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11
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?

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 Figure 11.1
Hypothetical
Market Structure

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 To Stay #1

1. Expanding Total Market Demand

2. Protect Current Share
3. Increase Market Share

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 Expanding the Total Market

1. New Customers
2. More Usage
a. Additional
opportunities to
use the brand
b. New ways to
use the brand

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 New Ways to Use a Brand

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 Protecting Market Share

1. Proactive Marketing
 Responsive anticipation
 Creative anticipation
2. Defensive Marketing

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 Figure 11.2 Types of
Defense Strategies

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 Increasing Market Share
Factors Relevant to
Pursuing Increased
Market Share
•Possibility of provoking
antitrust action
•Economic cost
•Pursuing the wrong
marketing-mix strategy
•The effect of increased
Figure 11.3 The Concept of
market share on actual Optimal Market Share
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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 Define the strategic objective and
opponents
 Attack the market leader
 Attack firms its own size that are not doing the
job and are underfinanced
 Attack small local and regional firms

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 General Attack Strategies
 Frontal attack
 Flank attack
 Encirclement attack
 Bypass attack
 Guerilla attack

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 Specific Attack Strategies
 Price discounts  Improved services
 Lower-priced goods  Distribution
 Value-priced goods innovation
 Prestige goods  Manufacturing-cost
 Product reduction
proliferation  Intensive
 Product innovation advertising
promotion

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 Market Follower Strategies

Counterfeiter

Cloner

Imitator

Adapter

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 Market Nicher Strategies

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 Product Life Cycles

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 Figure 11.5a
Common PLC Patterns:
Growth-Slump-Maturity

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 Figure 11.5b
Common PLC Patterns:
Cycle-Recycle

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 Figure 11.5c
Common PLC Patterns:
Scalloped

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 Figure 11.6 Style, Fashion, and
Fad Life Cycles

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 Strategies for Introduction Stage
and Pioneer Advantage

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 Growth Stage Strategies

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 Marketing Strategies: Maturity
Stage

Market Modification

Product Modification

Marketing Program
Modification

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 Decline
 Declining sales
 Low cost per customer
 Declining profits
 Laggards
 Harvesting & Divesting

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 Marketing in an
Economic Downturn
 Invest
 Get close to
customers
 Review budgets
 Use a compelling
value proposition
 Fine-tune offerings

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 A Compelling Value Proposition

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