Marketing Management

Chapter-11

Dealing with Competition

Marketing Manageme 1
 Identifying Competitors
Market Concept of Competition
 Using the market approach, competitors are companies that
satisfy the same customer need.
 This concept reveals a broader set of actual and potential
competitors.
 Example : A customer who buys a word-processing package
really wants ‘writing ability’ which can be satisfied by pencils,
pens, or typewriters.
 Note : Marketers must overcome ‘marketing myopia’ and
stop defining competition in traditional category terms; like,
Coca-Cola focused on its soft-drink business, missed seeing
the market for coffee bars and fresh fruit juice bars that
eventually impinged on its soft-drink business.

Marketing Manageme 2
 Classification of Firms
On the basis of Market Share
 The companies can play the following roles in the target market
on the basis of market share they possess.

1. Market Leader (Many industries contain one firm that is the

acknowledged market leader. This firm has the largest market
share in the relevant product market; e.g. 40% share)

2. Market Challenger (The firm with the second highest market

share holder after the market leader, e.g. 30% share)

3. Market Follower (The firm with the third highest market share,
e.g. 20% share)

4. Market Nicher (Firms that serve small market segments not

being served by the larger firms; they possess small market
share, e.g. 10% share)
Marketing Manageme 3
 Classification of Firms
On the basis of Market Share

Microsoft Airbus
Market Leader-Computer Software Market Challenger-Aircrafts

Marketing Manageme 4
 Balancing Customer and Competitor Orientations

a. Competitor-Centred Companies (which formulate their

marketing strategies mainly focusing on competitors)
b. Customer-Centred Companies (which focus more on customer
developments in formulating its strategies)
 Note : A company must not spend all its time focusing on
competitors. Customer-Centred Companies are in a better
position to identify new opportunities and set a course that
promises to deliver long-run profits. By monitoring customer
needs, it can decide which customer groups and emerging
needs are the most important to serve, given its resources and
objectives.
 Practically, a company should maintain a good balance of
consumer and competitor monitoring.

Marketing Manageme 5
 Assignment

Marketing Manageme 6