11

Dealing
with Competition

Marketing Management, 13th ed

 Chapter Questions
• How do marketers identify primary
competitors?
• How should we analyze competitors’
strategies, objectives, strengths, and
weaknesses?
• How can market leaders expand the
total market and defend market share?

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 Chapter Questions (cont.)

• How should market challengers attack

market leaders?
• How can market followers or nichers
compete effectively?

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 Progressive Competes on
Marketing Programs

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 Figure 1.1 Five Forces Determining
Segment Structural Attractiveness

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 Identifying Competitors

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 Industry Concept of Competition

• Number of sellers and degree of

differentiation
• Entry, mobility, and exit barriers
• Cost structure
• Degree of vertical integration
• Degree of globalization

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 Figure 11.2 Strategic Groups

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 Figure 11.4 A Competitor’s
Expansion Plans

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 Table 11.1 Customer Ratings of
Competitors on Key Success Factors

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 Strengths and Weaknesses

Share of market

Share of mind

Share of heart

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 Steps in Benchmarking

• Determine which functions or

processes to benchmark
• Identify the key performance variables
to measure
• Identify the best-in-class companies
• Measure the performance of best-in-
class companies

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 Steps in Benchmarking (cont.)

• Measure the company’s performance

• Specify programs and actions to close
the gap
• Implement and monitor results

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 Table 11.2 Market Share,
Mind Share, and Heart Share

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 Figure 11.5
Hypothetical Market Structure

10% 20% 30% 40%

Market Market Market Market
Nichers Follower Challenger Leader

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 Gap Tried to Appeal to
Too Broad a Market

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 Expanding the Total Market

New customers

More usage

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 Figure 11.6 Six Types of
Defense Strategies

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 Figure 11.7
Optimal Market Share

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 Factors Relevant to Pursuing
Increased Market Share

• Possibility of provoking antitrust action

• Economic cost
• Pursuing the wrong marketing-mix
strategy
• The effect of increased market share
on actual and perceived quality

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 Other Competitive Strategies

Market
Challengers

Market Market
Followers Nichers

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 Market Challenger Strategies

• Define the strategic objective and

opponents
• Choose a general attack strategy
• Choose a specific attack strategy

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 General Attack Strategies

Frontal Attack Flank Attack

Encirclement
Bypass Attack
Attack

Guerrilla Warfare
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 Pepsi buys Gatorade in a
Bypass Strategy

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 Specific Attack Strategies

• Price discounts • Improved services

• Lower-priced goods • Distribution
• Value-priced goods innovation
• Prestige goods • Manufacturing-cost
• reduction
Product proliferation
• Intensive advertising
• Product innovation
promotion

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 Market Follower Strategies

Counterfeiter

Cloner

Imitator

Adapter

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 Market Nicher Strategies

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 Niche Specialist Roles

• End-User Specialist • Product-Line

• Vertical-Level Specialist
Specialist • Job-Shop Specialist
• Customer-Size • Quality-Price
Specialist Specialist
• Specific-Customer • Service-Specialist
Specialist • Channel Specialist
• Geographic
Specialist

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 Balancing Orientations

Competitor- Customer-
Centered Centered

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 Marketing Debate

 How do you attack a category leader?

Take a position:
1. The best way to challenge a leader is to
attack its strengths.
or
2. The best way to attack a leader is
to avoid a head-on assault and to adopt
a flanking strategy.

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 Marketing Discussion

 Pick an industry.
 Classify firms according to the
four different roles they might play.
 How would you characterize the
nature of competition?
 Do the firms follow the principles
described in this chapter?

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