What is a Market Leader

A market leader is a company with the largest market share in an industry that
can often use its dominance to affect the competitive landscape and direction the
market takes. Such a company may be the first to develop a product or service,
which would allow it to set the tone for messaging, define the ideal product
characteristics, and to become considered by the market as the brand that
consumers associate with the offering itself.

BREAKING DOWN Market Leader

A company can establish itself as the market leader by being the first to offer a
product or service. The product or service must be novel enough to attract a
consumer base and then the company must keep on top of consumer
preferences to maintain leadership. If a company enters a market as a competitor
to the first mover(s), it can aggressively market its own version of the product
with differentiated features. Competitors that seek market leadership status may
invest heavily in market research and product development, and then use
consumer information to develop attributes that improve an existing product.

Market Challenger Strategies

Definition: The Market Challenger Strategiesare the marketing strategies adopted by the
firms, either occupying the third or runners-up position in the market, to attack the leader or the
immediate competitor with the intention to capture a greater market share and earn huge
revenues.

Generally, the market challengers are those firms, which have a good reputation in the market
and enjoys a strong financial position. These firms target the market leader or the competitor at
the same level with the objective, to reach the first position in the market or become an industry
leader.

Market Challenger Strategies

The following are the general attack strategies adopted by the market challengers with a view to
becoming a market leader and increase the market share.
1. Frontal Attack: The frontal attack is the direct attack, wherein the market challenger matches with the
competitor’s product, price, advertising, and promotion activities.

The market challenger can even cut the price of the product, provided he convinces the
customers that the quality is not compromised and is as good as the high priced products.

E.g. Amul adopted this strategy when it launched Amul Kool and Amul Masti Dahi at a low
price with the same level of the quality as that of other competitors in the market.

2. Flank Attack: The flank attack means, attacking the competitor on its weak points. Here the market
challenger determines the weak areas of the competitor in terms of two strategic dimensions i.e.
Geographic and segmental.

The challenger finds the areas where the competitor is under performing and then push its
marketing strategies in that area. Also, the challenger spot the segments which the competitor left
untapped and try to cover that segment through its products and services.

E.g. L.G has successfully made use of this strategy by introducing the color tv “ Sampoorna” for
the rural people and outshine the other colored TV players who had a less focus on these areas.

3. Encirclement Attack: The encirclement attack means, attacking the market leader or a competitor from
all the fronts simultaneously, it is the combination of both the frontal and the flank attack.
 Here, the market challenger launches several offensive campaigns i.e. surrounds the competitor
with a varied brand and forcing the competitor to defend himself from all the sides
simultaneously. This strategy is adopted to enjoy the long-term market dominance.

E.g. The FMCG industry applies this attack more aggressively with the intention to outshine the
other. ITC and HUL could be the best examples.

4. Bypass Attack: The bypass attack is the indirect attack, wherein the market challenger does not attack
the leader directly, but broaden its market share by attacking the easier markets.

The challengers can bypass the leader by following any of the strategies viz. Expanding into the
untapped markets, diversifying into the unrelated products, modernizing the existing product
with the invention of technology.

E.g. Pepsi adopted this strategy when it launched its mineral water brand “Aquafina” very well
before the Coca Cola’s mineral water brand.

5. Guerrilla Warfare: The Guerrilla warfare is the intermittent attacks imposed by the challenger to
demoralize the competitor by adopting both the conventional and unconventional means of attack.

E.g. The Pepsi and Coca-Cola follow this strategy aggressively with the intention to harass each
other.When the Coca-cola was the official partner of the world cup, the Pepsi counter-attacked it
by using the punch line “ Nothing official about it”.

Thus, These are the major market challenger strategies that a firm may follow depending on its
market position and the amount of resources held with the firm.

Niche marketing is a targeted marketing plan that focuses on one particular section of the market
that has high potential to connect with a product or service. Instead of casting a wide net in mass-
media and large-event marketing, niche marketing zeroes in on strategically selected venues and
media platforms that have high concentrations of these targeted consumers

Market Follower strategy’ is a strategy of product imitation. The innovator bears the
expense of developing the new product, bringing in the technology, breaking entry barriers
and educating the market. However, another firm can come along and copy or improve on
the new product.
Market Follower Strategy
Although it probably will not overtake the leader, the follower can achieve high profits
because it did not bear any of the innovation expense.Many companies prefer to follow
rather than challenge the market leader. Many runner-up companies do not challenge the
market leader.

The four follower strategies are as given below:

1. Counterfeiter: Copies the leader’s product and packages and sells it on the black
market. E.g.pirated music/ movie CDs
2. Cloner: Copies the leader’s products as it is as well as name, packaging with slight
variations.
3. Imitator: Copies some of the things from leader’s product but maintains difference in
packaging, and other factors.
4. Adaptor: Launches improved products over that of the innovator’s.
Market-Driven strategy is the long term planning of a business to provide the maximum value or
advantages to the customers. The main target of the market driven strategy is to provide
maximum value to the customers.

characteristics of market driven strategies include:

1. Becoming market oriented.
2. Determining distinctive capabilities.
3. Finding a match between customer value and organizational capabilities.
4. Obtaining superior performance by providing superior customer value.
Although it is a highly promising strategy, yet it is argued that a long-term commitment is
crucial in order to develop these strategies.
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1. Becoming Market Oriented:
A market-oriented organization always gathers information about its customers, competitors,
and the markets; analyze it from a total business perspective, decides how to deliver superior
customer value, and finally takes actions to provide value to customer

2. Distinctive Capabilities:
Identifying an organization’s distinctive capabilities is a crucial part of market-driven
strategy. Capabilities can be defined as “complex bundles of skills and accumulated
knowledge, exercised through organizational processes, that enable firms to coordinate
activities and make use of their assets
3. Creating Value for Customers:
Superior customer value occurs when the buyer has a very positive use experience compared
to his/her expectations as well as the value offerings of competitors

PESTLE Analysis
PESTLE analysis is a mnemonic, it stands for – Political, Economic, Sociological,
Technological, Legal and Environmental analysis. It is basically all the elements of the
macro environment of a business.

The study of this environment helps us the factor that is likely to affect our business in
the near future. And this can help us prepare for the upcoming changes.
PESTLE analysis is a multi-faceted business tool. So if the study is not focused on an
issue but is diluted, then the results are vague and ambiguous.

So it is important that the analysis is done for a specific project, vertical, product or
purpose. This will give appropriate results that can be useful in taking business
decisions. Now let us analyze the individual aspects of the PESTLE analysis.

Political Factors

This is actually the degree of government involvement in the economy. If the

government interferes with the economy to any degree then these factors become of
importance.

Such political factors include government policies and laws, taxation policies, budgets,
international trade laws, trade restrictions, and even environmental laws in place. So
any changes in these or any new legislation in the future will affect business.

Economic Factors

Almost all changes in the economy of a nation have a significant impact on the
business. Economic factors such as Gross Domestic Product (GDP), average National
Income, inflation rate. the growth rate of the economy, prevailing interest rates of the
market etc. have a direct effect on the profit of a business.

These economic factors are inclusive of both micro and macroeconomic factors.
Macroeconomic factors relate to the economy as a whole like the market demand,
interest rate, taxation policies, total expenditure etc. Microeconomics focus on single
households – disposable income, customer choices, and preferences etc.

Social Factors

These are the social and cultural factors of a demographic. They include the age,
gender ratio, population growth, urban-rural divide, employment rates, health statistics,
preferences etc of a given population. These are all factors that affect the sale of the
product or service and hence the profit of a business.

Technological Factors

This is actually one of the most important factors of the PESTLE analysis. It involves
the presence and innovation of technology and the growth of technology in a market.
This advancement of technology can apply in three basic ways – improvement or the
advent of technology in producing the goods, distributing the goods or in marketing
the goods. So the business must keep up with the evolving technology to stay with the
times.

Environmental Factors

In the last two decades or so, these environmental factors have gained a lot of
importance. Businesses are now more conscious about the pollution they may cause
and their carbon footprint.

They wish for growth but it must be sustainable growth, not at the cost of the
environment. So new environmental laws, Eco-friendly practices, technology to
control pollution etc are all factors they need to mindful of.

Legal Factors

These factors include any changes in laws and legislation, health and safety guidelines,
guidelines for equality and safety of women, consumer rights, ethical standards for
advertisement etc.

INTERNAL COMPETENCIES

1. Competency level
A. Core competency- Core competencies are the resources and/or strategic
advantages of a business, including the combination of pooled
knowledge and technical capacities, that allow it to be competitive in
the marketplace. In other words, core competencies are what the
company does best and consist of the combined activities,
operations, and resources that distinguish the company from
competitors.
B. Distinctive Competency- Distinctive competence refers to some
characteristic of a business that it does better than its competitors.
Because the business is able to do something better than other
businesses, that business has a competitive advantage over other
businesses.
C. Strategic Competency-Strategic competence, an aspect of communicative
competence, refers to the ability to overcome difficulties when communication
breakdowns occur (Celce-Murcia, Dörnyei & Thurrell, 1995). Rather than viewing
communication breakdowns as a deficit, teachers should take them as an opportunity
for learners to develop their strategic competence.
 D. Threshold competencies include basic knowledge, skills, traits, motives, self-image and
social role and are essential for performing a job. Without these, some areas of
performance will be substandard. To move beyond minimal performance,
additional competencies are required.

The Shell Directional Policy Matrix (DPM)is another refinement upon the Boston Consulting
Group (BCG) Matrix. Along the horizontal axis are prospects for business sector profitability, and
along the vertical axis is a company’s competitive capability. Business sector profitability includes
the size of the market, expected growth, lack of competition, profit margins within the market and
other favorable political and socio-economic conditions. On the other hand company’s competitive
capability is determined by the sales volume, the products reputation, reliability of service and
competitive pricing. As with the GE Business Screen the location of a Strategic Business Unit
(SBU) in any cell of the matrix implies different strategic decisions. However decisions often span
options and in practice the zones are an irregular shape and do not tend to be accommodated by
box shapes. Instead they blend into each other.

Each of the zones in Shell’s Directional Policy Matrix is described as follows:

1. Divest: SBU’s running in losses with uncertain cash flows. They should be divested as the situation
is not likely to improve in the near future. These liquidate or move thee assets.
 2. Phased withdrawal: SBU’s with weak competitive position in a low growth market with very little
chance of generating cash flows. They should be phased out gradually. The cash realized should
be invested in more profitable ventures.
3. Double or quit: Gamble on potential major SBU’s for the future. Either invests more to use the
prospects presented by the market or else better to quit the business.
4. Custodial: SBU’s are just like a cash cow, milk it and do not commit any more resources. The
corporate has to bear with the situation by getting help from other SBU’s or get out of the scene
so as to focus more on other attractive business.
5. Try harder: SBU’s could be vulnerable over a longer period of time, but fine for now. They need
additional resources to strength their capabilities. The corporate try harder to exploit the business
prospects thoroughly.
6. Cash Generator: Even more like a cash cow, milk here for expansion elsewhere. SBU’s may
continue their operations, at least for generating strong cash flows and satisfactory profits. No
further investments are made.
7. Growth: Grow the market by focusing just enough resources here. These SBU’s need funds to
support product innovations, R&D activities etc.
8. Market Leadership: Major resources are focused upon the SBU. It must receive top priority.

Definition of 'Market Leader'

Definition: A market leader could be a product, brand, company, organisation, group name
which has the highest percentage of total sales revenue of a particular market. Market leader
dominates the market by influencing the customer loyalty towards it, distribution, pricing, etc.

Description: Market leader can be attributed to a firm which has the largest market share in a
given industry. The term could also be ascribed to a firm which has the highest profitability
margin as well. The market share is calculated by dividing the volume of goods sold by a
particular firm by the total number of units in the market. Market leadership as a concept holds
much relevance in the internet age because over a period of time we have seen large number of
companies becoming market leaders.

Market leader often enjoys the first -mover advantage in new markets. Let’s look at some
examples of market leaders in the digital space. Microsoft was the first company to launch
operating system (Windows) and web browser (Internet Explorer) in the market. Apple as a
company was the first one to introduce the concept of portable media device in which music can
be stored on a drive, ipod. Market leadership is not about sales and dominance but it is more
about how relevant the product is for the audience. Apple generates more revenue by selling
iPods compared to other manufacturers who are selling MP3 players. It is all about innovative
ideas which will help the company to connect with the relevant audience. The company tries to
introduce those products in the market which can add value to the customer. Market leaders
often unveil products which can redefine the customer experience in terms of product quality,
longevity, ease of operating that product etc

Top 10 Factors Influencing Marketing

This article throws light upon the ten factors influencing the marketing concept of a
firm. The factors are: 1. Population Growth 2. Increasing Households 3. Disposal of
Income 4. Surplus Income (discretionary income) 5. Technological Development 6.
Mass Communication Media 7. Credit Purchases 8. Changing Social Behaviour 9.
Transport Facilities 10. Increase Competition.

Factor # 1. Population Growth:

The increase in population naturally increases the demand too. Markets are made up of
people.

Increase in population causes increasing the markets, increasing the consumers, who
have increased demand for goods, in kinds, varieties, preferences etc.

Thus the producers have to meet the changing demands of people.

Factor # 2. Increasing Households:

The growth of demand for household products is more than it is to the total population
at any time. Joint family system has become unpopular because of many reasons. Most
of the families are sub-divided and this increases the number of families and their
demands.

Example:
Automobiles, refrigerators, electrical appliances, television sets etc.

Factor # 3. Disposal of Income

Automation in industries, births of many new firms etc. open the door of employment.
Thus people have increased their income and in turn aim for more satisfaction and more
comforts. When the income continues to increase, the purchasing power also increases.

Factor # 4. Surplus Income (discretionary income):

The people have surplus income left after meeting the expenses on essential items. This
surplus amount will be spent on non-necessary products or luxury goods. Such items are
selected by people, if they can give satisfaction to their needs and desires.
Factor # 5. Technological Development:
Science and technology improves day by day. New inventions of products take place
often. None will have the guarantee that his products will always possess good demand
in the market. Some technological advancement may outmode the existing products; in
turn the whole industry may come to a standstill.

People always prefer to have the latest model. A number of new products, in the place of
old ones, are being introduced into the market often. Consumers are at liberty to choose
from the new products. Therefore, consumer-oriented marketing system is essential.

Factor # 6. Mass Communication Media:

The growth of mass communication media-Newspapers, magazines, radio, television
etc. facilitates the buyers to learn about the new products available for sale. The buyer
gets information about the new products, faster and more effectively before the products
come to the market.

Factor # 7. Credit Purchases:

Credit purchases through hire-purchase schemes and instalment schemes are common
today. Credit purchase pushes sales. The customers can enjoy the facilities and this
widens the market.

Factor # 8. Changing Social Behaviour:

The social pattern is changing. It is essential for any product or service to keep pace with
the change in order to survive in the market. The western style has tremendously
affected in developing countries, including India. The demand for electronic
entertainment items and consumer products have changed tremendously in the last 20
years.

Factor # 9. Transport Facilities:

The fast and easier transport facilities have resulted in urban-rural interaction regularly
and also global tours are becoming very common. These have helped to change
consumer’s attitude towards marketing activities. The demand for frost free
refrigerators, high quality soaps, moisturizing creams, fuel-efficient cars, battery
operated machines; remote controlled electronic machines are increasingly in demand
everywhere. Buyers and consumers are searching for better products.
Factor # 10. Increase Competition:
With rapid industrialization, the manufacturing base gone up and a large number of
organisations are manufacturing consumer products and giving rise to competition.
Consumers have now the option to select a suitable product or brand which could meet
their requirements. Thus, the marketing activity of all competing products has become
an important day-to-day matter and the same cannot be ignored.