marketing chapter 12

addressing competition and driving growth

growth strategies

• building your market share

• developing committed customers and stakeholders

• building a powerful brand

• innovating new products, services, experiences

• international expansion

• acquisitions, mergers, alliances

• building an outstanding reputation for social responsibility

• partnering with gov and NGOs

growing the core

• strengthening a brand's original, most profitable products or services

• deepen penetration and add premium extensions

• make premium products to achieve sustainable, focused growth

competitive strategies for market leaders

• expanding total market demand: grow the overall market size

• protecting market share: defend against competitors’ attacks

• increasing market share: gain additional share within the market

expanding total market demand

• new customers

• more usage

protecting market share strategies

• proactive marketing: take initiative to stay ahead of competitors

• responsive anticipation: quickly react to emerging threats or opportunities

• creative anticipation: innovate to foresee and shape future market trends

risks of increasing market share

• high acquisition cost: buying share may cost more than it earns

• antitrust risk: aggressive tactics (eg predatory pricing) can trigger regulation

• high economic cost: heavy promos/ads reduce short-term profits

• wrong marketing focus: spending on ineffective campaigns, or poor targeting waste resources

• quality strain: rapid growth can hurt quality or service

market challenger strategies

• a market challenger can attack the market leader, underfunded firms its own size, small local and regional firms, the status quo

• choosing a general attack strategy

  • frontal attack: directly challenge a competitor’s strengths

  • flank attack: target competitor’s weak or underserved areas

  • encirclement attack: attack on multiple fronts at once

  • bypass attack: avoid competitor by moving into new markets or techs

  • guerrilla attacks: small, irregular attacks to harass competitors

market follower strategies

• cloner: copies the leader’s products and marketing closely

• imitator: copies some elements but adds differentiation

• adapter: improves or adapts the leader’s products for new markets

market nicher strategies

• focus on serving small, specialised segments that are overlooked by larger competitors, offering tailored products

• firms with low shares of the total market can become highly profitable through smart niching

• to be a leader in a small market

niche specialist roles

• end-user specialist: focuses on a specific type of customer

• vertical-level specialist: targets a particular stage in the supply chain

• customer-size specialist: serves small, medium, or large customers exclusively

• geographic specialist: focuses on a specific region or area

• job-shop specialist: handles customized, small-batch, or specialized orders

• channel specialist: concentrates on a particular distribution or retail channel

product life cycle marketing strats

• a company’s positioning and differentiation strat must change as its product, market, and competitors change over the PLC

• growth-slump-maturity pattern: standard PLC with growth, slowdown, and maturity stages

• cycle-recycle pattern: product renewed or updated to start a new growth cycle

• scalloped pattern: successive sales waves from adding new product features or targeting new segments

style, fashion, and fad life cycles

• style LC: long-term pattern of adoption for a basic, enduring product design or way of doing things

• fashion LC: medium-term trend adopted by many but eventually replaced by new fashions

• fad LC: short-term craze with rapid adoption and equally rapid decline

marketing strats: pioneering

• being the first to introduce a product, category, or innovation to a market

• advantages

  • recall brand name

  • establish product class attributes

  • captures more uses in middle of market

  • gain first-mover advantage

• disadvantages

  • imitators can surpass innovators

  • once leadership is lost, its rarely regained

marketing strat: growth stage

• to sustain rapid market share growth now

• improve product quality and add new features

• add new models and flanker products

• enter new market segments

• increase distribution coverage and enter new distribution channels

• shift from awareness and trial communications to preference and loyalty communications

• lower prices to attract the next layer of price-sensitive buyers

marketing strats: maturity stage

• market modification: find new users, segments, or uses for the product

• product modification: improve quality, features, or style to renew interest

• marketing program modification: adjust price, promotion, or distribution to boost sales

ways to increase sales volume: market modification

• expand number of users

  • convert non-users

  • enter new market segments

  • attract competitors’ customers

• increase usage rates among users

  • have consumers use the product on more occasions

  • have consumers use more of the products on each occasion

  • have consumers use the product in new ways

marketing strats: decline stage

• eliminating weak products

• harvesting: reduce marketing support and costs while continuing to sell the product for profit

• divesting: withdraw the product entirely from the market or sell it off

marketing in a slow growth economy

• explore upside of increasing investment

• get closer to customers

• review budget allocations

• put forth compelling value proposition

• fine tune brand and product offerings