive anticipation
Creative anticipation
Figure 8.2 Types of
Defense Strategies
Figure 8.3 The Concept of Optimal
Market Share
Market Challenger Strategies
 Define the strategic objective and opponents
 Choose a general attack strategy
 Choose a specific attack strategy
General Attack Strategies
 Frontal attack
 Flank attack
 Encirclement attack
 Bypass attack
 Guerilla warfare
 Attack from regional champions
Specific Attack Strategies
 Price discounts  Improved services
 Lower-priced goods  Distribution
 Value-priced goods innovation
 Prestige goods  Manufacturing-cost
reduction
 Product
proliferation  Intensive
 Product innovation advertising
promotion
Market Follower Strategies
 Counterfeiter
 Cloner
 Imitator
 Adapter
Market Nicher Strategies
Nichers have three tasks:
 Creating niches
 Expanding niches
 Protecting niches
Niche Specialist Roles
 End-User Specialist  Product-Line
 Vertical-Level Specialist
Specialist  Job-Shop
 Customer-Size Specialist
Specialist  Quality-Price
 Specific-Customer Specialist
Specialist  Service-Specialist
 Geographic  Channel Specialist
Specialist
Product Life Cycles
1. Products have a limited life.
2. Product sales pass through distinct stages,
each posing different challenges,
opportunities, and problems to the seller.
3. Profits rise and fall at different stages of
the product life cycle.
4. Products require different marketing,
financial, manufacturing, purchasing, and
human resource strategies in each life-
cycle stage.
Figure 8.4 Sales and
Profit Life Cycles
Figure 8.5a
Common PLC Patterns:
Growth-Slump-Maturity
Figure 8.5b
Cycle-Recycle
Figure 8.5c
Scalloped
Figure 8.6 Style, Fashion, and Fad
Life Cycles
Maintaining a Market Advantage
Factors underpinning long-term market
leadership:
 Vision of a mass market
 Persistence
 Relentless innovation
 Financial commitment
 Asset leverage
 Novelty
Strategies for Developing a
Pioneer Advantage
Growth-Stage Strategies
Maturity-Stage Strategies
 Growth stage: sales growth starts to slow; no new

distribution channels to fill; new competitive forces
emerge
 Stable stage: sales per capita flatten because of
market saturation; future sales depend on population
growth and replacement demand
 Decaying maturity: the absolute level of sales starts
to decline; customers begin switching to other
products
Changing Brand Course
Market Modification
Product Modification
Marketing Program
Modification
Decline
 Declining sales
 Low cost per customer
 Declining profits
 Harvest/Divest
Marketing in an
Economic Downturn
 Invest
 Get close to
customers
 Review budgets
 Use a compelling
value proposition
 Fine-tune offerings
A Compelling Value Proposition
During a recession, a marketer should:
 avoid being overly focused on price reductions
and discounts
 increase—and clearly communicate—the value
their brands offer, making sure consumers
appreciate all the financial, logistical, and
psychological benefits compared with the
competition
 review pricing to ensure it has not crept up over
time and no longer reflects good value
For Review
 How can market leaders expand the total market
and defend market share?
 How should market challengers attack market
leaders?
 How can market followers or nichers compete
effectively?
 What marketing strategies are appropriate at
each stage of the product life cycle?
 How should marketers adjust their strategies and
tactics for an economic downturn or recession?

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 Additional opportunities to use the brand

 Growth stage: sales growth starts to slow; no new

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