<COURSE NAME>

<SEMESTER>

STRETERGIC MANAGEMET
M-306
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CONTENT

UNIT - 1: Marketing situation analysys & Analysing competators stretergies.........................3

UNIT - 2: Understanding stretergies-Market leader, Market Challenger, Mrket Nicher .......52

UNIT - 3:

UNIT - 4: Product differentiation & Brand Positioning with Competitive pricing…….

UNIT - 5: Competitive Advantage & Role of Sales promotion in competitive marketing….

YNo table of contents entries found.

UNIT – 1: ANALYZING MARKET SITUATION AND

COMPETITOR’S STRATEGIES
STRUCTURE
1.0 Learning Objectives
1.1 Introduction
1.2 Analysis of Market Situation
1.2.1 Market Analysis- An Overview
1.2.2 Purpose for analyzing the Market Situations
1.2.3 The 5 Cs of Market Situation Analysis is as follows
1.2.4 SWOT Analysis
1.2.5 Advantages of Market Analysis
1.2.6 Disadvantages of Market Analysis
1.2.7 Internal Market Situation Analysis
1.2.8 External Market Situation Analysis
1.2.9 Other Methods of Market Situation Analysis
1.2.10 Design of Market Situation Analysis

1.3 Analysis of Competitor Strategies

1.3.1 Understanding the Competitors
1.3.2 Importance of analyzing competitor strategies:
1.3.3 Different types of Competitors
1.3.4 Elements of Competitors analysis
1.4 Estimating competitor’s reaction pattern and competitive position.
1.4.1 Competitors based on reaction patterns
1.4.2 Competitors Competitive Position.
1.4.3 Principles of competitive positioning
1.5 Summary
1.6 Keywords
1.7 Learning Activity
1.8 Unit End Questions
1.9 References
1.0 LEARNING OBJECTIVES

After studying this unit, you will able to:

 Purpose of market situation analysis.

 Analyze the market condition and requirement.
 Advantages of analyzing situation of market.
 Who the competitors are?
 Analyze the competitor’s strategies.
 Study the reaction pattern of competitors
 Competitive position

2.0 INTRODUCTION

We've come across the terms market and marketing many times in business world. Both
are similar sounding terms and refer to the same topic. 'Market' and 'marketing,' on the other
hand, are two distinct concepts that are related to one another. Market evaluation and
situation analysis give you a "road map" to help you make better decisions as you carry out
your market development strategies. Marketing research is the function that connects the
consumer, customer, and general public to the marketer through information that is used to
identify and define marketing opportunities and problems, generate, refine, and evaluate
marketing actions, track marketing performance, and improve understanding of marketing as
a process. While developing the market strategy it is necessary to do market research. Market
research is the process of acquiring, analyzing, and interpreting data in order to assist in the
resolution of marketing problems. We employ market research for a variety of reasons. It
assists us in making informed decisions, such as establishing the feasibility of introducing a
new product before investing time and money into it. With market situation analysis it is
important to analyze the competitor’s. Competitive market research focuses on identifying
and analyzing key market indicators that might help you distinguish your products and
services from those of your competitors. Comprehensive market research lays the
groundwork for a successful sales and marketing plan that sets your firm apart from the
competition.
Marketing as a commercial discipline is a relatively new development. Exchanges have
occurred throughout history, from the period of barter to the contemporary complicated
marketing system. Over decades, marketing concepts have evolved significantly. Even after
marketing was elevated to the status of a full–fledged business discipline.
More than any other corporate activity, marketing is concerned with the client. It is centred
on the consumer. Establishing relationships based on the perceived worth of the consumer
and Many individuals believe that marketing is synonymous with selling and advertising.
And it's understandable — we're inundated with television advertising, newspaper
advertisements, direct mail offers, sales calls, and online solicitations on a daily basis.
However, selling and advertising are merely the tip of the iceberg when it comes to
marketing. They are two of several marketing roles and are frequently not the most critical.
There are two marketing principles that provide us with a comprehensive understanding of
marketing. They are as follows:
A) The conventional marketing idea.
B) Contemporary marketing idea
Marketing, in the conventional sense, refers to the activities that result in the transfer of
ownership of commodities and the management of their physical distribution. It encompasses
all operations aimed at ensuring the flow of products and services from producers to
consumers, as well as those aimed at the establishment of time, place, and possession utilities.
However, marketing as a modern idea is more than a physical process or collection of
actions. It embodies a distinct corporate concept that has arisen in recent years: customer
creation. Here, the client is both the catalyst and the objective of all marketing activity.
Marketing is concerned with determining and satisfying personal and social needs. It is
defined as profitably addressing customer demands. Customer creation entails identifying
consumer wants and developing the firm to suit them. In other words, a business takes
deliberate and coordinated attempts to ascertain what the community's members need and
how it may best provide those requirements. It generates what the customer demands, in the
quantity required, at a price the consumer is willing to pay for the satisfaction delivered in the
form of goods and services, via channels that meet the consumer's need for goods and
services. Thus, the current philosophy of marketing is centred on the consumer and his or her
delight. As a result, it is referred regarded as a consumer-oriented idea. Satisfaction is
important to contemporary marketing. The pricing methods used, the promotional techniques
used, the design, shape, and size of the product, and the location of sales are all determined
after researching the customers' lifestyles, cultures, purchasing behaviours, and media
consumption habits, among other things.
Marketing brings together manufacturers and customers for mutual gain. Production is
pointless if the things created are not distributed to customers via an effective marketing
strategy. When we look around, we see marketing in the advertising that fill our television
sets. brighten our periodicals, fill our mailboxes, and provide life to our online sites. At home,
at school, at play, and at work. We encountered marketing in nearly everything we do. All of
this is facilitated by a vast network of people and activities vying for our attention and
dollars.
Marketing management analysis is the process of a company's marketing components being
decided, planned, and controlled in terms of the marketing idea, somewhere inside the
marketing system. Before delving into some of the process's finer points, some background
on two points will be useful.
The marketing notion is easy in theory, but putting it into practice is sometimes difficult, if
not impossible. The above-mentioned comment by Adam Smith is most congruent with it.
The idea is that if a corporation openly integrates the many components of its marketing
operations in order to suit the preferences of its consumers, it may more successfully fulfil its
own aims.
To someone who is inexperienced with corporate practice, the necessity for adopting the
notion and the ability to do so appear to be so self-evident that they don't need to be
discussed.

Within the marketing system, this marketing management process takes place "somewhere."
After seeing the marketing system shown, you realize that "somewhere" may be any of the
many, many enterprises that make it up—manufacturing, wholesaling, and retailing. Every
single one of them employs marketing management.

Assume, for simplicity's sake, that we're just interested in the manufacturing level in the
sense that the manager we're looking at works in a marketing management job there.
Situation analysis requires an examination of an organization's internal environment, or
microenvironment. The state of an organisation, whether it is a business or any other sort of
organisation.
The internal and external dynamics of an organisation are expressed in terms of its internal
and external dynamics. environmental variables When both forms of data are analysed, a
conclusion is reached. management can have a thorough grasp of the internal and external
surroundings the organization's overall situation When it comes to the external world, Factors
that exist outside of the organisation are depicted.The exterior circumstances, as well as the
interior environmental elements, depict the internal situation.the organization's circumstances
Internal environmental analysis can be beneficial.Managers determine an organization's
internal strengths and shortcomings. In terms of numerous internal environmental elements,
the organisation. Each factor in various sections of the organisation is investigated.
The hard truth of today's more competitive marketplace cannot be avoided. Every customer
that a company wants to recruit is a competitor. The company competes for the attention and
engagement of customers. It competes for their time and attention during the purchasing
process. It fights for consumers' willingness to cope with the technological complexity
inherent in many goods and the resulting demand for services, as well as the dollars they are
prepared to pay on a product or service. A terrific concept or a distinctive product are not
prerequisites for successful consumer marketing.
Consumers who desire or need the goods and have the financial means to purchase it are the
starting point for marketing. These customers, on the other hand, don't just buy a product;
they buy a market offering, which is a collection of values. A product, product services,
transaction services, brand, packaging, pricing, credit terms, price reductions, advertising,
personal sales help, shop or company location availability, inventory selection, and
transportation services are all part of that market offering. The key problem for the marketing
executive in building a successful competitive position in the European consumer
marketplace today is combining and matching these many parts of the market offering into an
adequately integrated and unified whole.
But, before any of this can happen, the company must compete for the attention of customers
and establish a recognisable comparative position in their thoughts that is consistent with
their cultural background.

1.2 Analysis of Market Situation

1.2.1 Market Analysis- An Overview

A market analysis is a quantitative and qualitative valuation of a market. The aim of market
analysis is to recognize the important characteristics of a market and to find out the market
structure at a certain point in time. Analyzing the market situation can help you to understand
your target audience and the conditions of the market.  This can help you to differentiate
yourself from the competition and be distinct you in a crowded market. A market analysis
provides information about other industries, customers, your competitors, and other market
variables.  Market situation analysis involves assessment of the situation and trends in a
specific market. If you are in the process of business planning and to launch a new product in
a market, you need to assess the situation in that market. The purpose of this is to help the
business determine the areas where marketing efforts are most needed, and to enable you to
make your business plans and implement them accordingly. Market Situation Analysis should
be based on cold, hard, verifiable facts.
The 'where are we now' situation analysis or audit is a method for a corporation to determine
its own strengths and weaknesses in relation to external opportunities and dangers. As a
result, it is a method of assisting management in choosing a position in that environment
based on existing facts.
A company's external environment encompasses a wide range of factors. The environment is
said to be divided into two parts: the macro-environment and the micro-environment. Social,
cultural, legal, economic, political, and technical elements make up the macroenvironment.
Strategic marketing planning is critical in order to design the most appropriate marketing
strategy to build and sustain Shloer in a continuously changing marketplace, taking into
account elements such as demography, green concerns, and bigger societal and
environmental challenges.
Both the company's internal environment (controllable factors affected by management) and
the external environment in which it works (uncontrollable variables management cannot
influence) must be investigated, as shown. The information gathered is then organised and
evaluated using the SWOT analysis, which matches the company's vulnerabilities and
strengths to the risks and opportunities it faces in the environment. As a result, the firm may
build on its strengths, mitigate any weaknesses, seize market opportunities as they emerge,
and avoid any threads as far as conceivable pressures are considered. Other environmental
restrictions, such as market structure, suppliers, consumers, market trends, public, and
competition, are included in the Micro-environment.
The internal environment, which includes an evaluation of the company's marketing mix
(product, price, site, promotion) and service mix (people, process management, physical
evidence), is also critical. Other criteria covered in an internal environment analysis include
sales, profitability, market share, and customer loyalty.
Internal auditing studies a company's own resources and makes recommendations on its
strengths and deficiencies. Internal factors are mostly under the control of the firm, and as a
result, organizations should make every effort to avoid any difficulties that may arise as a
result of them. Internal organizational competencies are clearly demonstrated to be important
in product creation and strategic formation.
After taking into account both internal strengths and weaknesses as well as external
environmental effects (opportunity and dangers), every organization is in a position to design
an efficient marketing plan. Failure to comprehend both external and internal capacities may
result in total failure.

The following dimensions are commonly used in market analysis:

1. Market size (actual and potential): The size of important submarkets; the prospective
market includes the use gap.
2. Market growth rate: The forces that drive sales, as well as growth rate projections. 3.
3. Profitability of the market: Existing rivals, supplier power, customer power,
replacement products, and potential entrants all influence the level of competition.
4. Cost structure: Examine the value added by the production stage and track how it
changes over time, as well as the impact of the learning curve.
5. System of distribution
6. Developments and trends
7. Critical success factors: What abilities and competences are required today and in the
future to compete?
 8. The market's competitive nature: the type of competition among current enterprises,
whether new entries or the availability of substitute products pose a danger, and how
influential consumer and supplier groupings are.

Fig: 1.2.1 Market Analysis

1.2.2 Purpose for analyzing the Market Situations:

Before enlarging a marketing strategy, it is important to conduct a market situation analysis

to determine the health of your business. This analysis serves as a helpful tool for
determining your business's strengths and weaknesses, and any opportunities and threats
(SWOT) which may affect its health. The results can be eye-opening in terms of what's truly
going on in your company and can aid in determining your company's market strategy. An
analysis can reveal where your company is in the present market, what is working, what can
be improved, and where possibilities to profit and develop exist. Develop a marketing plan,
find market gaps your company can fill, advance new technology, and respond to rival
changes using a scenario analysis. Adapt the report as needed to get the results you want.

1.2.3 The 5 Cs of Market Situation Analysis is as follows:

The following are the four primary factors to consider when assessing the current market
situation:

 Company – This is an examination of the business or company's internal workings,

such as its short- and long-term aims and objectives. It also looks at the company's
strengths and shortcomings, as well as its market share.
 Fig: 1.2.3 5 C’s of Marketing

 Consumer – Because this time the focus is on the customer, demographics such as
type, number, age, and so on will be examined. It will dig even further, considering
the value drivers that motivate customers to behave in a certain way. The
investigation will also examine into the decision-making processes of the participants
in the study.
 Competitor – Because competition is an important part of any firm, it is necessary to
incorporate it in the market condition study. The company's and its shares' market
positions will be compared to those of competitors in this examination. It will also
have to determine the competitors' strengths and shortcomings.
 Collaborators - In addition to the company and its competitors, there are a number of
additional parties who play an important, if indirect, role in the company's activities.
Other players such as distributors, suppliers, consultants, subsidiaries, and joint
ventures, to name a few, are among the collaborators.
 Climate - When assessing the climate, concentrate on external elements that may
have an impact on how you do business. Industry trends, societal trends, legal trends,
and new or developing technology will all be discussed.

1.2.4 SWOT Analysis:

 Fig: 1.2.4 SWOT Analysis

It also contains a business, i.e. its strengths, weaknesses, opportunities and the threats that it
faces.  

 Strength: Strength is referred to all the positive contributions to the favorable result
of an organization. These contributing aspects can be tangible or immaterial, but they
must be under the company's control. Human resources, capital resources,
infrastructure, brand recognition, and other factors should all be taken into account.
 Weaknesses: Weaknesses are defined as any internal elements that prohibit an
organization from attaining its goals. In other words, the factor which may jeopardize
the success of the company is a weakness. For example, employees can be the greatest
asset of company if they are skillful, well-trained, and motivated to their job. On other
side, workers without ample skills and motivation will be a big obstacle for the
company to reach the top position. Similar to strengths, there are some elements that
should be reviewed to find out weaknesses as early as possible.
 Opportunity: An opportunity is defined as an external factor that has a favorable
impact on or contributes to a company's success. For example, if you're an online
retailer, the rise of mobile devices is a boon to your business's ability to expand and
earn consumer recognition.
 Threat: Threats are external factors that exist as disadvantages, requiring
businesspeople to devise effective strategies for dealing with them or change their
plans to overcome these obstacles. For example, a rapid economic downturn may pose
a challenge for businesses, as they will have to work harder to get people to consume
their goods. Some hazards even cause businesspeople to abandon their plans to attain
certain objectives.

1.2.5 Advantages of conducting Market Analysis:

A marketing study can help you manage risk, spot developing trends, and forecast income.
You may utilize a marketing analysis at various stages of your business, and it's even a good
idea to do one once a year to stay on top of any important market changes. A thorough
market study is frequently included in a business plan since it helps you gain a better
understanding of your target audience and competitors, allowing you to develop a more
targeted marketing approach.

Other significant advantages of completing a market analysis include:

 Risk reduction: Knowing your market may help you decrease business risks since
you'll have a better awareness of important market trends, key industry players, and
what it takes to succeed, all of which will inform your business decisions.
 Targeted products or services: When you know exactly what your customers want
from you, you'll be in a far better position to serve them. You may utilize this
information to adjust your business's offerings to your consumers' demands once you
know who they are.
 Emerging trends: Being the first to discover a new opportunity or trend is a key part
of staying ahead in business, and employing a marketing analysis to remain on top of
industry trends is a wonderful way to position you to take advantage of this
knowledge.
 Market forecasts: A market prediction is an important part of most marketing
assessments since it predicts future numbers, attributes, and trends in your target
market. This provides you an estimate of how much money you'll make, allowing you
to change your company plan and budget accordingly.
 Benchmarks for evaluation: Outside of basic metrics, it can be tough to assess your
company's success. A market study gives standards against which you can assess your
firm and how well it is performing in comparison to the competition.
 Marketing analytics: Marketing analytics can provide context for prior blunders and
industry abnormalities in your company. In-depth analytics, for example, can explain
what factors influenced a product's sale or why a certain statistic performed the way it
did. Because you'll be able to examine and define what went wrong and why, you'll be
able to prevent repeating the same mistakes or encountering similar anomalies in the
future.
 Marketing optimization: An annual marketing study may help you with this because
it can guide your continuing marketing efforts and show you which elements of your
marketing require improvement and which are functioning well in comparison to
other companies in your sector.
 Marketing Environment: Successful marketers are those who can direct their
organizations through the unstable marketing environment, and do it better than
competitors. In marketing and strategic management, competitive analysis is an
evaluation of present and potential competitors' strengths and weaknesses.  To
identify opportunities and risks, this analysis gives both an offensive and defensive
strategic perspective.

1.2.6 Disadvantages of Market analysis

A marketing analysis examines the marketplace and determines where you might fit in. This
might assist your small firm in making strategic decisions. While a marketing study has
apparent benefits in terms of assisting you in identifying new customers and devising ways to
reach them, it also has drawbacks.

 Misinterpretation of Market Needs: Identifying the needs of each market segment

is one of the parts of your marketing analysis. Other firms and products that are
aiming to meet the demands of this market are also identified. There are two
drawbacks to doing so. You may overestimate your competition's ability to meet
customers' wants and give up before even attempting selling. You could potentially
misidentify the need being met. Don't forget to consider the distinctiveness of your
own product. Just because your competitors desire the same customer as you, doesn't
mean you're meeting the same demand.
 Assessing Market Growth in the Absence of Market Share: Your marketing
research will involve a look at how the entire market is growing, which can help you
gauge your options. However, if your analysis makes you feel discouraged, this can
be a negative. If you capture market share, you may compete successfully in a small
market. An examination of the market's size alone will not reveal your opportunities.
A slow-growing market can be compensated for by increasing market share.
 Target Markets vs. Market Segmentation: You must determine which market
categories contain potential buyers for your products or services. This will assist you
in comprehending the various tactics you may need to use in order to target various
types of customers. The disadvantage is that you can end up spreading yourself too
thin. Few companies can afford to market to each and every possible customer.
Choose a target market from among the available segments and go after it with a
laser-like focus.
 Improper Data Interpretation: The quality of a marketing analysis is determined by
the analyst. Market surveys can yield a lot of information, but effectively analyzing
that information is crucial. If you misread information and make decisions based on
that misconception, you will be at a severe disadvantage. Run your findings by a few
of reliable advisors. Make certain that your analysis isn't based on wishful thinking.
 Expensive to Conduct Research: One of the biggest factors that deter businesses
from conducting market research is the high costs involved. Knowing how much goes
into Market Research can be rather overwhelming for firms that are just getting
started. Unfortunately, it will be like taking a dull knife to a gunfight without Market
Research.

1.2.7 Internal Market situation analysis

 Merry down PLC was founded in 1946 as a cider maker in Heathford, East Sussex. In
the early 1990s, it purchased Shloer manufacturing and was the first firm to import
alcopops, in the shape of Two-Dogs, into the UK. Due to increased competition in the
 alcopops market, the firm lost £516,000 in pre-tax profits in 1997 and handed
distribution of Two Dogs to Scottish and Newcastle.
 In 1999, the company rebranded itself as Shloer, which boosted its soft drink market
performance. Sales grew in 2001 as a result of the company's current successful
strategy of increasing the size and frequency of existing customers' purchases while
also introducing new consumers to the brand through efficient marketing
communications.
 While the firm continues to make traditional ciders, it is hoping to profit from Shloer's
recent popularity. It explores possibilities that will boost growth for the long-term
benefit of shareholders by sticking to its original 40-year-old formula of natural fruit
juices and water.

Performance
Profitability and Sales
Merrydown PLC's overall financial performance has improved during the previous five years.
Table 1 indicates that between 2000 and 2001, the company's revenues climbed by 12% to
£17.63 million, while pre-tax profit increased by 41% to £1.05 million. Earnings per share
climbed by 86 percent to £2.92, with final dividends increasing to £0.75 in the company's
favour, while net cash increased to £2.80 million, enhancing liquidity. In addition, the firm
has a £3 million committed overdraft to cover all projected working capital needs and allow
room for future developments.
Increased Shloer sales, which surged by 47 percent to £8.5 million the previous year,
contributed significantly to the improved sales performance in 2001. Shloer is presently at the
maturity stage of its product life cycle, despite its rapid sales growth. The Product Life Cycle
(PLC) idea highlights four different periods in a product's sales history, known as
Introduction, Growth, Maturity, and Decline, and shows how profits grow and decline at each
step. The idea serves as a great tool for evaluating the brand's current and future orientation.
By determining where it is in its life cycle, relevant solutions for dealing with possible
dangers and opportunities in that stage may be identified (Brassington and Pettitt, 2001).
Shloer's product life cycle depicts how sales and profitability have evolved through time and
are likely to continue to do so in the future. Low sales growth and fragmented marketplaces
characterise the mature stage, as established rivals strive to obtain a competitive edge in
specific areas. Recent methods have mirrored those recommended at this level of the PLC.
Product modification tactics, such as expanding the selection of flavours, package design, and
size, have previously been used to relaunch Shloer in order to increase sales volumes. Market
modification techniques, such as promoting new and varied applications through recipes and
drinking situations, have effectively improved sales by drawing new customers to the brand
and motivating existing customers to buy more Shloer in the future.
Share of the Market
Shloer's market performance has improved over the previous three years, with a 1.5 percent
gain in its value share of the adult soft drinks market. Shloer is now being purchased by 7.7%
of all households, indicating that the brand has significant development potential.
Customer loyalty is important.
Over the previous three years, the firm has been able to increase Shloer's loyalty. In 2000,
independent research found a strong favourable response to the company's new branding, as
well as high levels of consumer recognition and satisfaction. Summer sales have also grown,
although they are still at their peak during the Christmas season.
Customer loyalty is divided into six categories, according to Wind (1982):
1. Existing customers who will continue to buy the brand.
2. Existing consumers who may switch brands or cut back on their use.
3. Occasional users who, given the correct incentives, may be convinced to expand their
usage.
4. Occasional users who may reduce their use as a result of competing products.
5. Non-users who could consider purchasing the brand if it is changed.
6. Non-users who have strong unfavourable sentiments about the product and are unlikely to
change their minds.
The bulk of Shloer's existing clients fit into groups 3 and 4 (occasional users). As a result,
competitors' comparable goods might erode their loyalty to Shloer, signalling that resources
should be put in a targeted marketing mix to convert them into heavy users.
Positioning
Shloer is marketed as a grown-up soft drink in the adult soft drink market, with a focus on
ladies over the age of 25. The Mc Kinsey Matrix may be used to illustrate its current market
position in order to analyse the current strategy based on its business strength in terms of key
performance indicators and market competitive dynamics.
Figure 3 shows a model that takes into account two dimensions: market attractiveness for
competitors (in terms of cash flow, market size, sales growth rate, competition, and so on)
and business strengths relative to competitors (in terms of company size, growth, marketing
capability, market share, customer loyalty, and so on). Three zones have been established,
each implying a distinct marketing strategy. When the firm's position and market
attractiveness are both good, the company should most likely spend and try to grow. Zone 3
has a more pessimistic outlook and suggests that either harvesting or divestiture techniques
be adopted. Zone 2 denotes that just a few investment decisions should be made if there are
special grounds for doing so (Aaker, 1998).
Shloer is roughly in Zone 1 and is represented by the letter X. Because of the industry's
maturity, the degree of market attractiveness is predicted to decline during the following three
years, as shown by the arrow. Indicating that resources should be directed to investing in the
near future for future growth.
Planning
The corporation is devoted to investing extensively in marketing operations and has a long-
term vision of Shloer's brand growth. In the year 2000, more staff were hired in marketing,
category management, and sales strategy, and production and brand management teams were
separated into distinct operating divisions to focus management resources on these major
operations. Furthermore, all marketing efforts are placed along the M25, a significant traffic
artery, to allow clients and agencies convenient access.
Marketing Combination

Product
Shloer is a beverage made from premium fruit juice (about 55%) and carbonated water, with
vitamin C and no artificial sweeteners or preservatives. In April 1999, it was relaunched. to
allow growth with a wider selection of flavours and more modern packaging within new
commercial channels It's now available in a 1-liter glass container as well as a single-serve
275ml glass bottle. red grape, white grape, raspberry & cranberry, white grape & peach,
white grape & peach, white grape & peach, white grape & peach, white grape & peach, white
grape & peach, white grape & peach, white grape white grape & elderflower, and grape &
apple A flask-shaped 330ml silver wrapped flask is also included. Shloer2gO was introduced
in 2000 and comes in three flavours: orange & lemon, apple, and grapefruit, as well as exotic
fruits, to appeal to impulsive purchasers. Since 1999, capital investment in plant and
equipment, as well as bottling operations, has kept systems running smoothly. up to date, and
high capacity and manufacturing standards were maintained. An honourable distinction
winning the Gold Award from the British Retail Consortium in 2000. Place Shloer is
distributed throughout the UK by SHS Sales and Marketing Ltd in supermarkets and off
licences. as well as pubs. Merrydown PLC has established a good working connection with
the firm. SHS invested in extra resources in the year 2000 to improve their administration and
representation.significant accounts on their behalf, in order to assist in the expansion of
distribution within the Irish Republic

 .Price Shloer demands a premium price in line with its present image, with prices
ranging from £2 to £3. a one-liter bottle However, robust competition precludes price
hikes from compensating promotional expenditures. Promotion Since 2000, support
for the brand has more than quadrupled, according to the present approach. A total of
£2 million was spent on advertising and marketing. In 2001, pull-strategies were
prioritised in order to illustrate Shloer's value to customers directly, with the help of a
 few well-targeted trade promotions. promotions. Shloer is marketed as "the adult soft
drink" that is "sparkling, refreshing, and more than a little bit fruity" in television and
print advertisements. The brand is marketed as being excellent for people who are
looking for a unique way to express themselves. Summer days are hazy and lethargic,
perfect for lounging in the garden with friends and as a self-indulgent adult
refreshment (www.shloer.com). Commercials aired on GMTV and Channel 4 starting
in November. 5, in combination with advertisements in Hello, the BBC Good Food
Guide, and Elle for women's magazines, In-store marketing, sampling, and PR events,
such as the Shloer garden at the Chelsea Flower Show, were also sponsored.

1.2.8 External Market situation analysis

Market Structure in the Micro Environment

The adult soft drink market accounts for 8% of overall soft drink volume and 7% of total soft
drink value.
It's further divided into clear & flavoured carbonates, flavoured waters, fruit drinks, herbal
drinks, RTD iced tea, and coffee sectors based on the kind of drink. Furthermore, clear and
flavoured carbonates are the most popular, accounting for 57 percent of the market (Mintel,
2002).
The following are some of the newer categories that have been identified:
Organic beverages are those that have been certified by a recognised authority, such as the
Soil Association, and have had their manufacturing, processing, packaging, and labelling
inspected on a regular basis.
Competition
3) Competitors in the Market – Other fizzy fruit-flavored drinks marketed at the adolescent
market, such as Tango, 7up, and Lilt, include lesser quantities of fruit concentrate and
sparkling mineral waters.

4) Implicit Competitors — Different drinks, such as hot beverages, alcoholic beverages, and
other carbonates such as Coca-Cola and Pepsi, compete for the same percentage of the adult
consumer's disposable money.
Figure 6 compares and contrasts the strengths and disadvantages of immediate competitors.
Shloer Doyle emphasises the need of studying direct rivals, also known as the strategic group,
because they all target the same market sectors and have comparable objectives. It's also
crucial to be aware of any unintentional competitors who may be selling items, since they
might represent a serious danger to the brand.
There are many competing items on the market, which may be divided into three categories.

four categories are depicted in the diagram

The model highlights five dynamics that influence a product's competitive position in the
market: (1) threat of new entrants, (2) buyer bargaining power, (3) supplier bargaining power,
(4) threat of replacement products, and (5) rivalry among current rivals.
Suppliers
Despite the large number of providers in the market, Britvic Soft Drinks Ltd leads supply,
having the largest share of both volume and value, as seen in Tables 4 and 5.
Furthermore, own-label merchants like Tesco, Sainsbury's, and Boots provide a major
percentage of the drinks.
Low in calories and sugar – Slowly increasing as customers choose healthier lives.
Tables 2 and 3 demonstrate that the adult soft drink market grew overall between 1999 and
2001, with all categories losing market share and sales to the clear carbonates sector, which
rose by 264 percent in volume and 236 percent in value.
Between 2001 and 2006, the market is expected to expand by 20% in real terms, reaching a
market value of £822 million in 2006, with volume sales expected to climb by 29%.

Market Structure in the Micro Environment

The adult soft drink market accounts for 8% of overall soft drink volume and 7% of total soft
drink value.
It's further divided into clear & flavoured carbonates, flavoured waters, fruit drinks, herbal
drinks, RTD iced tea, and coffee sectors based on the kind of drink. Furthermore, clear and
flavoured carbonates are the most popular, accounting for 57 percent of the market (Mintel,
2002).
The following are some of the newer categories that have been identified:
Organic beverages are those that have been certified by a recognised authority, such as the
Soil Association, and have had their manufacturing, processing, packaging, and labelling
inspected on a regular basis.
Competition
3) Competitors in the Market – Other fizzy fruit-flavored drinks marketed at the adolescent
market, such as Tango, 7up, and Lilt, include lesser quantities of fruit concentrate and
sparkling mineral waters.
4) Implicit Competitors — Different drinks, such as hot beverages, alcoholic beverages, and
other carbonates such as Coca-Cola and Pepsi, compete for the same percentage of the adult
consumer's disposable money.
Figure 6 compares and contrasts the strengths and disadvantages of immediate competitors.
Shloer Doyle emphasises the need of studying direct rivals, also known as the strategic group,
because they all target the same market sectors and have comparable objectives. It's also
crucial to be aware of any unintentional competitors who may be selling items, since they
might represent a serious danger to the brand.
There are many competing items on the market, which may be divided into three categories.

four categories are depicted in the diagram

The model highlights five dynamics that influence a product's competitive position in the
market: (1) threat of new entrants, (2) buyer bargaining power, (3) supplier bargaining power,
(4) threat of replacement products, and (5) rivalry among current rivals.
Suppliers
Despite the large number of providers in the market, Britvic Soft Drinks Ltd leads supply,
having the largest share of both volume and value, as seen in Tables 4 and 5.
Furthermore, own-label merchants like Tesco, Sainsbury's, and Boots provide a major
percentage of the drinks.
Low in calories and sugar – Slowly increasing as customers choose healthier lives.
Tables 2 and 3 demonstrate that the adult soft drink market grew overall between 1999 and
2001, with all categories losing market share and sales to the clear carbonates sector, which
rose by 264 percent in volume and 236 percent in value.
Between 2001 and 2006, the market is expected to expand by 20% in real terms, reaching a
market value of £822 million in 2006, with volume sales expected to climb by 29%.
Analysis can shed light on how your business is performing and assist you in making course
corrections if your plan is falling short of the mark. A situational analysis consists of the
following components:

The business
An examination of a company's vision, strategy, and objectives—and if they are being met—
is an excellent place to start. Examining the company's performance through the lens of sales,
market share, and customer retention provides a useful snapshot of whether the business is
meeting its objectives. Additionally, it can assist you in evaluating rivals and market share.
Commodities and services
Analyzing existing products or services, as well as anticipated new releases, is a critical
component of a scenario analysis. Market research is required to ascertain the viability of a
new product or service.

A market analysis done with potential consumers who provide comments or thoughts about
the product, service, or price can give insight on who the target market is and how a
company's products might be improved. Separately examine products and services to
determine which ones best satisfy your clients' demands and which ones require adjustment.

Distribution
Market study identifies a company's target demography and the level of demand for its
products or services. The competition analysis evaluates your firm in comparison to
comparable businesses. Both can provide valuable insight on your company's distribution
routes.

The distribution section of a scenario analysis examines how your products are distributed
and compares it to that of your rivals in order to discover the most effective distribution
methods for your firm.

Opportunities
Market possibilities exist when unmet or underserved demands exist. Understanding how to
get that market share is critical to a business's success. However, before a corporation can
effectively target an untapped market, it must first analyse its own strengths and flaws. A
strength, weakness, opportunity, and threat (SWOT) analysis is an effective method for
determining your business's capacity to capitalise on opportunities.

A SWOT analysis is a reasonably straightforward process that often results in a collection of

data.

Establish four categories: advantages, disadvantages, opportunities, and dangers.

Internally effective systems and processes, competitive advantages, and assets like as
technology, patents, knowledge, and cash should all be included in the strengths area.
Weaknesses are internal problems that limit your business's ability to compete more
effectively, such as recruiting shortages or a lack of money.
External variables such as regulatory changes, future news, and unique events can all benefit
your business.
Threats are external elements over which your business has no control.
In each category box, provide the pertinent information. Brainstorming is a wonderful
method for capturing ideas and information. Keep track of the ideas generated during the
brainstorming sessions in the appropriate boxes and develop an overall insight for each area.
Once completed, compile and summarise all of the insights.
When doing a SWOT analysis, the strengths and weaknesses of your firm are determined
internally, while the opportunities and threats are determined outside.
The SBA Score division provides a free SWOT analysis template.

Analyses of customers
Conducting extensive research is crucial to comprehending your clients. Collect demographic
information on your customers, their locations, their interests, and their issues. Once you
have a firm understanding of your customers, you can identify additional potential customers
as your target market and develop an effective marketing strategy. Knowing your clients
enables you to ascertain the requirements, tastes, and behaviours of your target market in
order to develop the most effective strategy for reaching them.

Competitors
Analyzing your primary rivals will assist you in determining how your firm stacks up.
Identifying and evaluating a company's competitive advantages might assist your
organisation in adapting to compete more successfully.

Conducting competitive research on their products or services, sales, and marketing methods
might assist you in adjusting your company's strategy to gain an advantage. Your competition
study should include information about a rival's market share, as well as its strengths and
flaws. The SBA maintains a database of business statistics that you may use into your
analysis.

Collaborators
Collaborations and partnerships are key components of many corporate processes. They
include raw material suppliers, business partners, and distributors who may handle your
organization's supply chain, production, and vendor connections.

Analyze collaborations to determine their strength and viability. Examining contracts and
determining if items and services have been supplied as promised in the past can provide
insight into a company's relationship's dependability.

Current business climate

A situational analysis should consider both the external and internal factors affecting a
business's success. External variables such as the economy, rivals, government laws, and
regulations all contribute to external factors. Internal elements affecting a firm include its
culture, its people, its resources, and its financial management.

A PESTLE study analyses a company's external environment by examining aspects such as

political, economic, social, technical, legal, and environmental. Examining each category
might reveal information about the broader business market. Examine each category of a
PESTLE analysis in further detail:

Factors political: the effect of government actions or elections

Economic factors: the impact of fiscal trends, present import-export ratios, and taxes on a
corporation.
Social determinants: the impact of consumer habits and demography
Technological variables: the influence of technology and innovation on a business
Legal considerations: the effect of safety standards and labour legislation
Environmental factors: the impact that environmental restrictions and climate change have on
a business
Example of a 5C scenario analysis
A situational analysis should take into account both internal and external elements affecting a
firm, and a 5C method may be the most straightforward. The five Cs are the firm, the
customer, the competition, the collaborator, and the climate.

The company component of a 5C analysis consists of the firm's vision and goals, as well as
its market position, distribution, opportunities, and goods. Consumers supply critical
information about present customers, the target market, and the prospects that a business
might pursue as part of its marketing strategy.

The rivals' section identifies a company's strengths and areas for improvement based on the
strengths and weaknesses of competitors. Collaborators are the relationships that enable the
creation and dissemination of products. Climate factors in aspects such as government policy
and the economy, as well as election projections for 2020.

Conducting periodic situational analyses can assist you in determining the status of your
business as it changes in order to ensure market success.

A scenario analysis serves a variety of functions.

An analysis may shed light on your business's position in the present market, on what is
working and what might be improved, as well as on chances to capitalise on and develop.

Utilize a scenario analysis to create a marketing strategy, uncover market gaps your business
can fill, promote new technologies, and adapt to rival developments. Adapt the report as
necessary to have a deeper understanding of your business's origins—and the path it should
go.
1.2.9 Other methods of Market situation analysis

In marketing, what is a scenario analysis?

A scenario analysis is a collection of tools used by marketing managers to examine a
company's internal and external environments in order to get a better understanding of the
organization's capabilities, customers, and business climate.Your marketing plan is vital, and
situational analysis plays a crucial role in it. Analyzing the marketing environment is the first
stage in developing a new strategy and marketing plan. This analysis will also incorporate a
SWOT analysis.

Additionally, situation analysis is undertaken on a regular basis following the implementation

of a plan to assess if any strategy revisions are necessary. Market definition and analysis,
market segmentation, and competition analysis are all included in the scenario evaluation.
I'll discuss how to create a situational analysis, the many sorts of situational analyses, and
how to construct a situational framework.Your situational analysis will become a component
of your marketing plan, since it will apply to many marketing circumstances. Your marketing
benchmark is the scenario analysis for the marketing plan.
The company's selection of individuals (or organisations) to target is based on the results of
the scenario analysis. The target market selection choice reveals the degree to which the
marketing program's positioning plan must be met.
Positioning is a marketing management term that refers to the combination of a product, a
distribution channel, a price, and a promotion plan. It is intended to differentiate the business
from its primary rivals while also addressing the demands of the target market. New product
strategies are critical to maintaining a steady supply of new goods to replace mature items
that are phased out. The strategy selection process takes into account the situational and
competitive aspects existing in the chosen product market.

Definition and Analysis of the Market

Correct market definitions are necessary for analysing buyers and competitors and
forecasting future trends.Your situational analysis should begin with market research.
Strategic analysis and planning are ineffective when referring to the market in broad strokes.
For instance, the Colorado market, the European market, or any other geographic area with a
varied population of individuals and businesses. A more precise definition of needs and
desires is required. For a market to exist, there must be individuals with specific needs and
desires for one or more items that can meet those needs and desires.
Additionally, market participants must be willing and able to pay for a product that meets
their requirements and desires. Thus, the idea of product-market simplifies the defining
process. A product market is defined as a single product (or series of related goods) that
satisfies your unique set of requirements and desires for all individuals or organisations
willing and able to acquire the product or service. The term "product" can apply to a tangible
good or an intangible service. This concept assigns a product category to individuals or
organisations that have a common set of requirements and desires.Naturally, depending on
the particular or broad nature of the requirements, the corresponding product category will be
similarly specialised or broad. Analyzing product markets and projecting future trends are
critical components of business and marketing strategy.
Strategic marketing decisions about entering new product markets, how to service current
product markets, and how to exit unappealing product markets are crucial. Marketing
professionals possess the necessary skills, expertise, and methodologies to (1) perform
product marketing analysis, (2) understand the strategic implications of the findings, and (3)
develop product market strategies. Market analysis entails the following activities:Identifying
and defining new product markets that present an opportunity for a business. Conducting an
analysis of current product marketplaces in order to establish strategic goals. Environmental
scanning and predicting of future trends and new product markets. Demand and supply
analysis is a critical component of product marketing analysis. Demand reflects the
purchasing power of the individuals and organisations who compose the market. Supply
refers to the extent to which the corporation supplying the market can meet the available
demand. You may think this is elementary economics, but you'd be amazed how many people
overlook this. A thorough examination of the buyer's demands and requirements is also an
integral aspect of the product marketing analysis process. These customer analysis activities
assist marketers in determining which consumers to approach and how to best satisfy their
demands. Your situational analysis reveals details you may have overlooked previously. As
the leader of Soricon's check reader product in Boulder, CO, I assisted in identifying a
significant gap in the single and multi-lane retail sectors. Retail managers, banks, and
clearinghouses desired to curtail and eventually eradicate check fraud. And thus was created
the check reader. The check reader enabled the POS attendant to scan the check, transferring
MICR data back to the bank to confirm adequate funds were available before completing the
sale. This prevented retail businesses from losing millions of dollars in fraudulent purchases.
Segmentation of the Market Market segmentation finds groups of customers with comparable
wants within a product market. Segmentation enables a company to better match its strengths
to the needs of one or more buyer groups.Your situational analysis reveals new information
about market segments. This may involve a strategy based on accounts. The primary concept
of segmentation is to explore distinctions and needs. Additionally, to identify two or more
categories within the target product market. Each target market consists of customers who
have comparable demands and desires for the product category in which marketers and senior
management are interested. Typically, the segments differ in terms of the buyer's attributes,
the reasons they purchase or use specific items, and their preferences for specific brands of
products. Similarly, segments of industrial product markets can be defined by the kind of
industry, the product's intended purpose, the frequency with which the product is purchased,
and a variety of other variables. A segment's features may differ significantly from the
average characteristics of the total product market. The similarity of people's requirements
within a market segment enables a marketing programme to be more effectively targeted.
Age, income, and lifestyle all influence how people shop for food, financial services, autos,
and other consumer goods. Analyze Your Competition and Your Situation Analyzing rival
tactics, strengths, weaknesses, and goals is a critical component of scenario analysis. It is
critical to identify both current and prospective rivals. Typically, a subset of the industry's
firms constitute the strategic group of a company's primary competitors. The analysis should
highlight the analysis's most significant strengths and limitations. Often, the enterprises that
comprise an industry exhibit great variety. This is demonstrated in Exhibit 1 by the
competing enterprises in the computer service industry in the United States.
The companies exhibit significant variances in terms of their level of connection with clients
and the degree to which their services are customised. Each quadrant of the map depicts
businesses that have common qualities.

1.2.10 Design of Market situation analysis

Market Segmentation and Positioning

Marketing advantage is impacted by contextual elements such as industry characteristics,

firm type, degree of difference, and buyer wants, as well as the company's unique competitive
advantages. The critical problem is determining how to compete in light of the circumstances
around a business. For instance, the marketing strategy of a market leader in a developing
sector is very different from that of a small business operating in a mature industry.
Positioning is determined by the following factors:

The factors or rewards that a buyer considers while making a purchase, as well as their
relative importance.
The degree to which and the manner in which a business is distinct from its competitors.
The constraints of competing items in terms of critical customer needs and desires.
The positioning statement serves as a springboard for developing a strategy. Positioning
reflects how the organisation wishes to be viewed by the target market and its consumers.
Positioning is defined in terms of a reference point, most frequently competition.

The formulation of a plan should begin with a product strategy and then go on to distribution,
pricing, and promotion strategies. Notably, the strategy components form a symbiotic
network of acts that complement and reinforce one another.

The selection of an effective marketing programme plan is hampered by the vast array of
possibilities available to management. Nonetheless, there is frequently a clear logic to how
the components of a marketing campaign should fit together in a specific context.
Product, distribution channel, pricing, advertising, and personal selling decisions must all
contribute to the development of an unified marketing campaign aimed at addressing the
requirements and desires of customers in the company's target market.

Creating a digital marketing campaign integrates the company's marketing skills into a
bundle of activities aimed at positioning the business against its competitors in order to
compete for the clients that comprise its target market.

Marketing management must determine the function and scope of each marketing programme
activity.

These decisions establish the overall amount to be spent on the marketing programme
throughout the planning period, as well as the allocation of resources among the different
programme activities, such as content marketing, SEO, advertising, and direct selling.

Market Strategy and Analyses of Your Situation

The target market strategy identifies the individuals (or organisations) inside the product
market that management desires to serve.
When buyer requirements and desires differ, the market target is frequently a sector of the
product market. Marketing managers must determine whether to target many segments. After
identifying a company's product markets and assessing their relative value to the business,
management must decide on a targeting strategy.
The marketing strategy's focus point is the market segmentation decision; segmentation
serves as the foundation for defining objectives and constructing a positioning strategy. The
target market approach alternatives include focusing on all or the majority of the categories.
The choice to target is based on a revenue cost analysis and an evaluation of the competitive
landscape.

The following information is required for each market target:

The target market's size and growth rate.

Users in the target group are described.
The profile or persona of the consumer.
End-user information will aid in the selection of a positioning strategy.
Short-term marketing strategy guidelines.

Positioning Strategy for Marketing Programs

The positioning strategy of a marketing programme is comprised of the product, the channel
of distribution, the price, and promotion strategies. These are chosen by management to
strengthen the company's position against important rivals while also addressing the demands
and desires of the target market. Your situational analysis should assist you in matching your
messaging to your ideal consumer profile. This technique is sometimes referred to as the
marketing mix or marketing programme. This positioning strategy establishes a unifying
notion for the function and strategy of each component of the marketing mix. The positioning
statement expresses the marketing management's desired perception of the company's
marketing mix by the target market. The first stage in designing a positioning strategy is
determining what objectives each target market should have. Marketing objectives are
developed at several levels within the organisation. Corporate objectives define the
company's overall performance goals (e.g., growth, profit, employee development, and other
broad objectives).
Each target market has its own set of objectives. Objectives are arranged in a hierarchy,
ranging from extremely broad corporate goals to the precise goals of a sales representative.
I've provided several marketing objective examples.

Choosing a Marketing Strategy

The marketing strategy chosen is influenced by the business's status and competitive
environment. Selecting a strategy is facilitated by determining the sort of plan that is
appropriate for the scenario in which a given business finds itself. For instance, a business
creating a plan for entering a new market might benefit from an examination of the strategic
concerns and criteria for new market entrance. Other instances include product lifecycle
strategies, fragmented market strategies, global strategies, and enterprise company strategies.
Analyzing distinct strategic scenarios enables the development of strategic design procedures
that place a premium on the critical strategic variables confronting a business. By evaluating
the many elements impacting strategy selection and developing action recommendations for
viable strategies, management develops strategy selection abilities. Significant strategy
selection criteria (for example, implementation difficulty) can be evaluated to aid in the
strategy selection process.

1.3 ANALYSIS OF COMPETITOR STRATEGIES

Overview

In today's highly competitive market, it is no longer sufficient for a business to understand its
consumers. Businesses must keep a careful eye on their rivals. They must regularly
benchmark their goods, pricing, distribution methods, and promotional activities against
those of their direct competitors in order to find areas of competitive advantage and
disadvantage.
Firms must be proactive and identify both present and future rivals, collect information, and
maintain a market intelligence system to track competitor activity and market trends. Often
referred to as "Competitor Myopia," ignoring or underestimating the threat posed by future
rivals in favour of current competitors. Theodore Levitt invented this word to describe
circumstances in which corporations fail to understand the full breadth of their operations.
Competitor Myopia has the potential to force businesses out of business!
Firms must do constant competitor analysis in order to develop successful competitive
strategies.
2. Defined Competitor Analysis
Competitor analysis offers a strategic context for recognising possibilities and risks on both
an offensive and defensive level. The offensive strategy framework enables organisations to
capitalise on opportunities and leverage strengths more rapidly. On the other hand, the
defensive strategy framework enables them to respond more effectively to the danger posed
by competing enterprises looking to exploit the firm's own shortcomings.
Firms do competitor analysis to determine who their important rivals are, create profiles for
each of them, ascertain their aims and tactics, evaluate their strengths and weaknesses,
estimate the danger they offer, and forecast their response to competitive actions. Businesses
that establish a systematic and sophisticated approach to competitor profiling gain a major
competitive edge.
3. Recognize Existing and Prospective Competitors
Firms must employ both an industry and a market strategy when identifying their existing and
prospective rivals. The industry approach will provide insight into the industry's structure and
product offerings from all market participants. On the other side, the market strategy focuses
on the consumer demand and the businesses that are striving to meet those requirements,
providing the firm with a broader picture of existing and future rivals.
Potential competitors include (but are not limited to) firms that compete in a related product
category, use related technologies, already target the same market with unrelated products,
operate in other geographic regions with similar products, and, finally, new start-ups
organised by former company employees and/or managers of existing firms. Firms that have
a common target market and strategy form a strategic group and are the closest competitors
of firms seeking to join that group.
Analysis of the Industry
An "industry" is described as a collection of businesses whose products and services are
highly interchangeable. Industries are categorised mostly on the basis of the number of
vendors and the degree of product differentiation. Additionally, the following elements
contribute to the structure of an industry: entry/exit barriers, cost structure, degree of vertical
integration, and level of globalisation. Industries are frequently categorised as monopolies,
oligopolies, differentiated oligopolies, monopolistic competition, or pure competition based
on the number of sellers and product difference.
Each category is detailed in further detail below.
Monopoly occurs when a single corporation delivers a certain product/service in a particular
country or region. The distribution of electrical electricity to residential and business clients
is a frequent example. Given the absence of alternatives for clients, an unfettered monopoly
striving to maximise profits has a proven motive to charge a higher price, conduct little or no
promotion, and provide rudimentary service. On the other hand, a controlled monopoly is
compelled to charge lower rates and provide additional services in the public interest.
Monopolists may be prepared to invest in service and technology if partial alternatives for
their products or services are available or if impending competition is near. Electric power
generation and distribution are excellent examples of this behaviour, particularly in light of
recent discoveries in alternative energy sources and technical advancements in the utilisation
of electric power.
In the gasoline sector, oligopoly is defined by a small number of enterprises manufacturing
essentially the same product, such as Mobil, Shell, and Sunoco. Any single firm will struggle
to sell gasoline goods over the market rate unless it can distinguish its product range in some
way.
Distinct oligopoly refers to an industry in which a few businesses make goods that are only
somewhat differentiated, such as Sony, Canon, and Nikon in the digital camera sector.
Differentiation is accomplished by the use of distinct product characteristics such as quality,
unique features, style, or services. Typically, rivals will want to be the market leader for a
certain feature, therefore attracting clients who value that attribute and charging a premium
for it.
Monopolistic competition exists when many competing enterprises in a sector are able to
distinguish their offerings entirely or partially. This is the case with grocery chains such as
Wegmans, Tops, and Price Chopper in Upstate New York. In this context, companies often
target market sectors where they can provide a superior level of service to the consumer and
hence fetch a higher price. Pure competition occurs in industries when a large number of
enterprises offer the same product/service. Because there is no distinction between offers,
prices are fixed for all enterprises, as is the case with the majority of agricultural commodities
(e.g. wheat, cabbage, and onions). There is no value to advertising, and the seller's earnings
will be affected solely to the degree that they can reduce manufacturing or distribution
expenses.
Analysis of the Market
From a market viewpoint, rather of focusing just on firms who make the same product, a firm
searches for rivals among those that meet the same consumer demand. To prevent slipping
into Marketing Myopia, and to encompass all present and future rivals, this requirement must
be stated widely.
For instance, in the coffee market, a corporation like Nestle needs evaluate direct competitors
such as Maxwell House and Taster's Choice, as well as indirect competitors. This includes
any firm that sells coffee machines in direct competition with Nespresso, such as Keurig and
Mister Coffee.
Current and future rivals are many. Companies may experience brand rivalry, industry
competition, form competition, or generic competition depending on the degree of product
replacement.
• Brand Competition: the firm evaluates other businesses that offer a comparable
product/service to the same clients at comparable rates. Coca Cola, for instance, would view
Pepsi Cola as its primary competition.
• Industry Competition: the business takes a broader view and considers all enterprises that
manufacture the same product or class of products to be rivals. Coca Cola, for instance,
would see all other soda makers as rivals.
• Product Competition: the firm takes a broader view and views rivals as businesses that
manufacture items that provide the same service. For instance, Coca Cola would see all other
makers of carbonated beverages as rivals.
• Generic Competition: the corporation might take an even broader view of its competitors,
viewing them as firms competing for the same consumer money. Coca Cola, for example,
would view all other beverage manufacturers as rivals.
A)Competitive Strategy Development
Firms can be categorised into four types of positions in an industry: market leader, market
challenger, market follower, or market nicher. By defining its own role and that of its
competitors, a business may get further insights into them and develop more successful
competitive tactics.

1. Market Dominant

It is normal in many sectors for one business to have a disproportionately large market share.
This company leads the market in terms of pricing, new product releases, distribution reach,
and promotional spending. Typically, competitors oppose, mimic, or avoid the leader. Procter
& Gamble, Coca Cola, and McDonald's are all examples of market leaders.
Leaders seek to maintain their position as the market leader in their sector. Their general
strategy is to seek to increase overall market share, defend existing market share, or grow
market share.

2.Market expansion

Market leaders often benefit the most from market expansion. The primary techniques
utilised to increase the market include acquiring new users, discovering new applications for
their product, and/or persuading existing consumers to use their product more frequently.
• To attract new users, a business might target consumers who are unfamiliar with the product
or are hesitant to purchase it due to its price or absence of key features. Johnson & Johnson
expanded the market for its infant shampoo by advertising to other family members.
• To discover new applications, a business may leverage its research and development
resources, new technology, or input from consumers who use the product in novel ways. For
instance, DuPont's nylon was initially used in parachutes, then as a fibre in the manufacture
of women's stockings, subsequently as a major component of garments, and most recently in
the manufacture of tyres and other automotive components.
• To encourage current consumers to purchase more of a product, a business creates ways to
persuade them to purchase the product on additional occasions and in higher quantities each
time.
For instance, Procter & Gamble says in its Head & Shoulders shampoo advertisements that
the shampoo is more effective when applied twice every shampoo occasion.
3.Defending Market Share The greatest method for a leader to defend its market share is to
consistently improve its goods, customer service, distribution system, and cost structure (e.g.
Coke vs. Pepsi, Gillete vs. Bic, McDonalds vs. Burger King, General Motors vs. Ford)   
4.Market Share Expansion
In many circumstances, a single market share point is worth hundreds of thousands of dollars,
which means that leaders may greatly boost their profitability by growing their market share.
However, the impact of increased market share on profitability is strategy-dependent, since
the additional cost of acquiring the greater market share may surpass the additional income.
Additionally, some market leaders must exercise caution in order to avoid inciting antitrust
charges, investing more money than their increased market share is worth, or adopting the
incorrect marketing methods.

To plan productive competitive marketing strategies, the company needs to find out about its
competitors. It must compare its products, prices, channels, and promotions against those of
close competitors on a regular basis. The company will be able to identify areas of possible
competitive advantage and disadvantage in this manner. It will be able to launch more
effective marketing campaigns against competitors and will be able to create stronger
defenses against their actions.

"Who are our true competitors?"

Is a tour operator in direct competition with a male outfitter? Is a business school in direct
competition with an insurance firm? Perhaps the answer is yes, if all of them are competing
for a piece of the consumer's wallet.
WHO ARE THE COMPETITORS?
1. WHO DO WE GENERALLY COMPETE WITH?
2. WHO ARE OUR MOST FEROCIOUS RIVALS?
3. WHO IS THE MANUFACTURER OF THE ALTERNATIVE GOODS?
4. WHO MIGHT BE INTERESTED IN COMPETING?
5. IS THERE ANYTHING THAT CAN BE DONE TO DETER THEM?

TAKING A LOOK AT THE COMPETITORS?

1. WHAT ARE THEIR GOALS AND PLANS FOR THE FUTURE?
2. WHAT ARE THE IMPEDIMENTS TO ADMISSION AND EXIT?
3. WHAT IS THEIR PRICING STRATEGY?
4. DO THEY OFFER A COST BENEFIT OR A COST DISADVANTAGE?
5. WHAT ARE THEIR ADVANTAGES AND DISADVANTAGES?
6. WHAT ARE THEIR STRENGTHS AND ABILITIES?

1.3.1 Understanding the Competitors

To have a better knowledge of your competition, look at them from many perspectives, such
as their size, growth, and profitability, their image and positioning plan, and their level of
commitment. By evaluating data relating to main consumer motivation, significant cost
components, mobility constraints, and value chain, it is useful to consider the characteristics
of successful and unsuccessful firms. Market research and a range of other sources, such as
trade journals, trade sources, consumers, and suppliers, can provide information about
competitors.
 Fig: 1.3.1 Steps in Analyzing Competitors

1.3.2 IMPORTANCE OF ANALYZING COMPETITOR

STRATEGIES:

It is necessary to take routine competitor analyses throughout the lifecycle of your business to
stay updated with market trends and product offerings. A competitor analysis can reveal
relevant information about market saturation, business opportunities and industry best
practices. It's also crucial to understand how your customers see you in relation to your
competitors. A competition study can help you understand what services are currently
accessible to your target client and which are being overlooked. Both offence and defense
benefit from competitor analysis. When you compare your company to its competitors, you
can see where you can improve as well as where you thrive. It may even assist you in
identifying a new niche in which you may capitalize.
1.3.3 There are three different kinds of competitors:
 Direct competitors include: A direct rival provides the same products and services to
the same target market and customer base, with the same profit and market share
growth objectives. This suggests that your direct competitors are aiming for the same
audience as you, selling similar products, and using a similar distribution model."
 Indirect competitors: "An indirect competitor is a corporation that provides similar
products and services to direct competitors, but with distinct ultimate goals."
 Substitute competitors: "Another company that provides your customers with a
product or service that you also give. It's essential to understand how you stand out
once you've decided on the type of competition you want to be compared against. 
 Fig: 1.3.2 Competitor Analysis

1.3.4 Elements of Competitors analysis:

Every competitor analysis should include the following ten elements:

 Feature matrix: Find all the features that each direct competitor's product or service
possesses in a feature matrix. Keep this in a competitive intelligence spreadsheet to
visualize how companies compare up against one another.
 Market share percentage: It can help you figure out who your key market
competitors are. Don't exclude larger competitors totally, as they have much to teach
about how to win in your field. Instead, use the 80/20 rule: target 80 percent direct
competitors (businesses with similar market shares) and 20% top competitors.
 Pricing: Calculate how much your competitors are charging and where they lie on the
quantity vs. quality scale.
 Marketing: What kind of marketing approach is used by each of your competitors?
Examine your competitors' websites, social media presence, event sponsorships, SEO
techniques, taglines, and current marketing initiatives.
 Differentiators: What sets you apart from your competitors, and what do they tout as
their greatest qualities?
 Strengths: Figure out what your competitors do well and what works for them. Do
the reviews suggest they have a better product? Do they have a lot of people aware of
their brand?
 Weaknesses: Determine what each rival could improve on. Do they have a social
media plan that isn't working? Is it true that they don't have an online store? Is their
site up to date? This knowledge can help you get a competitive advantage.
  Geography: Examine your competitors' locations as well as the territories they serve.
Is this a brick-and-mortar company, or does the majority of their business take place
online?
 Culture: Examine the objectives, employee happiness, and corporate culture of your
competition. Are they the type of company that proclaims its founding year, or are
they modern start-ups? Read employee reviews to learn more about the company's
culture.
 Customer reviews: Examine the customer reviews of your competition, noting both
the positive and negative aspects. Look for 5-star, 3-star, and 1-star reviews in a 5-star
system. Three-star evaluations are frequently the most truthful.

1.4 ESTIMATING COMPETITOR’S REACTION PATTERN AND

COMPETITIVE POSITION.

Any executive will tell you that understanding how rivals will react to your activities is
crucial when making strategic decisions. However, if you ask that same individual how
seriously her firm takes rival reaction, she is likely to roll her eyes. According to a recent
McKinsey & Company poll, two-thirds of strategic planners strongly believe that
organisations should factor anticipated rival reactions into strategic choices. Yet, according to
a poll performed by David B. Montgomery, Marian Chapman Moore, and Joel E. Urbany
(published in 2005 in Marketing Science), less than one in ten managers recalled doing so in
the past and less than one in five anticipated to do so in the future.

This divergence occurs because game theory, the sole formal framework for analysing rivals'
conduct, frequently becomes unmanageable in practise. To begin, most game theory models
presuppose that all participants adhere to fundamental game theory principles—a
presumption that is plainly wrong. Additionally, game theory models become complex when
a competitor has a large number of alternatives, when the strategy is uncertain about the
metrics his adversary will use to assess them, or when there are numerous adversaries, each
of whom may behave differently. However, when strategists rely on ad hoc predictions or
war-gaming exercises, the analysis can devolve into near-complete arbitrariness. The amount
of qualitative factors that enter the prediction process—personal biases and hidden agendas,
for example—risks undermining the conclusions and increasing the likelihood that top
management would reject counterintuitive findings.

Our Investigations
The conclusions in this paper are based on our expertise assisting customers with competitive
forecasting...
Over the last few years, as the leader of McKinsey's efforts to model competitive behaviour,
we've worked with a variety of organisations to forecast the potential reactions to their
strategic initiatives. Through that study, as well as a 2008 poll of top executives, we built a
practical technique to anticipating competitive behaviour that adheres to the theoretical rigour
and precision of game theory while being as easy to deploy as the majority of other methods.
(For additional information on the survey we utilised, see the sidebar "Our Research.") Our
technique entails condensing all conceivable evaluations of a rival's reaction to a certain
strategic move into a sequential examination of three issues:

Is the rival likely to respond at all?

What alternatives will the competitor examine actively?
Which option is most likely to be chosen by the competitor?
Two facts enable this streamlined method. To begin, if your adversary employs primitive
analytical procedures—as our survey indicates is the case for the majority of businesses—you
may utilise such approaches to forecast his response. Second, our research discovered that the
majority of large corporations follow a predictable pattern when reacting to a competitor's
move.

The payoffs associated with adopting the method we recommend can be substantial—
especially when contrasted to the expense of generating no forecasts at all. We assisted the
major participant in a transaction-processing business in seeing that reorienting its strategy in
a new direction would almost certainly elicit a positive, rather than destructive, response from
its main competitor. The firm adopted the approach, the competition reacted as expected, and
the outcome was a complete reversal of the industry's fortunes. We also stood by while a
telecom business failed to comprehend its competitors and hence overpaid for a new telecom
license—a mistake that cost the company $1 billion and contributed to its bankruptcy within
a few years.
In this post, we will investigate each of the three questions above and expose several
conventions, biases, and patterns that businesses use while analysing their competitors. Please
keep in mind that the data presented in this article represent averages across sectors, regions,
firm sizes, and competitive environments—all of which can have a substantial impact on
these trends. (In genuine client scenarios, we apply client-specific inclinations.) If you have
particular knowledge on how your market segment has behaved or, even better, how an
enemy makes decisions in general, you should use it in place of our averages. However, as
you will see, understanding the tendencies of all companies simplifies the process without
sacrificing accuracy unnecessarily.
Is There Any Reaction from the Competitor?
Even businesses that do competitive analysis frequently overlook the possibility that a rival
would opt not to respond to a strategic move. By excluding that alternative, the strategist
reduces the expected value of his company's move: the greater the perceived chance of
competition counteraction, the smaller the expected return. Additionally, with a lower
expected return on investment, the company is less likely to take bold action.

Is the Competitor Going to React?

The first step in analysing a competitor's response is to consider the possibility of no
response. To ascertain this, you must...

Why are otherwise conscientious strategists omitting this step? To begin, all managers—
including, somewhat ironically, those who avoid competitive analysis entirely—are schooled
in stories about companies that failed because they ignored their competitors, and they are
fearful that by assuming no reaction, they will become a protagonist in one of those
narratives. They fear that if they consciously forecast no reaction and the competition does,
they will appear even worse. They err on the side of presuming a response to avoid
undesirable eventualities. Second, personnel must portray the rival in firms that conduct war-
gaming exercises. These individuals frequently believe they would appear more intelligent
and involved if they forecast a clever move or countermove by the competition rather than
just reporting to the group, "We've considered it, and we don't believe we should do
anything." Consider how a day-long session on wargaming would begin in this manner. The
organisers are likely to disregard the original conclusion and continue the move-countermove
practise.

Thus, the first step in studying competitor reaction is to consider the possibility of no
reaction. This may be determined by asking four subquestions. If you respond no to any of
these, your odds of receiving a response are slim.

1. Is your adversary aware of your actions?

Even if an action seems self-evident to you, your adversary may miss it for one of two
reasons. To begin, the majority of businesses rely on imprecise data to gauge market trends.
For instance, in China, the majority of significant consumer goods businesses collect data on
rival volumes in only 30 main cities that account for around half of the market. As a result,
they are unable to identify new items aimed for smaller cities. In the United States, a large
consumer products firm recently missed substantial market share gains by a rival because the
market-tracking service it (and other comparable companies) utilised did not include dollar
shops, which accounted for 20% of the market for this type of commodity. Second, if your
new product affects many business units of your rival, it may not register as substantial to any
one unit and hence be disregarded. On average, just 23% of respondents in our poll knew
about a competitor's innovation in time to reply before it reached the market (while we
questioned respondents about product or service innovations generically, we will refer to
these specific replies as "new product"). Only 12% of respondents learnt about a competitor's
pricing shift in time to formulate a preemptive reaction. (In our research, we surveyed one
group on their reactions to an innovation and another regarding their reactions to pricing
changes.) Additionally, you may increase your chances of evading discovery by exploiting
your opponents' blind spots, which will become apparent as you analyse the next three
subquestions.
Only 23% of the CEOs we polled were aware of a competitor's new service in time to reply
before it launched.

2. Will the competitor perceive you as a threat?

Even if your rival observes your activities, he may not see a threat—and hence may not
believe that mounting a reaction is worth the effort and disruption. The majority of
corporations evaluate performance purely in relation to their yearly budgets. If the budget's
financial objectives can still be accomplished despite your planned action, management will
perceive the firm as "on track" and secure. Thus, assessing whether your enemy would
answer is critical to predicting if he will respond, and is frequently easier to determine than
you might imagine. Certain businesses disclose their objectives by product line. Numerous
businesses publish earnings objectives. For public corporations that do not publish their
objectives publicly, the earnings forecasts of securities analysts—which many companies use
as targets—can be substituted. If no such data is available, just calculate the prior year's
volume growth rate and presume the firm would aim for a comparable pace this year. Once
you've established your competitor's anticipated objectives, you may evaluate industry sales
statistics to see whether the firm is on track. When you factor in the likely consequences of
your activity, you may make an early estimate regarding the company's future viability.
3. Is mounting a reaction going to be a top priority?
Before you make a move, your enemy already has a comprehensive agenda. It includes
product launches, marketing campaigns, reorganisations, large acquisitions, plant openings,
and cost-cutting initiatives—all of which must be scaled down in order to respond to your
relocation. As a result, if your adversary has already committed to plans that will consume all
of his attention, he will be averse to shifting priorities. By determining the perceived "cost" to
your opponent of abandoning his planned endeavours, you may determine if he will choose to
ignore you. Additionally, keep in mind that some of the business unit's goals will have been
determined by its corporate parent. For instance, assume the parent company of a unit faces
earnings pressure from Wall Street. If the unit's instructions are to create present revenue, its
management may remain silent (or may pick an insufficient response) despite feeling fairly
threatened—especially if a forceful reply would be more costly in the short term than
ignoring your conduct.
4. Is your adversary capable of overcoming organisational inertia?
Even if senior management desires to respond, the company as a whole may be resistant.
Numerous variables might exacerbate this obstacle. To begin, if responding involves
significant organisational changes, it is highly unlikely that the corporation will do so until
the threat is immediate and lethal. We once advised a telecom customer that, within three
years, it will confront competition from new entrants. To prepare, the customer required a
new planning methodology, the development and implementation of which would take the
whole three years. Because the threat had little effect on present performance — despite
management's acknowledgement — the corporation lacked the drive to make more than
minor adjustments. As a result, it ultimately lost almost 30% of its market share.
Second, managers are often hesitant to forsake their success formula, and when they do, they
are notoriously inept at changing it. Employees adhere to thousands of processes designed to
bolster the formula. These are tenacious.

Third, businesses often struggle to construct a response that entails the participation of third
parties who may not share their urgency. In the late 1980s, a small pizza delivery chain in the
United States called Papa John's noticed a shift in consumers' perceptions of the quality of
Pizza Hut and Domino's (the top two chains) and capitalised on the opportunity by
developing a differentiated value proposition dubbed "Better ingredients. Better pizza."
Throughout the 1990s, Papa John's developed swiftly and surpassed the two larger
competitors to become the third biggest pizza company in the US. Incapable of mobilising
their franchisees around quality until the danger became clear, the large chains waited until
2000 to respond with their own improved pizzas.

Even if they were aware of a competitor's strategic action, 17% of our survey respondents
indicated that they did not respond to it.

While all rivals will notice a significant shift, our experience indicates that organisations
overestimate the chance of a medium to minor action being observed by 20% to 30%.
Additionally, 17% of our survey respondents indicated that they made no reaction even
though they were aware. This is surprising, given that respondents were recalling just those
instances in which their organisation identified a danger and rated the action as a "major"
move with the "potential to considerably influence your assessment of your competitive
position in your market category." Thus, the chance of receiving no answer in an average
real-world circumstance may be significantly greater. Taking all of these considerations into
account, it is plausible to expect that businesses do not respond to their competitors' activities
at least one-third of the time—certainly enough to merit an explicit effort on your part to
ascertain if your competitor will. Additionally, merely determining if a competition would
reply simplifies the entire process. If you believe the firm will not react, you can proceed
directly to the next stage.

What Alternatives Will the Competitor Consider Actively?

According to classical game theory, the next stage would be to provide a comprehensive list
of all possible possibilities for your competition to examine, assuming it would research each
one before picking one. However, this very assumption undermines businesses' confidence in
their capacity to forecast, leading them to forego analysis. In comparison, our experience with
customers and the survey findings reveal that, while rivals may discuss a variety of answer
choices, they genuinely consider only a few. Daily duties that keep some rivals from replying
at all may also hinder them from dedicating time to thoroughly analyse all alternatives.

When we analysed the number of choices considered by businesses seeking replies to a

competitor's new product launch or price adjustment, we discovered that the vast majority
explore less than four. The median number of actively explored choices was nearly identical
to two or three. The distribution was likewise tight: about 75% of respondents examined two
or three; 10% or less examined five or more. Due to the fact that you cannot predict which
possibilities your adversary will evaluate, you must analyse more thoroughly than he does.
Having said that, the number can be limited, since you can anticipate which possibilities he
will evaluate. Both the innovation and pricing groups in our study identified "the single most
apparent counteraction" as the most often examined alternative (in these situations, that
would be introducing a me-too product or matching a price change). In all situations, almost
55% of participants said that they considered the most obvious response, and more than one-
third of those who evaluated only one response chose that choice. As a result, there is a
significant possibility that a rival is evaluating the most apparent reaction carefully.

However, there were notable distinctions between the various possibilities evaluated in the
context of a new product and those considered in the context of price. 43% of price managers
examined what their business unit did the last time it encountered a comparable circumstance,
compared to only 26% of innovation managers. 25% of innovation managers indicated that
they were likely to consider recent activities by other business divisions inside the
organisation, compared to 16% of price managers. In all categories, around 30% of managers
sought guidance from board members and external experts. The second-least probable choice
(20 percent for both groups) was to examine the business unit's past experiences, and the least
likely option (19 percent for both groups) was to consider the executive in charge's prior
experience. The basic line is that you don't have to go back very far to determine which
possibilities your competitors will consider.

Which Option Is Most Likely to Be Chosen by the Competitor?

As a result of the preceding process, you should have compiled a brief list of potential
possibilities that your enemy is likely to explore. Now it's up to you to zero in on the one he'll
select. This prognosis creates the most worry for many strategists. It is not necessary. Bear in
mind that the alternative to making this prediction—avoiding predictions—is far worse, so
the effort does not have to be 100 percent right all of the time to be worthwhile.

Classical game theory (as most strategists are familiar with) takes a convoluted path to that
prediction: It states that a competitor will choose the option that maximises his net present
value after accounting for all sequential moves and countermoves made by all competitors
(each of whom typically has complete knowledge of the others' motives, economics, and
options) until a new equilibrium is reached. Regrettably, no portion of that prescription
remains true in practise.
By combining the spirit of game theory with the real behaviour of businesses, strategists may
simplify and enhance prediction. Our experience teaches us to begin with the following rule:
Among the alternatives carefully considered by your enemy, he will select the most effective
one (as determined by his analytic approach) within the restrictions of his trade-off between
short- and long-term suffering. The rule makes logical and has been validated via our client
work. To put it into practise, strategists must consider the following two subquestions:

1. How far ahead does your rival appear to be?

In chess, the top players are said to anticipate five or more steps ahead—a process that
(intuitively) entails sorting through hundreds of thousands of "if he picks x, I will choose y,
and then he will choose z" possibilities. In business, planning ahead is a similar procedure.
We conducted actual trials in which the ideal option is different depending on whether the
rounds are even or odd. To make matters more complicated, your adversary's optimal answer
may vary depending on whether he analyses simply your reaction or that of other rivals as
well.
Only 25% of our survey respondents explored more than two or three possible responses to a
competitor's move.
Fortunately, while there are several methods to examine a situation, the vast majority of
businesses, like you, prefer straightforward, readily replicated studies. When asked how
many moves and countermoves they studied, over 25% of our respondents said that they
modelled no interactions other than their own. This percentage was as high as 45 percent in
other circumstances (for example, financial sector responses to pricing changes). The next
two most often given responses were based on the assumption of a single round of counter-
reaction by either the first mover (the firm that introduced the innovation or price adjustment
to which the competition is responding) or many competitors. That is, around 35% used a
one-stage response model. (Again, the proportion was far greater in specific industries.)
Fewer than 10% of the managers questioned examined many rounds of response from
multiple competitors.

2. How does the rival measure success?

Businesses frequently make the mistake of assuming that everyone assesses success the same
way. This explains why a large proportion of our clients feel their competition are
"irrational." However, would your most significant competition, who by definition has made
a series of intelligent choices (otherwise, he would not be your most significant competitor),
pick this time to lose his senses? Or is he merely following a plan that appears to be inept by
your standards but appears to be rather intelligent by his? Simply ask yourself, "What metric
would have influenced my competitor's recent decisions?" to ascertain your competitor's
metrics. You won't have to look far to get the solution. The majority of businesses employ
easy, short-term strategies. Only roughly 15% of respondents in our poll employed NPV to
assess their alternatives. Seventeen percent based their decisions on short-term market share,
while another seventeen percent based their decisions on short-term earnings. 20%
considered "long-term" market share, while another 21% considered "long-term" earnings.
However, do not interpret our responders' usage of the term "long-term" literally. When
asked how far into the future they anticipated the costs and advantages of their probable
replies, 85% indicated four years or less, and around 62% stated two years or less. These
percentages vary according on the respondent's geographic area and industry. For instance,
when considering price movements, the majority of respondents in Asia-Pacific reduced their
time horizon to one year, whereas financial services organisations increased it to three to four
years. Clearly, managers struggle to accept the uncertainty of short-term expenditure in
exchange for the certainty of long-term return.
Your final task is to mimic your adversary’s decision-making process by applying his metrics
and analytic techniques (including the rounds of competition) to the options you think he will
look at in order to see which one (or ones) seems best. Sensitivity analyses should be
conducted for the elements of greatest uncertainty to help determine whether or not the
choice for your adversary is clear-cut. If these indicate that the decision is a close call, then
you must also assess your adversary’s recent actions in response to a competitive move. Our
research suggests that even if companies consider multiple response options, most will have a
clear preference for one or two. The companies represented in our survey that reacted to a
strategic move at all (remember that 17% did not react) usually either made the most obvious
response (22% in the innovation group, 18% in the pricing group) or relied on the instincts of
the decision maker (19% of innovation managers, 13% of pricing managers). What you must
do, therefore, is spend some time understanding the patterns the CEO or relevant executives
have displayed in prior decisions: Get a gut feel for their gut feel. Talk to people who have
worked with those executives and learn about the units they have led. Look at the history of
the competitor’s other units, as well.

A rigorous analysis of competitors’ behavior doesn’t have to involve a lot of math and talk of
Nash equilibria. The key is to focus on understanding how a competitor actually behaves
rather than on the theory of how everyone should behave. By studying your competitor’s past
behavior and preferences, you can estimate the likelihood of his responding at all, identify the
responses he is likely to consider, and evaluate which will have the biggest payoff according
to his criteria. This information can give you an accurate idea of what your competitor is
likely to do. And the competitor you can predict is the one you can learn to outsmart. Isn’t
that what strategy is all about?

Knowing the tactics, aims, and strengths and weaknesses of competitors can assist managers
predict (project) how they will react to the company's strategies. Furthermore, each
competition has its own corporate philosophy, culture, and guiding values, all of which
influence its reaction pattern. Each competitor reacts in a unique way. Some companies might
not react immediately or aggressively to a competitor's move for a variety of reasons: they
may believe their clients are loyal; they may be sluggish to notice the shift; or they may lack
the financial resources to respond. Some competitors only react to particular types of assaults
while others do not. They may always react negatively to price reductions as a way of
signaling that they will never succeed. They may, however, be unresponsive to advertising
increases, considering them to be less dangerous. Other competitors retaliate quickly and
strongly to every attack. Knowing how significant competitors react might provide insight
into the best ways to attack competitors or protect the company's current positions.

1.4.1 Competitors based on reaction patterns

Competitors can be divided into four groups based on their reaction patterns:

 The Laid-back Competitor: This competitor does not respond swiftly or forcefully
to any of the opponent's movements or attacks. There could be a variety of reasons
why the laid-back competitors don't react right away, including the fact that they
 believe their customers are loyal, that they are doing well in business, that they are
slow to notice the move, that they lack funds to react, that they are too preoccupied
with their own development plan, and that they are confident that rivals cannot harm
their interests in any way.
 The Selective Competitor: A competitor that respond only to certain types of attacks
and not to all attacks. For example, it may respond to price decrease, but not to
increased or improved promotional efforts.
 The Tiger Competitor: A competitor who reacts quickly and fiercely (like a tiger) to
any attack on its terrain or arena. The tiger competitor wants competitor to know that
it is a tiger and that they should avoid attacking since the defender (the tiger) will/can
fight to finish them.
 The Stochastic (Unpredictable) Competitor: A competitor who does not react in a
predictable manner. The stochastic competitor may not react for a variety of reasons.
For example, it may not want to react on a specific occasion; it may not be in a
favorable economic situation; it may want to prepare for a strong future attack; it may
believe that it is better to concentrate on improving its position rather than react;
and/or it may believe that rivals' attacks cannot harm its performance.

1.4.2 Competitors Competitive Position:

Competitive positioning is a marketing strategy that relates to how a company's marketing

team may set itself apart from its rivals. The company's position is determined by how its
goods and services compare to the value of similar goods and services on the market.
Consumer judgments are used in the competitive positioning method, usually on an aggregate
basis.

There are four different sorts of competitive strategy:

1. A cost-cutting technique: It works well for huge companies that can create a large volume
of things at a low cost.
2. Cost-cutting strategy.
3. Differentiation leadership strategy.
4. A focus on differentiation strategy.

1.4.3 principle of competitive positioning

Competitive positioning as a factor to consider while establishing a marketing strategy has

been characterised as follows:
Positioning is the process of developing a business's offering and image in such a way that
they hold a relevant and unique competitive position in the eyes of its target consumers.
(2000) (Kotler, 1997)
Competitive positioning is fundamentally concerned with how customers in various segments
of the market perceive rival organisations, products/services, or brands. It is critical to
remember that positioning can occur at any of the following levels:
Companies: For example, in grocery retailing in the United Kingdom, the major competitors
are Tesco, Sainsbury's, and Asda, and positioning is based on their identities; products and
services: positioning also applies at the product level, as demonstrated by the comparison of
the Dyson vacuum cleaner to similarly priced products from Hoover and Bosch; brands:
competitive positioning is perhaps most frequently discussed in terms of brand identities:
Indeed, some examples demonstrate the critical nature of these levels in relation to one
another – Virgin, for example, is a company that embodies certain values in the minds of its
customers, which translates into the company's simplified financial services products and
serves as the brand identity for a variety of products and services.
In some respects, competitive positioning may be viewed as the result of businesses' efforts to
achieve successful competitive differentiation for their products and services.
However, according to Kotler (1997), not all competitive differentiation efforts will result in
a strong competitive position; differentiation efforts should fulfil the following criteria:
Importance – a distinction should result in a highly valued advantage for a sizable number of
clients; Distinctive and pre-emptive – the distinction should be difficult to copy or perform
better by others;
Superior – the difference should provide a superior method for customers to obtain the
desired benefit; communicable – the difference should be capable of being communicated to
and understood by customers; affordable – the target customers can afford to pay for the
difference; profitable – the difference will command a price that is profitable for the
company.
The notion of the value proposition – the promise given to clients that embodies the position
we desire to take in comparison to rivals – is one method to describe the consequence of the
search for distinctions that matter to target customers and how we perform them in a
distinctive manner. For example, in the mid-1990s, Daewoo obtained 1% of the UK
automobile market from scratch in the quickest period ever recorded by a car manufacturer.
The automobiles it offered were unremarkable — they were rebadged versions of older
General Motors designs. What set it apart was an unambiguous and unequivocal value offer
to its target market niche. The four pillars around which this company's unique value
proposition was built were as follows:
1 direct: interacting directly with customers rather than via conventional distributors and
remaining in touch throughout the purchase and usage of the goods; 2 hassle-free: clear
communication with customers and no sales pressure or price bargaining;
3 reassurance: all consumers pay the same price, and several items that were formerly
provided as optional extras are included in the package;
4 decency: exhibiting throughout the process an awareness of the customer's demands and
preferences.
On the strength of this concept, Daewoo soon built a strong competitive position in a certain
section of the automobile industry.
A competitive position may be established on any aspect of a product or service that provides
an advantage to the consumer in the market, but positioning places a strong focus on the fact
that what matters is customer perception.
Indeed, Ries and Trout (1982) popularised the word 'positioning' to refer to the creative
process that begins with a product. A product, a service, a business, or even a person...
However, positioning is not something that you do to a product. Positioning is what you do to
the prospect's thinking. That is, you place the product in the prospect's consciousness.
The Ries and Trout approach to the 'battle for your mind' is heavily focused on marketing
communications and brand image, whereas competitive positioning, as we have seen, is
somewhat broader in its recognition of the impact of every aspect of the market offering that
customers perceive as critical to creating distinctive value. To summarise the fundamental
philosophy, consider the following: You don't purchase coal, you buy heat; you don't buy
circus tickets, you buy thrills; you don't buy a newspaper, you buy news; you don't buy
glasses, you buy vision; and you don't sell items, you create positions.
Kotler's (1997) warning about the primary positioning flaws (Figure 7.3) that might weaken a
company's marketing strategy emphasises the critical nature of clear and powerful
competitive positioning:
Under-positioning: when clients have only hazy perceptions of a firm or its products and see
nothing distinctive about them, the product becomes a 'also-ran';
Over-positioning occurs when a customer's perception of a company, product, or brand is too
limited: Mont Blanc offers pens for many thousand pounds, however it is critical for the
brand that consumers understand that a Mont Blanc pen can also be purchased for less than
£200;

Confusion about positioning: frequent changes and contradictory messages may

simply confuse customers about a company's positioning: Sainsbury's indecision
about whether or not to have a loyalty card in response to rival Tesco's launch of its
card, as well as about its price level in comparison to competitors, contributed to its
1990s market leadership loss; doubtful positioning: the claims made for the company,
product, or brand may simply not be accepted, whet the appetite for the company,
product, or brand. British Home Stores' objective of becoming 'the first-choice store
for outfitting the modern lady and family' failed in a market dominated by Marks &
Spencer, notwithstanding the latter's recent difficulties

1.5 SUMMARY
  The marketing plan explains in detail the steps that must be taken in order to carry out
the marketing program, and it takes a lot of time and effort to develop and implement.
 Market analysis is a wider term. If want to launch a product we should know the
market situation. Strategic planning is required to reach the goals.
 To achieve the goals we should know about the market situation, our competitors. The
process of strategic market planning may be quite complex.
 The planning process begins with an in-depth investigation of the organization's
internal and external settings, which is frequently referred to as a situation analysis,
whether at the corporate, business unit, or functional level.
 SWOT analysis focuses on the internal (strengths and weaknesses) and external
(opportunities and threats) aspects that provide the firm specific advantages and
disadvantages in serving the needs of its target market, as determined by the situation
analysis.

1.6 KEYWORD

Market: A group of customers or organizations that is interested in a product, has the

financial means to purchase it, and is permitted to do so by law and other laws.
Market Segmentation: Market segmentation is the practice of dividing a market into groups
of buyers with distinct demands, features, or behaviors who may require different products or
marketing mixes.
Microfinance Robinson (2001) defines microfinance as ―small-scale financial services
primarily credit and savings—provided to people who farm, fish or herd‖ and adds that it
refers to all types of financial services provided to low-income households and enterprises.
Entrepreneurship - An entrepreneur is a person who has possession over a new enterprise or
venture and assumes full accountability for the inherent risks and outcome. The term is a lone
word from French and was first defined by Irish economist Richard Cantillon A female
entrepreneur is sometimes known as entrepreneurs. However, Entrepreneur in English is a
term applied to type of a personality who is willing to take upon herself or himself a new
venture or enterprise and accepts full responsibility for outcome. (Veira, X. (2008).
Over-positioning - Over-positioning is a marketing failure whereby a brand, product or
service is too special such that it appeals to few customers. The term applies to a
competitive position or product differentiation that may strongly appeal to some customers
but not enough to reach a firm's sales targets.

1.7 LEARNING ACTIVITY

1. What is market analysis?

 2. Define competitive research?

1.8 UNIT END QUESTIONS

A. Descriptive Questions

Short Questions:
1. What is SWOT analysis?
2. What are types of competitors?
3. Why analysis of competitor’s strategies is important?
4. What is purpose of analyzing market situations?
5. Write the step in analyzing competitors?

Long Questions:

1. What are five C’s of market situation analysis?

2. What are advantages of market analysis
3. What are disadvantages of market analysis?
4. What are the elements of competitive analysis?
5. Describe market analysis and competitor strategies analysis.

B. Multiple Choice Questions

1. __________ Competitor who does not react in a predictable manner.
a. The Stochastic
b. The Tiger
c. The Laid-back
d. The Selective
2. _______________is not a primary factors to consider when assessing the current
market situation.
a. Company
b. Advertising
c. Climate
d. Collaboration
3. An ___________ competitor is a corporation that provides similar products and
services to direct competitors, but with distinct ultimate goals.
a. Substitute competitors
b. Indirect competitors
c. Direct competitor
d. Replacement competitor
4. An __________ is defined as an external factor that has a favorable impact on or
contributes to a company's success.
 a. Strength
b. Weaknesses
c. Threat
d. Opportunity
5. Market Situation Analysis should be based on _______ , hard, verifiable facts.
a. Cold
b. Hot
c. Soft
d. Warm

Answers
1-c, 2-c;l, 3-a. 4-d, 5-a

1.9 REFERENCES

References book:

 Marketing_Management_14th_Edition by Philip Kotler (Northwestern University)

and Kevin Lane keller (Dartmouth College)
 Principal of marketing 2nd European edition by Philip Kotler
 Marketing Management- Essentials of Marketing edited By Neha Tikoo
 Marketing Strategy by Ferrel Hartline

Websites:

 https://smallbusiness.chron.com/disadvantages-marketing-analysis-25883.html
 https://www.yourarticlelibrary.com/marketing/8-stepped-process-of-analysing-
competitors/48761
 https://www.zabanga.us/sales-promotion/estimating-competitors-reaction-
patterns.html
 https://www.cleverism.com/ultimate-guide-market-situation-analysis/
UNIT - 2: UNDERSTANDING STRETEGY -MARKET
LEADER, MARKET CHALLENGER, MARKET
NICHER
STRUCTURE
2.1 Learning Objectives
2.2 Introduction
2.3 Market leaders’ strategies
2.2.1 Expanding the total Market
2.2.2 Protecting Market Share
2.2.3 Expanding Market Share
2.4 Market Challenger Strategies
2.4.1 Choose and Attach Strategy
2.4.2 Market follower strategy
2.4.3 Market niche strategy
2.5 Summary
2.6 Keywords
2.7 Learning Activity
2.8 Unit End Questions
2.9 References

2.0 LEARNING OBJECTIVES

After studying this unit, you will be able to:

 Describe strategies of market leader.

 Explain market share effects.
 State market share strategies of five step procedure.
 List the benefits and drawbacks of market challenger.

2.1INTRODUCTION
It's not easy to be the market leader. Other firms are always challenging the leader's strengths
or attempting to exploit its flaws. In the face of fresh entrants as well as existing rival firms,
the leading firm may become weaker or outdated.
Almost every business model is based on a market leader with the biggest market share. In
most cases, the leader is the one who leads the other companies in terms of new product
creation and price modifications. Promotional event and distribution systems Others, on the
other hand, may not respect the leader. Others, on the other hand, may recognize its power.
Only the leader is followed, challenged, imitated, or avoided by companies.
Obviously, the life of a market leader is not simple. It is necessary to be cautious at all times.
Other companies are continuously looking for methods to exploit a leader's flaws.
The leading brand can adopt one of three actions to maintain its market leadership.
The market leader in the industry has the biggest market share in the relevant product. It
commands a significant share of the market. It clearly outperforms competitors in terms of
new product creation, price changes, distribution coverage, promotional activities, and
innovative experimentation.
Other firms may or may not respect the leader, but they must recognize the leader's power.
The market leader might be challenged, followed, or avoided by other companies. Maruti
Suzuki in cars, Hero Honda in two-wheelers, Hindustan Unilever in consumer-packaged
goods, Coca-Cola in soft drinks, McDonald's in fast food, Life Insurance Corporation in life
insurance, and so on are well-known market leaders in India.
The market is monopolized by a few market leaders. To maintain their leadership position,
they must remain awake at all times. Other companies are continually putting pressure on the
CEO's position. A minor blunder can knock the leader down to second or third place. In all
aspects of marketing, it must employ creative approaches. In order to keep the top spot, it
sometimes has to spend a lot of money. Increasing overall demand, Market share should be
protected, Increase your market share.

Market Challenging Techniques are marketing strategies used by companies in the third or
second place in the market to target the market leader or a direct rival with the goal of gaining
a larger market share and generating large profits.
There will be rivalry wherever there is a market. In fact, it wouldn't be inaccurate to suggest
that the term "market" is associated with competition in the corporate world. There will be
competitors up front who have already gained market share if a new business enters a market.
So, what exactly does a new company do? Should it close due to apprehensions about
competition? NO, confronting those competitors would be the best strategy. This will benefit
the firm in two ways:
A company that takes on existing competitors will not only give them a hard time, but it will
also instill dread in newcomers, acting as an entry barrier. The new business will be able to
progressively climb the success ladder with this technique.
In the simplest terms, market challenger tactics are marketing techniques used by a company
to challenge or attack the market leader or immediate competitors in order to generate
revenue and gain market share. That company could be brand new to the market or ranked
second, third, or even last in the competition.
A "market challenger" is a company that takes on other companies. There is an extremely
significant point to be made here. Is it possible for a company in any position to challenge the
market leaders? No, it doesn't work that way, and here is where most businesses go wrong.
If a company is just getting started in a market, its competitors will be low-ranking
companies. A newcomer just cannot compete with the industry's leader or runner-up. If a
company is in fourth or third place in the market, it can go after the industry leaders.

2.2 MARKET LEADER STRATEGIES

1. Exploring the market on a global and local level:
Consider the market leaders in their respective categories, such as Coca-Cola, Microsoft, LG,
and others. You'll see that each of these companies has items that are well-known and widely
used around the world. Each of these items' marketing strategies, on the other hand, is
tailored to the market that it serves.
If you have a firm with a lot of competitors, you should think about market expansion as well
as localization. Don't ignore the worldwide market, but more importantly, don't forget your
own turf while serving the global market. The simple supporting data for this assertion is that,
after investigating global markets, every emerging country is now focusing on its own rural
markets, which will bring the most growth potential.
2. Smart Expansion:
Expansion for the sake of expansion can be destructive. All strategists understand that
maintaining a close eye on the company's cash flow is critical to its success. If your working
capital is being utilized for expansion, it will have an impact on even the company divisions
that are growing, forcing you to cut back on important initiatives.
Expansion is vital for a successful firm, but it should not be at the expense of a skewed
working capital or cash flow, since both can be detrimental to your existence.
3. Control costs :
 Take a hard look at any good company's financial statements to see how they manage costs.
Profits can be calculated using only one formula. Profit equals income minus expenses. As a
result, if you reduce your expenditures, your expenses will naturally decrease, resulting in a
higher overall profit. The most important thing is to understand what the primary components
of your costing are. For example, transportation, rentals, labour, distribution margins, and
other expenses in a product-based corporation are all more expensive than the raw materials
required to make the product. As a result, understanding each and every costing component is
critical.
During a downturn, a wonderful example of the need of cost control may be shown. When a
corporation is confronted with a difficult economic environment, it must choose how to
control costs while reducing spending. It can be accomplished by making fundamental
changes to raw materials, partnering with low-cost transporters, shipping in bulk quantities,
reducing labour, and lastly reducing skilled manpower. These are some of the ways employed
by businesses to keep costs under control during difficult times. Instead of taking harsh
actions, if effective processes are used during good times, the corporation will have larger
margins and deeper pockets to phase out the bad times.
4. Implement effective marketing strategies :
The key to outsmarting your competitors is to establish your own distinct position in the
minds of your customers. This position should be both appealing and lucrative. Only then
will you obtain a competitive advantage over time. Marketing strategies must be put into
action correctly. What should the company's messaging be? How can you evolve your
messaging over time to attract more people to your business? How can marketing be changed
to increase market share and expand? What should market communication vehicles be? What
is the best way to implement the plan and in what order? These are some of the questions that
your marketing strategy should properly address.
It is critical at this time to use your competitors as a point of comparison and to develop a
marketing strategy that is superior to your competitors' and aids you in obtaining the statistics
you desire. The most effective technique to put together a solid marketing strategy is to do a
thorough competition analysis and determine where you stand in the current market. You are
not allowed to challenge the top rival right away. However, by establishing a great marketing
plan and sticking to it, you may eliminate each competition one by one. The key to marketing
success in this scenario is proper implementation of the marketing plan.
5. Get the appropriate individuals on board and keep them:
In the service industry, you are only as good as the people you hire. Many software
organizations set aside a portion of their profit margin to avoid having to replace software
professionals once a project is over. When the task is over, these engineers are transferred to
another project. A customer service manager never wants to lose one of their top employees.
A CEO will never want to lose one of his top performers. Any organization does not want to
lose productive personnel. Your assets are your staff and stakeholders.
To keep your employees and stakeholders motivated and committed, you must take action on
a regular basis. Take any firm with a low attrition rate and you'll find one that invests heavily
in staff training and development. This is due to the fact that when people leave a company,
they take with them a portion of their expertise and experience. Over time, this knowledge
and experience must be instilled in the other employee. As a result, a significant amount of
effort is spent training and developing new personnel. As a result, smart businesses save time
by retaining and encouraging their most valuable people. And it is because of this that they
are able to keep ahead of the competition.
6. Concentrate on your clients:
Several businesses forget that the main reason they are still in business is because their clients
like their products. When a business forgets this principle, it is doomed to collapse. As a
result, you must be the finest in this field. You should know everything there is to know
about your customers. Conduct frequent market research and consumer buying behavior
analysis to determine the customer's thinking. A new technology that you overlooked but that
a competitor has installed can catch your customers' attention and drive away even your most
devoted clients.
While a position of market leadership has undeniable appeals, both in terms of the potential
to influence others and a potentially better return on investment, leaders have all too
frequently proven fragile in the face of a challenger or the need for big technical change in
the past.
As a result, if a market leader wants to maintain its dominance, it must constantly defend its
position.
Because of the increased intensity of rivalry that has occurred around the world in recent
years, many managers have developed an interest in military battle models in order to
uncover any lessons that can be learned and applied to business. Position defense, mobile
defense, flanking defense, contraction defense, pre-emptive defense, and counter-offensive
defense are six military defense methods that can be deployed by a market leader bent on
defending his position. If military history can teach the marketing or business strategist
anything, it must be that some of these techniques are significantly less likely to succeed than
others.
Leading the market and putting the customer first:
From what has been discussed so far, it should be clear that a marketing planner must build a
clear vision of what the future will or can be for an organization to become a market leader
and - perhaps more crucially – maintain its leadership position over anything other than the
short term. As part of this, it is commonly stated that a strong focus on the client is required,
and that the organization must be customer-driven by necessity: fact, this is a basic feature of
the marketing notion.
However, it is important to note that there is a strong case to be made against being entirely
customer-driven, because customers rarely have a comprehensive or helpful vision of what
they want in the future. (It's crucial to note that we're not arguing against customer happiness
when we say we don't want to be customer-led.) For example, if Sony had developed the
Walkman based on the results of customer research, the product would have been abandoned
early on because few buyers seemed to value the concept.
A number of considerations must be addressed before making this decision, most notably the
competitive implications. Taking down a slew of tiny regional companies, for example, is
frequently significantly more profitable than going after the market leader.
Position defense, flanking defense, pre-emptive defense, counter-offensive defense, mobile
defense, and contraction defense are six popular defense techniques used by corporations in
market leadership positions to defend their market share from challengers.

2.2.1 Expanding the Total Market

Market leader companies make the most money as the whole market expands. The focus of
expansion in total markets is determined by the product's location in its lifecycle.
When a product reaches maturity, this method is typically adopted.
Expansion for the sake of expansion can be destructive. All strategists understand that
maintaining a close eye on the company's cash flow is critical to its success. If your working
capital is being utilized for expansion, it will have an impact on even the company divisions
that are growing, forcing you to cut back on important initiatives.
It's not easy to be the market leader. Other firms are always challenging the leader's strengths
or attempting to exploit its flaws. In the face of fresh entrants as well as existing rival firms,
the leading firm may become weaker or outdated. To keep its leadership, the company can
utilize one or a mix of three techniques.
When the overall market expands, market leaders typically gain the most. The focus of total
market expansion is determined by where the product is in its life cycle. When a product has
reached maturity, this method can be implemented. For example, the Japanese boosted
vehicle production in order to expand into new markets.
When a product is in the maturity stage of its life cycle, market leaders can look for more
users, new uses, and more consumption of their products. When ICICI Bank felt the heat of
competition in the congested and over-saturated urban market, it ventured into rural banking
and Agri business lending. Maruti Udyog established the True Value automobile business,
which sells used cars that have been approved by Maruti engineers, in order to extend their
market in both rural and urban areas.
Expansion is vital for a successful firm, but it should not be at the expense of a skewed
working capital or cash flow, since both can be detrimental to your existence.
Knowing your rivals is one of the most important aspects of selling against them. Take, for
example, the consumer durables market. In the television and fridge segment, there would be
ten distinct contenders. In addition, each competitor will provide ten different product lines.
For Sec A clients, they would offer high-end refrigerators and televisions, while for the price-
conscious section, they would have low-end and lower-priced versions. To introduce your
own product versions, you must first understand your competitors and their product lines. On
the other hand, in order to introduce a product that is unique in the market and has the first
mover advantage, you must be familiar with all of your competitors' products. As a result,
information is critical.
Demand is the quantity of goods or services that a consumer is willing to buy at a specified
price in a given time period, and market demand is the sum of all individual demand for items
from buyers in the market. When a buyer enters the market with the financial means to buy or
pay for a product, market demand rises.
Methods for increasing total market demand include:
Attracting new customers: To attract new clients, the company focuses more on developing
new incentives and other promotional activities. The company must be concerned about
customer feedback while maintaining a high-quality product, as this has an impact on the
market. It entails actions such as free sample, increased advertising, and increased usage:
Companies want to encourage the use of their products since it helps them sell more and have
a good reputation in the market.
Market demand is influenced by the following factors:
Recognizing a market need is a difficult activity, and many students struggle to understand
the graph work of economics. However, you can now overcome your problems with the aid
of increasing total market demand assignment help. The demand for any product is
determined by its price, and it fluctuates as the price changes. For example, a rise in price
may result in a fall in demand for that product, but a decrease in price may result in an
increase in demand for products.
Consumer preferences and taste: This component has a significant impact on demand for
goods and services since it evolves with changing fashion, consumer attraction to things that
are advertised more effectively, product quality, and so on. When a consumer's taste and
preferences for a product are greater, the demand graph will be higher.
People's earnings:
The bigger the customer's income, or purchasing power, the greater the demand for items,
and the lower the customer's income, the lower the demand for products. When a customer's
income rises, they prefer to buy more high-quality items without regard for their budget, and
the demand curve goes upwards; conversely, when a customer's income falls, they have fewer
desires for any products, and the demand curve shifts downwards.
Price changes in items and services:
When the price of any good changes, the demand curve shifts since many buyers like low-
cost goods, and if the price rises, they would rather buy the product's substitute. For example,
tea and coffee are replacements, and if the price of one product changes, customers will opt to
buy another to satisfy their needs.
Advertisement:
Demands are heavily influenced by advertisements created by various companies, which
focus on addressing consumers and influencing them through various promotional activities.
Newspapers, the internet, television, and radio are some of the several types of
advertisements that are used to successfully create demand by influencing people.
Customer expectations:
This is one of the most significant variables in raising demand, and it focuses on what
customers want. If the price of a good increases in the future for any reason, the client will
want to buy it in bulk so that they do not have to pay more money in the future.
When the market as a whole expands, the leading company usually benefits the most. If more
individuals take pictures, Kodak, as the market leader, stands to benefit the most. Kodak will
benefit enormously if it can encourage more individuals to take pictures, or to take pictures
on more occasions, or to take more pictures on each occasion. In general, the market leader
should seek out new customers, new applications, and increased utilization of its products.
Every product category has the potential to attract buyers who are unfamiliar with the product
or who are put off by its price or lack of specific characteristics. A merchant can usually
discover new customers in a variety of locations. Loria, for example, might gain new
fragrance consumers in its current markets by persuading ladies who do not normally wear
pricey perfume to try it. Or it could appeal to new demographic groups; for example, men's
scents are a small but rapidly rising market. It might also expand into other geographic areas,
such as selling its fragrances to Eastern Europe's emerging wealthy.
Johnson's Baby Shampoo is a great example of how to get new customers. When the baby
boom faded and the birth rate slowed, J & J's marketers noted that other Market leader
strategies family members occasionally used the baby shampoo on their own hair, and the
corporation became concerned about future sales growth. Management devised an adult-
targeted advertising campaign. Johnson's Baby Shampoo rose to the top of the shampoo
market in a short period of time.
2.2.2 Protecting Market Share

When attempting to extend the entire market size, the leader must also constantly defend its
current business from enemy attacks. Coca-Cola, for example, must always be on the lookout
for Pepsi-Cola. Similarly, in the two-wheeler industry, Hero Honda must continuously guard
against Bajaj, Honda, Suzuki, and TVS. The leader firm must maintain its costs low and its
price commensurate with the value that buyers see in the product under this strategy.

A market can safeguard its market position in six different ways:

(I) Position defense: This strategy entails pouring all of your resources towards the most
successful companies right now. As a result, rather than the direct attack that the defender
expects, an attacker usually takes an indirect strategy to overcome a position defense. HUL,
for example, upped its marketing expenditure on Clinic Plus and Sun Silk shampoos while
also offering significant price reductions.

(ii) Flanking defense: This strategy protects leading brands' market positions while also
developing some flank market niches that can be used as a defensive corner to shield a weak
front or construct an invasion base for counterattack if necessary. HUL's accomplishment in
nurturing its first Rs.100 crore Indian-made brand Vim in a competitive dishwashing industry
is an excellent example. Through product innovation, appealing public advertising, road
shows, and public relations, it was able to stave off competitor attacks.

(iii) Pre-emptive defense: This defense strategy man oeuvre entails launching an offensive
against an adversary before the adversary launches an offensive. In the early 1990s, Titan, for
example, introduced more brands and sub-brands to control the HMT watch market.

(iv) Counter-offensive defense: This is a strategy that involves finding a competitor's

vulnerability and aggressively attacking that market segment in order to force the competition
to refocus its efforts on defending its own area. When a leader is attacked, he has the option
of launching a counter-offensive from the attacker's area.

For defense, the attacker must send resources to this zone. When Coat tires challenged TVS
Sri chakra in Tamil Nadu, TVS chose to use novel efforts like road rallies, road shows, and
attractive public campaigns to spread its coverage to Coat tires’ hub in the north and west of
India.
(v) Mobile defense: This approach entails the leader diversifying and stretching its territory to
new market locations. Innovation operates in both of these directions when the leader is in
charge. A five-star hotel, for example, can work as a foreign exchange dealer, an inbound and
outbound trip operator, a flouriest, and so on. Diversification into related fields is one of the
elements of mobile defense tactics.

(vi) Contraction defense: This approach entails retrenchment towards areas of strength, and it
is frequently adopted at the end of a product's life cycle or after the company has been under
significant attack. For example, HUL chose to focus on its core business areas of soaps and
detergents, and as a result, it has emerged as the obvious leader in the toilet market.

Marketing is commonly thought of as a tool for business expansion. It can help a company
launch a product, break into a new market, or acquire market share from existing items in its
current market. However, there is an incumbent that must defend its position for practically
every new product launch, market entry, or industry upstart capturing market share. The
defender loses the base on which to construct its own growth if it can't hold on to what it has.

While much research has been done on marketing as an offensive strategy, there has been
surprisingly little done on how strong incumbents can use marketing to respond to new or
anticipated threats, whether they arise as a result of deregulation, patent expiration, changing
technology, or rivals' shifting competitive advantage. That's unfortunate, because many of the
marketing difficulties that defenders face is distinct. An incumbent, for example, typically
has an installed base of consumers, implying that the company has specific information about
the clients it wants to maintain and how it might keep them. However, a newcomer has the
benefit of cherry-picking prized consumers and looting the most fruitful sectors of the
market, whereas the incumbent must defend its whole customer base.

The first step in defensive marketing is to examine the weapons you have at your disposal to
defend your market position. Your brand identity, or how people perceive you; the mix of
products and services that support that identity, including their pricing; and the means of
communicating your identity, such as advertising, are all examples.

The efficiency of these weapons will be determined by a number of circumstances, including

your incumbent status. For example, if you want to keep customers or keep them from
defecting, you might decide to change your brand identity. However, this may be difficult:
While customers' impressions of a newcomer are likely to be changeable, their perceptions of
an incumbent are likely to remain solid. The defender may hold the customer's perception of
"legacy," but despite large advertising expenditures aimed at changing that view, the defender
may be stuck with that moniker.

Whether your valuable clients are vulnerable or not, the biggest problem is dealing with
them. The idea is to provide the valuable-vulnerable a cause to stick around without
providing a benefit that isn't required to secure their loyalty. Telstra needed to work out how
to price its services in a way that would protect the valuable-vulnerable from Optus' attempts
to entice them away without lowering the rates of the valuable–not vulnerable, customers
who were perfectly content with their present services at their current costs.

Markets are expanded by increasing utilization, new uses, or users. Leaders can protect
market share by keeping an eye on their position and quickly correcting any flaws. The
greatest strategy to protect market share is to keep on innovating.

A company's market share is a vital indicator of its competitiveness. A company's

profitability can be improved by increasing its market share. This is because as businesses
develop in size, they are able to scale as well, allowing them to provide lower pricing and
limit the growth of their competitors.

When attempting to extend the entire market size, the leader must also continuously defend
its current business from enemy attacks. The leader firm must maintain its costs low and its
price commensurate with the value that buyers see in the product under this strategy.

MARKET SHARE PROTECTION STRATEGIES:

1 Protect the first position

Like Tide laundry detergent with cleaning, Crest toothpaste with cavity prevention, and
Pampers diapers with dryness, position defense entails dominating the most desirable market
area in the minds of consumers, making the brand practically invincible.

2 Preventive defense

Attacking before the enemy launches an offensive is a more aggressive strategy. There are
various ways for a firm to begin a preemptive defense. It can either aim to accomplish Grand
market envelopment or wage guerilla action across the market, hitting one competitor here,
another there, and keeping everyone off balance. Local and regional banks now face stiff
competition from Bank of America's 13,000 ATMs and 4,500 branches around the country. It
has the ability to send out market signals to deter competitors from striking. It can roll out a
steady stream of new items while ensuring that they are preceded by pre-announcements and
planned messaging about future actions. Competitors may perceive preannouncements as a
hint that they will have to struggle for market share.

3 Counter-offensive defenses

Most market leaders will counterattack if they are assaulted. Counterattacks come in a variety
of shapes and sizes. In a counteroffensive, the leader can confront the enemy, strike its flank,
or use a pincer movement. Invading the attacker's main territory is an effective counterattack
because it forces the attacker to retreat in order to defend the territory. FedEx invested
extensively in ground delivery service through a series of acquisitions after watching UPS
effectively invade its aerial delivery system. The goal was to attack UPS on its home turf.
The use of economic or political clout is another common method of counteroffensive. The
leader may attempt to crush a competitor by subsidizing lower prices for the vulnerable
product with revenue from more profitable products; or the leader may prematurely announce
the availability of a product upgrade to prevent customers from purchasing the competitor's
product; or the leader may lobby legislators to take political action to stifle competition.

4 Contraction is a safeguard

Large corporations occasionally realize that they can no longer defend their entire region. The
optimal course of action appears to be deliberate contraction (also known as strategic retreat),
in which weaker territories are abandoned and resources are reassigned to stronger regions. In
2001, Diageo bought the majority of Seagram's brands and spun off Pillsbury and Burger
King so it could focus on alcoholic beverage powerhouses like Smirnoff vodka, J&B scotch,
and Tanqueray gin.

2.2.3 EXPANDING MARKET SHARE

"That share of the market commanded by a firm's product (or brand)," for example, is a
simple definition of market share. However, because this is a tautology rather than a
definition, it does not assist us grasp market shares. The fundamental difficulty is the
vagueness of the term market.

A market leader's profitability can be improved by increasing market share. Market share
profitability is raised, and market leaders who wish to keep their position and extend the
overall market defend the current market area.

Example- According to a survey released by Strategy Analytics on May 7th, 2020, Apple
Watch maintained its lead in the global wristwatch industry with a share of 55 percent in the
first quarter of the year. Market leaders such as HUL, Procter & Gamble, McDonald's, and
Titan can boost their profitability by growing their market share. To summaries, market
leaders who remain at the top have mastered the skill of extending the overall market,
protecting their current area, and growing market share and profitability.

All newcomers have a tough struggle in competing with highly aggressive market giants.
Consider the tea or coffee industries. No entrants dare to enter the market since Tata, HUL,
and Nestle have effectively guarded their market share.

When the overall market expands, market leaders typically gain the most. The focus of total
market expansion is determined by where the product is in its life cycle. When a product has
reached maturity, this method can be implemented. For example, the Japanese boosted
vehicle production in order to expand into new markets.

Market leaders such as HUL, Procter & Gamble, McDonald's, and Titan can boost their
profitability by growing their market share. To summaries, market leaders who remain at the
top have mastered the skill of extending the overall market, protecting their current area, and
growing market share and profitability.

All newcomers have a tough struggle in competing with highly aggressive market giants.
Consider the tea or coffee industries. No entrants dare to enter the market since Tata, HUL,
and Nestle have effectively guarded their market share.

Stage 1 : Analysis

1. Model Parameter Estimation: The next stage is to estimate the parameters of the models
once the relevant models have been picked. This step will employ statistical techniques such
as log-linear regression analysis and maximum-likelihood estimation. Even if the model
specification remains the same, it may be required to re-estimate parameters on a regular
basis. This is desirable not just for the purpose of adjusting parameter values to changing
situations, but also for enhancing estimate accuracy. 2. Decision-Related Factors Conversion:
The structure and occurrences in the market and competition are provided by the model
parameters themselves, which provide little information to the analyst or manager. Market
share responsiveness to marketing operations of own firm and competitors, as described by
market simulators, may be more immediately helpful information from the perspective of a
decision maker. It could also be a visual representation (map) of competing products/brands'
relative market positions. It takes a certain amount of inventiveness to create a presentation
that is easily comprehended by non-quantitatively minded management.
Stage 2: Planning and Strategy

The planning stage can be broken down into two parts: 1.Strategy Formulation: The
information gathered during the analysis stage is used to formulate marketing strategies in
this step. 4It is envisaged that descriptive, rather than predictive, methods of analysis will
provide concrete formulation ideas to the analyst and manager(s).

1.marketing tactics: For example, the visual summary may indicate more effective marketing
methods.

2. Forecasting and Planning: A marketing plan will be used to forecast future market shares
and sales volumes. It's pointless to talk about forecasts unless there's a clear plan in place.
Explicit assumptions regarding competitive activities, for example, are required by market
simulations. As a result, they generate conditional forecasts (i.e., conditional on these
assumptions). A strategy can be tested against a variety of competitive scenarios.
Furthermore, while searching for an ideal (i.e., profit-maximizing) plan is theoretically
possible, it is not necessarily realistic.

Stage 3: Follow Up

After marketing plans are implemented, it is crucial that the analyst evaluates the
performance of the firm's product/brand. A thorough examination of one's intentions and
actual performance would improve not only future planning but also market-share analysis
approaches. In order to do a follow-up, it is not sufficient to examine if market shares were
correctly projected. For three main causes, market shares and, as a result, actual sales volume
differ from predicted numbers. 1. Industry sales volume forecasts were incorrect. 2. Market
share forecasts were incorrect. 3. Marketing initiatives did not go according to plan. If actual
performance differs from what was expected, it is critical for the analyst to pinpoint the cause
of the discrepancy through meticulous investigation. The so-called variance analysis5 could
be effective in this situation.

Market Share Effects:

1. Economies of Scale Economies of scale relate to a company's cost advantage when it

increases its output level.

The benefit emerges as a result of a rise in a company's market share might enable it to
operate on a larger scale and earn more money. It also assists the organization in gaining a
cost advantage over its competitors.
2. A rise in sales

Increased market share can also enhance a company's overall sales. When consumers observe
that a majority of their peers are loyal to a particular brand, the remaining consumers are
compelled to buy that product.

3. A larger customer base

A rise in market share also aids in the expansion of a company's consumer base. When the
majority of a customer base is loyal to a single brand or product, the rest may follow suit.

4. Popularity

A rise in market share can benefit a company's reputation. A positive reputation, in turn, aids
in increasing sales and expanding the consumer base.

5. Taking control of the industry

A company's influence over the industry it operates in grows as its market share grows.

6. More negotiating clout

A corporation begins to dominate an industry as its market share grows. A firm can exercise
some powers, such as more bargaining power, with increased influence over the industry. The
corporation gains an edge and can bargain with suppliers and members of the distribution
channel to its benefit.

How do you grow your market share?

1. Creativity

Increased market share can be achieved through innovation. Product innovation, production
process innovation, or simply delivering new technologies to the market that competitors
have yet to provide are all examples of innovation. A corporation can get an advantage over
its competitors and dominate the industry through innovating.

2. Price Reductions

Lowering pricing can also help a company gain market share. Lowering prices will attract
more customers, allowing the company to expand its client base and increase revenues, so
growing its market share.
3. Increasing the value of customer connections by enhancing their current customer
relationships, Customer Relationship Management

Customer bonding is the process by which a business or organization establishes relationships

with its clients. The purpose of customer bonding is to help businesses protect their present
markets and avoid losing customers due to increased competition. This improves consumer
happiness, which leads to a growth in customer base through word-of-mouth marketing.

4. Advertising

Increasing market share through advertising is an expensive but effective strategy. With such
fierce rivalry in the market, advertising is a wonderful strategy to acquire a competitive
advantage.

Quality has improved.

Customers are becoming increasingly concerned about a product's quality as well as its
pricing. A company's market share can be increased by assuring greater quality standards.

6. Purchasing.

Purchasing a competitor is a surefire way to gain control of an industry. A corporation

obtains access to a new client base by purchasing a competitor, but it also eliminates
competition and helps build domination over an industry and boost market share.

2.3 MARKET CHALLENGER STRATEGIES

A market challenger is a corporation that aggressively floods the market with its products at
competitive rates in order to increase its market share. It is a company with a strong presence
that is just below the market leader (Pichon, 2015). A market challenger is a company or a
firm that ranks second or third in its industry. The primary goal of a market challenger is to
increase market share and become the industry leader by offering a new product line or
increasing customer service. Companies having a low market share, according to Ferrell and
Hartline (2011), frequently strive to improve their market share by using this method. By
implementing these methods, they can take on the market leader or other competitors. It is
not required for the market leader to be a competition when a brand enters a market. Even
companies in second or fourth place may become competitors if they cut into market share.
Frontal attack, flank attack, encirclement attack, bypass attack, and guerilla marketing are all
strategies that a brand can employ to combat these threats. According to Urban (2004), a
market challenger can launch a full-frontal assault by introducing items that are similar to the
market leaders in terms of quality, competitive pricing, aggressive advertising, and
distribution. To acquire market share, the ideal method is to create differentiated items that
will aid in the creation of their own brand name and aggressively push that product into the
market through various distribution channels. Any technique a company uses to gain market
share or knock down the market leader necessitates a significant financial investment (Parkin,
2009). It is a costly process to become a market challenger, and businesses should be aware
of this.

Challengers to the market smaller companies can use one of two approaches. They can take
an aggressive posture and fight other firms, including the market leader, in an attempt to
obtain market share and perhaps dominance (market challengers), or they might take a less
aggressive stance to protect the status quo (market maintainers).

Market challengers fight other companies, including the market leader, in an attempt to gain
market share and gain leadership, or they take a significantly less aggressive strategy and
accept the status quo ( market followers). Several variables must be considered when
choosing between the two, the most important of which are the costs of attacking other firms,
the likelihood of success, the final probable profits, and management's desire to engage in
what will almost always be a costly fi get. Fruean (1972, p. 100) has commented on the
question of returns, highlighting the consequences of spending irresponsibly, noting that,
particularly in mature markets, management can all too readily fall into the trap of chasing
market share that turns out to be ineffective.

This idea was followed up by Dolan (1981), who claimed that industries with stagnating
demand, high fixed costs, and high inventory costs experience the most severe competitive
competition. While there may be a need to gain market share in order to benefit from higher
economies of scale, the costs of doing so are significant, and the possibility of the pyrrhic
victory mentioned before grows dramatically. As a result of this, the strategist should have a
better understanding of the most cost-effective course of action.

In reality, this entails selecting one of the following options:

1. Attacking the market leader.

2. Targeting businesses of comparable size that are either underfinanced or reactive.

3. Targeting small businesses in the region.

When most businesses join the market, they make the error of focusing on the industry's top
player. They are just interested in defeating the best player. When you first enter a market,
though, your greatest competition is the one who surrounds you and eats up even a small slice
of your market share. It's improbable that the first brand on the market will be your opponent
if you're the fifth or sixth. In your situation, the fourth and third brands are more likely to
provide a market challenge.

FIVE STEP PROCEDURE:

1) Go for a direct hit.

A frontal attack occurs when a rival fights another based on the opponent's strengths, as seen
most prominently in the smartphone industry now, or more regularly in the Pepsi vs Coca-
Cola war since the centuries.

When Coke develops Diet Coke, Pepsi introduces Diet Pepsi as an example. Both companies
have a diversified product range and a strong product expansion strategy. Pepsi launches a
product in response to its market opponent in a direct frontal attack.

2) Attacking from the flank

Pepsi and Coca-Cola, for example, are two brands that are extremely powerful in the FMCG
sector and have no direct competitors. As a result, they attack from the front. What if a little
player is pitted against a colossus? The player then employs a flank assault, attacking the
competition's weaknesses. For example, many technology companies, such as AMD vs Intel,
Apple vs Microsoft, and others, employ a flank attack strategy.

3) An attack based on encirclement

This type of market challenger strategy is used when a rival assaults another on the basis of
both strengths and weaknesses, leaving no stone unturned in the process of destroying the
competition.

The current E-commerce scenario is the best example of an encirclement attack, in which E-
commerce corporations are willing to go negative in margins in order to outperform a
competitor on a turnover basis. By all means necessary, they aim to rise to the top and gain
the greatest number of clients.

4) Attack using a loophole

What happened to the Sony Walkman after the iPod was released? It simply sailed right
through it. There is no simpler example of a market challenger approach than the bypass
attack. A company with the ability to innovate employs this technique. When it innovates, it
avoids the competition entirely and creates its own market segment. Other competitors, of
course, quickly follow suit. However, in the long run, the attack is really beneficial for
building brand reputation and gaining customers.

5) Guerrilla marketing

Guerrilla marketing is a type of marketing that uses unconventional methods to reach out to
people.

Guerrilla marketing is all about making modest but impactful changes that keep your brand in
the spotlight and help it grow into a household name. A small company that wishes to
compete with larger brands will first establish itself in a local market, then offer price and
trade concessions.

Slowly but steadily, the little player's name will become known, and it will then engage in
branding as well as ATL and BTL marketing. The tiny player has grown into a successful
large player over time and has become a thorn in the side of all of the market's larger players.
Isn't this the story of any little business that has grown into a major corporation?

For instance, consider the AJE group. They have been in the market for numerous years with
their signature product, "Big Cola." It gradually grew in popularity to the point where the
brand can now be found in a number of nations.

The Benefits of Being a Market Challenger:

1.Market challengers can readily take advantage of competitors' faults or shortcomings to

gain market share.

2.Other businesses, particularly newcomers, view market competitors as aggressive or

proactive corporations aiming to overthrow any competition.

3.The time it takes for a product to reach the market is much shorter.

4.The costs of development and research are relatively cheaper.

Being a Market Challenger Has Its Drawbacks:

1.Customers are always comparing market challengers to market leaders. As a result, the
challengers will have to be at their best all of the time.
Because competitors aren't the first option of clients, it's tough for them to establish an
irreplaceable position in the market. They are acceptable as long as they can deliver the same
or better quality at a lower cost.

2.Customers will not identify the challenger as good enough to compete with the industry
leaders if it fails to produce the goods it claims.

3.To stay in the competition, challengers may have to take financial losses or reduce their
profit margins. It will be difficult to restore to more lucrative rates if a brand seeks to entice
customers and overthrow competition by dramatically decreasing prices.

4.A challenger strategy (such as the guerilla attack plan) might go awry if a brand hurts the
sensibilities of its clients.

2.3.1 CHOOSE AND ATTACK STRATEGY

Due to the large number of merchants selling comparable goods or services, the business
market is currently saturated.

As a result, you will become a market challenger in any market you choose to enter. You
must instill fear in potential market entrants in order to minimize the number of competitors.

Most businesses make the frequent error of focusing just on outperforming the industry's
leading competitor. They are oblivious to the fact that brands that come in second or third
place may pose a threat to them.

We've compiled a list of the top five market challenger methods you should be aware of in
order to safeguard your company:

1.Line of Defense

This is a direct assault based on the strength of the opponent.

Customers are usually attacked by providing them a lower price, a higher-quality product,
aggressive advertising, or better service. This is a hazardous attack because if you lose, your
sales, customers, and public image will all be for naught.

Frontal attacks come in a variety of forms:

Attacking from the front: a marketing fight to the death

Frontal attack with a limited number of targets: concentrated on a small number of clients.
Frontal assault based on research and development Create a product to take on the market
leader head-on.

In marketing, attack strategies are required. You are up against competition on all sides,
regardless of the type of goods or service you sell. You could be the market leader or you
could be in the middle of the pack. Understanding your current position and how to best
tackle the competition can help you gain a larger part of the market while also improving
your visibility, client loyalty, and revenue. To make the appropriate move, two of the most
prevalent types of attack methods necessitate a significant emphasis on your competitors'
strengths and weaknesses.

In marketing, a frontal attack approach involves a challenger going head-to-head with the
market leader. This entails focusing on the qualities of your competitors and matching your
own pricing, products, marketing, and promotions to the top brand. The winner is generally
chosen by who has the most endurance to last the longest, similar to a frontal attack in
warfare. Frontal assaults are hazardous because they pit your finest against the best of your
opponent. If you don't match up, you'll suffer losses in sales, customers, and public
perception. Let's face it: it's much easier to zero in on your competition's weak places and
outperform them than it is to take on the colossus head-on and risk losing. Pure frontal, which
is a head-to-head marketing battle; limited frontal, which is focused on specific markets; and
research and development, which entails developing a product to compete directly with the
market leader, are all examples of frontal attacks.

There are various sorts of frontal assaults:

1. Pure: It entails emulating competitors in every element of marketing.

2. Restricted: It entails targeting specific customer groupings.

3. Price-based: The competition matches every product attribute.

4. An attack on research and development

RCA, Xerox, and Univac, for example, attempted to take on IBM's mainframe industry but
failed due to a lack of competitive advantage. The Pepsi-Coke battles, which began in the
early 1900s, are an example of frontal attack methods. McDonald's McCafé’s, or coffee
shops, are considered as a direct challenge to Starbucks.

2. Defensive flanking
This entails going after the weak aspects of the competition. Based on geographic location, a
market competitor can identify weak points.

This implies that challengers identify areas where competitors are underperforming and
devise marketing strategies to address those issues.

Aside from that, they can use segmentation to challenge their rivals. This is where a
challenger finds a market gap that competitors have overlooked and develops a product to fill
it.

If executed correctly, this technique has the potential to improve your market position and
produce excellent outcomes.

A flanking assault approach in marketing, on the other hand, is aimed to induce competitors
to focus on attacking and surmounting their competitors' weaknesses. Customer segments
that are not reached or geographic areas that are disregarded by the market leader are
examples of weaknesses that generate opportunities for challenger brands. Because they
focus on slipping silently into an uncontested sector of the market, flank strategies are less
dangerous for competitors. The most difficult situation arises when a market leader detects a
competitor's entry into a market with a new product or service and then devotes all of its
resources to surpassing the opponent.

Attacking the opponent from the side is known as flanking. Because the enemy's might be
usually concentrated in the front, it's effective. By attacking from the side, you increase your
chances of hitting a weaker, less guarded position, giving you an edge.

It's a successful sales strategy that's been around for a long time. In sales, flanking causes the
prospect's selection criteria to move to requirements that favors your offering. Flanking has
never been more important than it is right now.

Flanking refers to attacking an opponent from the side. It's successful since the enemy's force
is usually focused in the front. Attacking from the side gives you a better chance of reaching
a weaker, less guarded location, giving you an advantage.

It's a tried-and-true sales method that's worked for a long time. When it comes to sales,
flanking causes the prospect's selection criteria to shift toward those that favors your product.
The importance of flanking has never been greater than it is now.

Basics of Flanking Strategy: Companies that utilize flanking marketing must avoid coming
into direct contact with their competitors' brands. Managers must ensure that a move is made
in an uncontested market area. It's also important to keep in mind that the man oeuvre should
be subtle and quick.

This marketing technique tries to establish a market presence before the competition does.
Firms must conduct in such a way that the competition believes the firm isn't a threat until it's
too late.

Flanking Strategies:

1. Flanking at a Low Cost

In this sort of marketing, the marketer employs this strategy in order to save costs by cutting
prices. The company has drastically reduced its price. As a result, the competitor has a
difficult time selling its product. This is due to the fact that the company sells equivalent
products at a lesser price.

2. Flanking at a High Cost

There are a range of products under this model for which the marketers benefit from a high
pricing. For several reasons, the higher price is preferable. On the one hand, the product is
more expensive, but it is of superior quality and has more features. On the other side,
charging a premium price allows the company to make more money.

3. Flanking Distribution

When creating a new distribution channel, this is used. A flanking marketing approach might
be used by the company to provide assistance.

1. Tesla's Flanking Strategy – Direct Distribution & Long-Range Electric Vehicles

2. Animal Friendly & Vegan Products – Lush Cosmetics Flanking Strategy

3. Dollar Shave Club Flanking Strategy - Low Prices and Direct Delivery

4. Hanes Flanking Strategy - Hanes flanked its competition by selling pantyhose through a
different distribution system, marketing its L'eggs brand hosiery in supermarkets while
competitors only sold in apparel stores.

3. Attack by Encirclement
Definition: The Encirclement Attack is a challenger firm's war tactic that aims to attack the
competition on all important fronts. In this technique, the challenging firm evaluates both the
opponent's strengths and weaknesses before launching an attack at the same time.

The encirclement attack is thought to be limited to corporations that are 10 times stronger or
more powerful than the opponent. The assaulting firm's resources must be sufficient; only
then will it be able to undertake a multi-front grand offensive.

Product and Market Encirclement are two techniques that can be utilized in an encirclement
attack. When a challenger firm engages in product encirclement, it may introduce a variety of
items with varying features and quality, and price them differently based on their utility.

In the case of market encirclement, the company may develop a product for a market segment
that has been left unexplored by competitors and hence has a large market share.

The e-commerce business is the clearest illustration of an encirclement attack, in which

companies are willing to go to any length for high profits, even selling things at a loss.

Another example is the fashion industry, where corporations routinely produce multiple
varieties of products, each priced differently, in order to generate a large sales turnover and
outperform competitors.

This entails simultaneously attacking competitors' strengths and weaknesses.

Encirclement is just a mix of frontal and flank attacks.

If a business wishes to employ this method, it must be excellent in all areas.

This can be accomplished by launching advertising campaigns to attack competitors and

compel them to defend themselves.

The market competitor will gain market share in this manner.

The Encirclement Attack is a challenger firm's war tactic that aims to attack the competition
on all important fronts. In this technique, the challenging firm evaluates both the opponent's
strengths and weaknesses before launching an attack at the same time.

The encirclement attack is thought to be limited to corporations that are 10 times stronger or
more powerful than the opponent. The assaulting firm's resources must be sufficient; only
then will it be able to undertake a multi-front grand offensive.
Product and Market Encirclement are two techniques that can be utilized in an encirclement
attack. When a challenger firm engages in product encirclement, it may introduce a variety of
items with varying features and quality, and price them differently based on their utility.

In the case of market encirclement, the company may develop a product for a market segment
that has been left unexplored by competitors and hence has a large market share.

The e-commerce business is the clearest illustration of an encirclement attack, in which

companies are willing to go to any length for high profits, even selling things at a loss.

Another example is the fashion industry, where corporations routinely produce multiple
varieties of products, each priced differently, in order to generate a large sales turnover and
outperform competitors.

An encirclement attack strategy involves attacking a competitor on multiple fronts at once in

order to disrupt them and steal market share. The premise is that the defender will be
disoriented and confused by the approach and will be unable to successfully protect all
portions under attack.

This type of market challenger strategy is used when a rival assaults another on the basis of
both strengths and vulnerabilities, leaving no stone unturned in the process of overthrowing
the competition.

The current E-commerce scenario is the best example of an encirclement attack, with E-
commerce corporations willing to go negative in margins in order to outperform a competitor
on a turnover basis. They aim to be on top and attract as many consumers as possible by any
means necessary.

4. Violation of Bypass

This is an indirect attack in which a market challenger attacks a less competitive market to
expand its resource base. This can be accomplished in a number of different ways.

Develop new products, diversify into unrelated products, or extend into new geographic
markets with existing products are examples of such strategies.

This technique is used to gain long-term dominance in the market you're in, and it's
particularly effective if the industry you're in is very competitive.
Definition: The Bypass Attack is the most indirect marketing approach used by a challenging
corporation to overtake a competitor by attacking their simpler markets. The goal of this
approach is to increase the firm's resources by capturing a competitor's market share.

Before launching the bypass attack, the company can choose one of three approaches:
diversify into unrelated products, expand into new geographic markets, or leapfrog into new
technology. Any of the approaches can be used as long as the company has sufficient
resources and is more powerful than the competition.

The term "leapfrogging" in new technology refers to a company conducting extensive study
before releasing the next generation technology in order to attract more customers and shift
the battleground to its own area.

This method is quite common in the mobile industry, as businesses release new technology
one after the other in order to outperform their competition. The bypass attack is followed by
well-known businesses such as Apple and Samsung.

Another example of this strategy is the rivalry between Coke and Pepsi. Pepsi utilized a
bypass attack on Coke by establishing the Aquafina mineral water brand before Coke's
Dasani brand.

A corporation that employs a bypass attack technique simply outperforms its rival. That
example, a company does not identify its competitor's weak spots or conduct counterattacks.
Rather, the company develops a new product and establishes its own market sector. However,
there are also options for fully bypassing the competition, such as expanding into previously
untouched markets. Diversifying your product portfolio with unrelated items.

Adding additional features to an existing product to update or modernize it. Of course,

competitors will catch up later, but the "trendsetter" will be able to establish a brand identity
in that market until then.

Pepsi Co.'s Aquafina

Pepsi Co's mineral water brand Aquafina is an excellent example of a bypass attack tactic.
Coca-Cola followed suit with its own mineral water brand when the business fully engaged in
a new market. Apart from that, the Apple iPod absolutely outperformed the Sony Walkman.

Bypass strategy, also known as a Leap Frog strategy, is a means to outperform or overturn
superior competitors in the corporate world by taking one massive, determined, merciless,
brilliant leap of intellect that leads to amazing growth, profit, and managerial position.
It primarily focuses on the marketing section of an organization, where top-level executives
collaborate with executives to develop marketing strategies to aggressively promote the
company. It produces a wide range of comprehensive plans for a variety of scenarios,
including fortress strategy, promotion strategy, expansion price strategy, pioneer strategy,
follower strategy, channel strategy, and what is now known as "leapfrog strategy."

This technique entails a challenger completely bypassing its competition and grabbing all of
the competitor's customers in one fell stroke. It's a game-changing approach that completely
changes the rules of the game. By developing new technology or developing new trade
models, a rival has the highest opportunity of "leapfrogging." For example, the introduction
of the iPod fully overtook the compact disc industry, and mobile phones are rapidly
displacing landlines in Africa and India.

This method is effective if it can be implemented. However, not all contenders will be able to
leapfrog. To win, the challenger must possess unique, distinctive, and game-changing
knowledge and technology that is superior and better in every manner to that of all traditional
competitors. The challenger must also have the ability to create and grow engineering
capabilities to turn that technology into a compelling solution.

This technique entails a challenger completely bypassing its competition and grabbing all of
the competitor's customers in one fell stroke. It's a game-changing approach that completely
changes the rules of the game. By developing new technology or developing new trade
models, a rival has the highest opportunity of "leapfrogging." For example, the introduction
of the iPod fully overtook the compact disc industry, and mobile phones are rapidly
displacing landlines in Africa and India.

This method is effective if it can be implemented. However, not all contenders will be able to
leapfrog. To win, the challenger must possess unique, distinctive, and game-changing
knowledge and technology that is superior and better in every manner to that of all traditional
competitors. The challenger must also have the ability to create and grow engineering
capabilities to turn that technology into a compelling solution.

5. Guerrilla Marketing

Guerrilla marketing entails achieving tiny victories that add up to a significant increase in
market share over time.
Typically, a small business will pursue this technique after proving its viability in the local
market. The pricing and trade reductions are frequently announced after that.

This is due to the fact that every major participant in the market started small. Furthermore,
this method has been shown to demoralize competitors, allowing you to solidify your position
in the sector.

As a result, market challengers must be aware of the macro-environment and do everything

possible to improve their market position. As a result, they have a number of market
challenger methods to select from.

Guerrilla Marketing's Purpose

Stand out from the crowd of paid adverts and establish a distinct position in the thoughts of
your clients.

Create a brand that will be remembered by the audience.

Attract media attention, as news organizations and media outlets frequently cover and
publicize guerilla marketing campaigns.

Guerrilla marketing comes in a variety of forms.

Ambient Marketing:

Ambient Marketing is a type of marketing that takes place in. It refers to the marketing of
goods and services via the use of natural elements, creative concepts, and unconventional
places. As a result, they make good use of the surroundings.

Frontline, a company that makes flea and tick protection for dogs, put up this clever image of
a dog-insect illusion to appeal to people's emotions by making it tough not to look at it twice!

In Japan, BIC's lawn mowing razor promotion created a big impression on people, prompting
them to wonder if the seemingly impossible task of shearing a lawn with a razor was actually
not so difficult with BIC's razor!

Ambush Advertising:

Ambush refers to a surprise attack carried out by someone hiding in plain sight. Ambush
marketing is when a marketer utilizes the word 'ambush' to gain an advantage over its
competitors by snatching the spotlight from them. It is one of the most important tactics in
brand wars since it allows a company to obtain greater exposure and capitalize on an
audience at the expense of competitors.
Nike employed surprise marketing to defeat Adidas during the 2010 FIFA World Cup. The
game's official sponsor was Adidas, although Nike promoted their wares through television
ads and celebrity football players.

Coca-Cola was the main marketing sponsor of the 2014 FIFA World Cup, while Pepsi
ambushed its marketing efforts by signing 19 well-known players.

Stealth or undercover marketing:

Undercover marketing refers to marketing that is discreet and 'hidden,' such that it does not
appear to consumers to be a marketing tactic. The concept is to sell things in a non-obtrusive
manner, as in the term "flying beneath the radar."

A person eating an ice cream bar, for example, would not expect the wooden stick to turn out
to be Colgate's doppelganger toothbrush.

Marketing that goes viral or creates a buzz:

Viral or buzz marketing tactics try to maximize a product's or campaign's word-of-mouth

marketing potential. It means to promote in such a way that it captures people's attention and
causes them to talk about it. This increases the target audience's receptivity and aids in the
spread of word about the product.

Tiger Woods PGA Tour 08 was released by EA Games with an unusual shot known as the
Jesus shot, in which Tiger Woods would dive into the water to play the shot. It was intended
to emphasis that in the game, players were able to hit shots while standing on water hazards.
This was eventually found to be done in order to generate excitement for the game.

Grassroots Marketing is a type of marketing that takes place at the grassroots level.

Grassroots marketing refers to marketing tactics that aim to reach out to a small group of
people in order to spread a brand message to a bigger audience and increase its awareness in
the marketplace.

The ALS bucket challenge, in which people were encouraged to pour a bucket of ice water
over their heads and then urge others to do the same, is an example of how grassroots
marketing helped promote awareness about the condition and drove people to donate money
to the cause. The goal was to motivate individuals to become involved and support the cause
from the ground up.

Marketing on the Streets:

The use of unorthodox marketing methods to promote a brand in streets and other public
locations is known as street marketing. The main goal is to leave a lasting impact on the
public by utilising a variety of new ideas. Customizing street components, organizing flash
mobs, creatively distributing items or brochures, and organizing roadshows or human
animations are all examples of activities.

McDonald's French fry street crossing is a great example of street marketing.

Graffiti Reverse Strategy:

Marketers have been known to take dirt and filth from a street or wall and stencil it to create
reverse graffiti. They leave an all-natural stamp on the audience and make a lasting memory.
The objective is to use the city as a "canvas" on which to spread their message.

Many well-known brands utilize reverse graffiti to promote themselves.

Marketing Through Experiential Learning :

Consumers are engaged through experiential or engagement marketing tactics, which involve
them in the brand's marketing initiatives. They serve to raise brand recognition and create a
bond between the brand and its customers. They are frequently event-driven.

For example, Coca-Day Cola's Valentine's happiness vending machine, which only appeared
when couples went by, was a brilliant technique that helped the brand capture people's hearts!

Guerrilla marketing's characteristics

Guerrilla marketing methods are unique and innovative, and they help a business stand out.
They include an element of surprise and out-of-the-box thinking.

Cost-effectiveness– They demand fewer cost inputs because the idea, not the quantity of
money invested, is the most important aspect.

Authenticity– To make an impression on the target audience, the techniques should be one-
of-a-kind and genuine.

Interactivity– Guerrilla marketing tactics allow firms to interact with their target audience and
better understand their needs.

Guerrilla Marketing's Benefits

Cost-effective– Guerrilla marketing methods are incredibly low-cost to use and do not burn a
hole in the brand's purse. They necessitate less expenditure and greater inventiveness.

Interaction with the audience: These methods enable brands to establish a more personal
relationship with their customers.

Guerrilla marketing tactics rely primarily on word of mouth, which is one of the most potent
weapons in any marketer's armory. To get people to talk about your products and services,
that is.

Impact creation: Because guerilla marketing tactics are unique, they leave a lasting imprint on
people's minds.

Publicity may snowball: These tactics can help a company expand its reach and reach a wider
audience. They aid in the creation of market awareness and buzz for the company's products.

Guerrilla Marketing's Drawbacks

Potential backlash: Audiences may object to the marketing technique, and the brand may be
forced to suffer the brunt of their hatred. As a result, brands should be mindful that if the
campaign is a failure, the brand image may suffer a boomerang effect.

Strategic risks: Because originality is in the eye of the beholder, guerilla marketing strategies
may be misconstrued. They may be biased against the brand due to a lack of clarity and an
openness to interpretations. There may also be instances where word of mouth backfires due
to factors beyond the brand's control.

Uncertainty: Because these techniques are shrouded in mystery, brands cannot be certain if
they will have a good impact. They'll have to take a chance and see if it pays off for them.

Legal risks: Brands should exercise caution while implementing these techniques, as well as
their product placements, locations, and other considerations, in order to avoid any legal
issues.

Unforeseen obstacles: There may be instances where the guerilla marketing campaign is
jeopardized due to inconvenient timing or terrible weather.
2.3.2 MARKET FOLLOWER STRATEGIES

The market follower strategy involves copying the market leader's products, services, and
strategies. The cost of inventing a new product, bringing in technology, breaking down
barriers to entry, and educating the market is borne by the innovator or leader. Another
company, on the other hand, could come along and imitate or improve the new product.

Although it is unlikely to overtake the leader, the follower can make a lot of money because it
did not have to pay for the innovation. Many businesses would rather follow the market
leader than challenge it. Many of the runner-up firms do not take on the market leader. When
you are a market leader, there will undoubtedly be market followers, according to the law of
business. Many businesses adopt a market follower strategy. In fact, all organizations’
competencies are so high in today's world that invention is swiftly duplicated or imitated in
many formats.

For example, (1)Apple pioneered multi-touch smart phones, but Samsung now dominates the
market in terms of overall revenue. In today's corporate climate, there are numerous market
follower tactics in use.

(2) We frequently find fragrances and deodorants on the market that seem and smell quite
similar to the original brand, but when examined attentively, they may change in terms of
appearance, color, or spelling of the brand name.

A number of these tactics are also applied in the apparel industry. Similar apparel and
emblems are used, but they are significantly less expensive and differ slightly from the
leader's offerings.

In a mature market, market followers are unavoidable. Because online marketing has reduced
entry barriers and bigger rewards, it attracts a larger number of market followers. As a result,
companies like Snapdeal, Flipkart, Amazon, and Jabbing have all started one after the other
in online commerce. Of course, eBay and Amazon were the market leaders. However, they
are now up against fierce competition.

A market follower is a corporation that mimics the actions of the industry leader. A market
follower, on the other hand, is the polar opposite of a maverick. Instead, it sits back and
watches what its competitors, particularly the market leader, do. It only follows the leader's
effective strategies after that.
"A corporation that is not the market leader but decides to maintain its position rather than
compete aggressively to grow its market share."

In a given industry, a market follower may be second to the market leader. It does not want to
lose market share by upsetting the established order.

This style of business never puts the leader in a position of weakness. It may, however,
usually sustain market share at a lower cost of investment than the market leader.

Because the market leader paid for the majority of the groundwork, the follower's investment
is lower.

For one or a combination of factors, it does not challenge the leader. Perhaps it believes that
the leader would win in a fight because it has more resources.

A market follower is a corporation that enters a product market after a competitor has
established a considerable market share.

The company that enters the market after the major one has a much lesser market share to
begin with. However, as a newbie, it has a significant advantage.

It reaps the benefits of the front-marketing runner's efforts. Consumers were educated as a
result of this marketing. To put it another way, the front-runner has already articulated why
customers should buy the product.

The front-runner has already invested money on getting the consumer to comprehend and
want the product.

Example of a market follower

Assume, for example, that Bicycles a Inc. is the first company to sell bicycles in the globe. It
has spent the last five years not just selling bicycles but also heavily advertising them.

Consumers were educated on the advantages of owning and riding a bicycle as part of the
advertising effort. Consumer education takes time and might be expensive.

Bicycles B Ltd. has now entered the market. Bicycles B does not require the same level of
promotion as Bicycles A.

Bicycles B does not need to invest money on consumer education because Bicycles A has
done so already.
As a result, Bicycles B has a significant advantage: cheaper costs. It has no desire to compete
with the market leader.

All Bicycles B cares about is gaining and maintaining a specified market share. It is content
to let the market leader maintain his position.

Market follower methods in video:

The first is one that tries to copy the market leader in as many markets as possible. It never
blocks the leader, though, because it prefers to avoid conflict.

Second, a corporation that tracks you from afar. In comparison to the leader, this company
retains a pricing, distribution, and quality advantage.

Third, a firm that selectively follows. This market follower is unable to duplicate all of the
market leader's operations. As a result, it only participates in some activities with the leader.

A counterfeiter is a person who makes a copy of another person's work.

The best example of counterfeiting is piracy, which involves selling the originals.
Counterfeiting involves thievery and is a black-market business technique, whereas cloning
involves production of marginally altered products. Pirated DVDs and CDs of movies and
music are the best example.

These are the four most common market follower tactics in use today. The adaptor and
potentially the imitator have a chance to overtake the market leader in these four categories.
Cloners and counterfeiters, on the other hand, will never be able to overcome the market
leader since they do not have their own manufactured products or brand equity.

Market leaders, on the other hand, are well aware that they will be followed and that market
followers will remain indefinitely. What strategy the market follower employs, whether white
or black, is entirely reliant on the market follower's perspective.

Market follower have four strategies:

1)Adapter

Adapter is a market follower approach for white collar workers. The adaptation variant of
market follower strategy is used by automobiles. Cars such as the Maruti 800, Alto, Zen, brio,
and others are all adapters, taking the finest attributes from one another while changing the
appearance of the vehicle. Similarly, technological adapters such as the Dell laptop and Sony
Vain laptop are available. These market laggards offer identical goods, but they aim to learn
from their direct competitors. Adapters can quickly get to the top because they can adapt,
learn, and produce a better product than the competitors.

Adapter is a white-collar approach to market follower methods. This is a common tactic used
by many businesses. In this situation, the follower companies' reproduced items are superior,
enhanced versions of the original products that are already on the market.

Adapters are capable of becoming leaders because of their ability to learn, adapt, and adjust.
Automobile businesses employ an adaptation type of market follower strategy.

2) Plagiarism

The best form of flattery is imitation. If you're a goods maker, however, such flattery can eat
into your profit margins. Imitators take advantage of your hard-won brand equity and produce
a product with the same features as yours, but at a lower cost.

The difference could be that the new product is constructed of inferior materials or lacks the
service or guarantee that your brand can provide. Nonetheless, there is a sizable market for
imitation, as many people cannot pay the higher price.

Imitation jewelers are the best and most well-known example of imitation as a market
following technique. The second example is Tata Sky's imitation, where Tata Sky was the
market leader and pioneered the digital television revolution in India, but Videocon, Airtel,
Reliance, and others quickly followed suit.

Imitators take for granted a company's hard-won brand equity. They plagiarize unique
products, give them the same characteristics, and then offer them for less. Imitated products
may not be of high quality or may not provide clients with the same level of service as the
original brand.

Because most people cannot buy the original goods, the market for imitators and their low-
cost imitations grows.

Imitation jewelers, for example, is the best and most common example of imitation as a
marketing approach.

3) The Cloner
Between an imitator and a cloner, there is a silver lining. While an imitator may imitate some
of your product's characteristics, it also keeps its own. Timesjobs.com, for example, is a
knockoff of naukri.com, however times jobs have its own distinct product features.

However, if you get Rado watches or Gucci bags with Rado spelled as RADA and Gucci
typed as GUCCA, that's copying. Cloning entails creating a product that is identical to yours
but with minor differences. Cloning takes use of well-known brands and produces products
that are nearly identical.

Try to buy Samsung phone clones the next time you're in Bangkok. The similarities between
the original and the clone will astound you.

A clone is an exact replica of an original product with a different branding. Along with the
products, even the product's name and brand design or packaging are reproduced with minor
differences.

When counterfeiting Rado watches or Gucci bags, for example, Rado is spelled RADA while
Gucci is spelled GUCCA.

4) A counterfeiter is a person who makes a copy of another person's work.

The best example of counterfeiting is piracy, which involves selling the originals.
Counterfeiting involves thievery and is a black-market business technique, whereas cloning
involves production of marginally altered products. Pirated DVDs and CDs of movies and
music are the best example.

These are the four most common market follower tactics in use today. The adaptor and
potentially the imitator have a chance to overtake the market leader in these four categories.
Cloners and counterfeiters, on the other hand, will never be able to overcome the market
leader since they do not have their own manufactured products or brand equity.

Market leaders, on the other hand, are well aware that they will be followed and that market
followers will remain indefinitely. What strategy the market follower employs, whether white
or black, is entirely reliant on the market follower's perspective.

2.3.3 MARKET NICHER STRATEGIES

A market nicher approach is defined as a small set of clients seeking specific items or
services. They have well-defined wants for which they are willing to spend a higher price for
a specific product (service) or its quality in order to be satisfied.
A niche marketing strategy is one that focuses on selling or advertising a particular product or
service to a small yet productive target group. It only appeals to customers who can relate to
the product or service in question. With this limited group of clients, the corporation aims to
establish a long-term relationship. Some people mistakenly believe that the number of
potential clients targeted determines profitability and success.

A nicher market strategy includes a significant number of potential purchasers who are
diverse, geographically dispersed, and varied in terms of wealth, social standing, and
educational accomplishments. Naturally, many businesses create items or services that appeal
to a broad audience or are intended to gratify a huge number of people, and this is referred to
as mass marketing.

Many people believe that targeting the mass market in any product category has the
advantage of being large, and that achieving three to five percent of the market share would
be enough to run a profitable firm. However, given the enormous market size, there may be
so many companies, each with their own strengths and weaknesses, that cornering even a
small portion of it may be difficult. Even if the market is broad and diverse, a large ad may be
required to stand out in a crowded market.

Niche Technique's Importance: This strategy is especially beneficial for small businesses
with limited resources and specialized products. However, even huge corporations with mass-
market products can employ this method to target niche markets. Customers are targeted by
businesses based on demographics, interests, occupations, or social causes. Because niche
products are typically high-involvement, it's critical to have a solid marketing and growth
strategy in place.

specialized market strategies:

1. Determining who your target audience is (niche market benefits)

You've opted to target a certain audience that isn't the general public. The next step is to
determine the age group, geographic region, needs that the product will address, social status,
and other relevant factors. According to Linda Fleckenstein, "we have to be really specific
here." And we shouldn't use terms like "teenagers," "young ladies," "young men," "kids," "the
American fast-food market," or "wealthy businesspeople searching for real estate
investments" in our statements.

IT marketing organizations, the financial services industry, and the automotive industry all
look to be too generic to be categorized as niche markets in the B2B world. Companies that
sell low-cost electric automobiles in China could be a smart approach to establish specialized
market benefits. Similarly, teenage girls in India's metro cities wearing premium jeans with
low waist characteristics in the 13-16 age group are a more realistic representation of the
target market than teenage females preferring western-style clothes.

2. How do I choose a focal point? (Niche market benefits)

We need to build the focal area now that we've defined the target audience, and the
description shouldn't be too broad. Many people make the error of focusing on the most
profitable or fastest-growing industry. A pharmaceutical marketing specialist with a decade
of experience may struggle to establish a pharmaceutical manufacturing or retailing business.
His skill set is marketing, therefore sourcing drugs from manufacturers and selling them
under his own brand name would be a good fit. Again, if all medical specialties are targeted,
the investment and dangers are higher. If the focus is solely on cardiac or neuropsychiatric
medications, the market will be narrowed and hence easier to create. It all depends on the
entrepreneur's domain knowledge and experience.

Many individuals jump into domains they've never heard of, and the only reason they do is
because it's exhibiting tremendous income and return on investment growth. Trends change
quickly, and by the time the new company established itself, the niche industry's positive
trend may have shifted.

Furthermore, due to a lack of industry knowledge and competence, a successful trader who
hops on the IT or software bandwagon just because it's hot may burn his fingers. Such a
person would be completely reliant on someone else to operate the firm from the beginning,
making them more likely to lead in the incorrect way or to be duped.

Entrepreneurs should construct a checklist of their core abilities before entering into
something new, according to Fleckenstein. They must highlight their strengths, preferred
work, knowledge areas, accomplishments, and life lessons acquired. A new venture's success
is dependent on interest and experience.

3. Determine the customer's requirements (nicher market benefits)

A well-known business model for success is to find a need and fill it. The majority of
business success stories stem from a sharp sense of identifying a problem and providing a
solution. It applies to the software business, where anti-virus software was developed to
address the requirement to remove viruses or Trojans that corrupt files or cause a computer to
malfunction.
Market surveys, informal conversations with potential customers, and secondary data are all
methods for determining consumer demands. There are research firms that produce market
surveys on niche market strategy sectors, and this could be a fantastic place to start when
determining who your target market is. Direct communication with clients is sometimes the
most effective technique.

Initially, just photocopiers were available, but as businesses sought a single device that could
perform all office activities, multi-function electronic devices including the fax, copier,
printer, and scanner were developed.

In India, today's popular toothpaste started out as a powder, but the need for a convenient
paste version in sealed tubes sparked a new market that has now eclipsed tooth powders and
other forms of teeth cleaning products.

4. Look for consumers who have been overlooked (nicher market benefits)

There may be some target audiences that aren't being served by established mass marketers,
and niche marketing can fill that gap. Provided no vendor or grocer is delivering fruits and
vegetables or prepared food in a particular area, for example, there is a strong possibility to
supply such services if the people who reside there have a true demand. The demand for
home delivery of daily usage food and groceries may be higher if it is made up of older
individuals living in high-rise residential units. Similarly, most health and fitness centers
cater to the young; if a certain neighborhood has a higher number of senior individuals
seeking exercise and fitness, a wellness center geared on the elderly would do well.

Many real estate professionals may overlook first-time buyers seeking economical but
comfortable housing. If there are no such service providers in a location, the company's
concentration may be on this small segment, where it can capture more than 80% of the
market share, despite the fact that the wider real estate market catering to all categories may
appear more enticing.

5. Put the qualities together in a logical order (niche market benefits)

According to Fleckenstein, once the entrepreneur has identified the target audience, the
attributes, and the need it serves for the client, they must still synthesize the qualities of the
new product or business.
It should adhere to the entrepreneur's long-term vision, there should be a genuine need for the
product, the strategy should be well-thought out, the product or service should be unique in
the market, and there should be the possibility of developing new products around it while
maintaining the core niche market strategy already identified to start a business.

6. Assessment (nicher market benefits)

The next stage is to analyses the synthesizing criteria given above once the product blueprint
is complete and the target audience has been determined. Is it in compliance with the given
qualities, and if it isn't in compliance with a few of them, is it better to discard the product
and try something new? The evaluation should assist firms to make the best judgments
possible, rather than being guided solely by hearsay, intuition, and popular perceptions of a
market that may or may not be accurate.

7. Test marketing (niche market benefits) Before moving ahead with full manufacturing of a
product or service launch, many large corporations debut a new product in certain areas to
evaluate audience response and feedback from sellers. A chosen set of clients is given the
opportunity to acquire and utilize the product in test marketing. To measure consumer
response, big corporations frequently give away free samples or participate in trade shows.
Alternatively, they may arrange mini-seminars to present a product and solicit feedback from
a restricted group of users. After receiving input, it must be assessed and any necessary
changes made.

8. Implementing the idea in the market (niche market benefits) The actual introduction of the
product into the market is the final stage in the niche market strategy entry procedure. If the
product is a beauty product offered through pharma retail stores, adequate quantities must be
created, orders must be collected from retailers, or the product must be introduced in
collaboration with distributors. This is the most critical step of specialty marketing, according
to Fleckenstein. He claims that if enough research has been done, launching the product is
just a calculated risk.

Nicher marketing provides various advantages over mass marketing, particularly for small
enterprises with limited funds. If there are many competitors, a niche market player is more
like a big fish in a small pond, whereas a corporate entity in a broad market is more likely to
be a tiny fish in a big pond.

Because the nicher market strategy is targeted to the needs of the tiny group it is targeting, the
product could have a significant impact on the market because there is a compelling motive
for individuals to purchase. A strong niche market position aids a corporation in defending its
position and entering a new nicher market. On the other hand, the mass market will draw in
new participants as competition heats up, leaving existing firms with a reduced slice of the
pie.

In the nicher market, organic growth is conceivable because customers will spread the word
about the product's benefits and recommend it to others.

A defined market position that targets nicher market benefits, according to marketing experts,
is a definite formula for success that provides short-term prospects, cash flow, and the
potential for long-term business maturation beyond the initial nicher position.

First-time entrepreneurs in nicher markets must be self-motivated, goal-oriented individuals

with the determination and optimism to succeed in the face of adversity. Most of the time,
there is no precedent for the product or service because it is a novel concept. As a result, the
business's success will be determined by the homework and measured risks made.

Finance, tourism, information technology, beauty and fitness, health, ago-processing, food
processing, manufacturing, electronics, electrical engineering, and other industries can all
benefit from nicher market benefits.

Nicher are capable of performing the following specialized roles:

1. The end-user expert

When a company specializes in providing a specific type of customer,

Johnson & Johnson, for example, is a company that only makes infant-care items.

2. Customer experts - When a company only sells to a certain group of clients.

Nobel Hygiene Adult Diaper, for example, launched the adult diaper brand 'Friends.'

It is the market's undisputed leader. This product's target market is quite precise.

3. Geographical expert

When a company sells a product in a specified geographic location.

For instance, Cuba is known for its cigars.

4. Product or product-line specialist A company that focuses solely on a single product or
product line.

Example (I): Ray-Ban is a sunglasses company that only sells sunglasses.

(ii) IKEA sells ready-to-assemble furniture, kitchen appliances, and home accessories, among
other helpful items.

(iii) Decathlon, a French firm, is the world's largest athletic goods retailer, with over 1,500
locations in 57 countries.

5. A job-shop expert

When a company's manufacturing is based on consumer orders. Dell provides consumers

with customized PC solutions. Subway provides clients with personalized sandwiches that
include a variety of items.

6. Price-quality expert

The firm meets the high quality and low-price ends of the market. Future Group's Foodhall,
an Indian luxury food supermarket, offers high-quality products at premium rates.

7. Customer service expert

When a company supplies customers with one-of-a-kind or rare services.

Example: (I) Airbnb is a good example.

8. Product Feature Specialist The firm's specialty is the offering of a specific type of product
or product feature.

Example: (I) GoPro, for example, is a company that makes action cameras.

(ii) Marshall Amplification is a British firm that designs and manufactures amplifiers.

It deals with music amplifiers, speaker cabinets, and headphones and earbuds from various
companies. The Marshall guitar amplifiers are well-known all over the world.
2.5 KEYWORDS

 Smart Expansion: Expansion alone for the sake of expansion might be harmful.
Maintaining a tight check on the company's cash flow is vital to its success, as all
strategists recognize. If you use your working capital for expansion, it will have an
influence on even your developing company divisions, requiring you to cut down on
critical activities.

 Contraction defense: This strategy comprises retreating to areas of strength, and it's
typically used near the end of a product's life cycle or after a severe attack on the
organization. HUL, for example, elected to concentrate on its core business of soaps
and detergents, and as a result, it has risen to the top of the toilet industry.

 Guerrilla marketing : Guerrilla marketing is a style of marketing that employs

nontraditional ways to reach out to customers. Guerrilla marketing is all about
making little but significant adjustments to your brand that keep it in the spotlight
and help it become a household name. If a small business wants to compete with
larger brands, it must first establish itself in a local market before offering pricing
and trade concessions.

 Flank Defense: Flank Defense is a marketing approach in which a market leader not
only provides Position Defense but also establishes an outpost to protect a weak front
or serve as a counter-invasion base. For example, has set a high price per minute,
despite the fact that it is still in its early stages of development, and has spent that
money heavily on advertising, which has helped the company turn around its
fortunes.

2.5 SUMMARY

 Market Challenging Techniques are marketing techniques employed by companies in

third or second place in a market to pursue the market leader or a direct competitor in
order to achieve a larger market share and generate large profits.
  Position defense, flanking defense, pre-emptive defense, counter-offensive defense,
mobility defense, and contraction defense are six common defense strategies
employed by market leaders to defend their market share against rivals.

 Companies that are market leaders profit the most as the market grows. The location
of the product in its lifetime determines the focus of expansion in total markets.

 Markets can be enlarged by increasing usage, adding new uses, or adding new people.
By keeping an eye on their position and rapidly rectifying any errors, leaders can
protect market share. The best way to keep your market share is to continuously
innovating.

 Increased market share can boost a market leader's profitability. Market leaders who
want to preserve their position and expand the entire market defend the current market
area as market share profitability rises.

 Customer bonding is the process by which a company or organization forms bonds

with its customers. Client bonding is intended to assist businesses in protecting their
current markets and avoiding customer loss due to rising competition. This increases
customer satisfaction, which leads to an increase in customer base via word-of-mouth
marketing.

 A niche market approach involves a large number of potential buyers who are diverse,
geographically separated, and diverse in terms of wealth, social status, and
educational achievements. Naturally, many firms offer products or services that
appeal to a wide audience or are intended to satisfy a large number of people, which is
known as mass marketing.

 Niche - a place, employment, status, or activity for which a person or thing is best
fitted

2.6 LEARNING ACTIVITY

1.What are the market leader's strategies?

___________________________________________________________________________
___________________________________________________________________________
2.Challenger employs which strategy?
___________________________________________________________________________
____________________________________________________________________

2.7 UNIT END QUESTIONS

A. Descriptive Questions

Short Questions:

1. How can a market leader increase the total market size?

2. Can you give me an example of a market challenger?
3. Which marketing method is the most effective?
4. What are the market leader's strategies?
5. Challenger employs which strategy?

Long Questions:

1. In a changing climate, what strategies has the organisation implemented to become

the market.
2. What are some of the ways a market leader might try to keep competitors out of the
market?
3. What strategy should market challengers use to take on market leaders?
4. What are the different types of offensive strategies?
5. How do a market leader's and a market challenger's marketing methods differ?

B. Multiple Choice Questions

1. In terms of competitive positioning, a company that is not the market leader but is
competing hard in its industry to gain market share is categorised as. Choose the
appropriate option.
a. market leader

b. market follower

c. target market

d. market disruptor
2. The corporation with the biggest market share in its industry is classed as
______________, based on competitive positioning. Which of the following is the right
answer?
a. market challenger

b. market leader

c. market follower

d. target market. 

3 The key aim of market leader strategy is to ______________, according to competitive

positions. Which of the following is the right answer?

a. increase market share

b. uses an indirect attack

c. use multiple niches

d. a full-frontal assault

4 The type of advertising approach adopted by the corporation to attain its goals is classified
as. Which of the following is the best choice?

a budget for advertising

b a plan for advertising

c a goal for advertising

d. commercial messages

5 When a market challenger attacks the market leader, it is referred to as a market takeover.

a) High-risk plan

b) No-risk strategy

c) Low-risk strategy

d) None of the above

Answers
1-d, 2-c, 3-b, 4-b, 5-a

2.8 REFERENCES

References book

 Market Follower Strategies by Hitesh Bhasin .

 Digital Marketing Courses Published by MBA Sokol Team (2017) .
 Business Strategy: Essential You Always Wanted to Know : Second Edition (Vibrant
Publishers)
 Win: The Key of Principles to Take Your Business from Ordinary to Extraordinary by
Frank Lutz.

Textbook references
 Permission Marketing by Seth Godin.
 Misbehaving: The making of Behavioral Economics by Richard Thaler
 Marketing Challenges: Cases and Exercises by Christopher Lovelock Charles
B.Weinberg
 eMarketing: The essential Guide to Marketing in a Digital World by Rob Stroke and
the creative minds of Red & Yellow. (Edition Six)

Website
 https://www.marketingtutor.net/market-challenger-strategies/
 https://freecourses.net/marketing/market-leader-strategies/
 https://www.yourarticlelibrary.com/marketing/market-leadership-strategies-
explained/43538
 https://nscpolteksby.ac.id/ebook/files/Ebook/Business%20Administration/Strategic
%20Marketing%20Planning%20(2009)/13.%20Chapter%2012%20-%20The
%20Formulation%20of%20Strategy%203-Strategies%20for%20Leaders-Followers-
Challengers%20and%20Nichers.pdf
 https://www.ipay88.com/5-best-market-challenger-strategies-that-you-need-to-know/
UNIT-4 PRODUCT DIFFERENTIATION AND BRAND
POSITIONING WITH COMPETATIVE PRICING
STRUCTURE

4.0 Learning Objective

4.1 Introduction
4.3 Product Differentiation
4.3.1 Developing positioning strategy
4.4 Brand Positioning
4.4.1 Concept of Brand
4.4.2 Product Branding Challenge
4.4.3 strategies brand management & positioning process
4.4.4 Identifying and establishing brand positioning
 4.4.5 Idea Behind Brand positioning
4.4.6 Brand positioning Guidelines
4.4.7 Tactics for strong brand positioning
4.5 Competitive Pricing
4.5.1 Pricing Strategies
4.5.2 Price cut and increases according to competitors
4.5.3 Competitors reaction to price Changes
4.5.4 Advantages of competitive pricing strategy
4.5.5 How to calculate competitors-based pricing
4.6 Summary
4.7 Keywords
4.8 Learning Activity
4.9 Unit End Questions
4.10 References

4.0 LEARNING OBJECTIVES

After studying this unit, you will be able to:

 Describe product differentiation

 What is brand positioning
 How is brand positioning done?
 What is competitive pricing in detail.

4.1 INTRODUCTION

All vendors' offerings are, in practice, distinct from their competitors'. Differentiation might
be based on product features. It's also possible that it exists in terms of the circumstances of
the sale It's also possible that a business's product is the photos of its employees, as well as
the sort of work they do, help to distinguish them.
Its mode of dissemination is Any distinction made by a company provides it with a partial
competitive advantage. monopoly.

4.2 PRODUCT DIFFERENTIATION

Differentiation as a Concept
With a whole market strategy, a company may face significant competition in the
marketplace. Competitors are almost usually attracted to a vast market. To be effective, the
marketing executive will frequently employ a differentiation approach, which involves
convincing customers that the firm's product is unique (i.e., better) than that of rivals. If there
is a major reason for differentiating the goods (or services) of one seller from those of
another, a general class of product is differentiated. Such a foundation might be genuine or
imagined, as long as it is important to customers and leads to a preference for one product
variation over another. Differentiation might then be based on something else. "The process
of designing based on particular aspects of the product itself, such as exclusive patented
features; trade names; peculiarities of the package or container, if any; or distinctiveness in
quality, design, color, or style," according to Philip Kotler. It might also be present in relation
to the terms of its selling. For example, in the retail trade, these conditions include the seller's
or channel members' convenience, the general tone and character of his establishment, his
way of doing business, his reputation for fair dealing, courtesy, and efficiency, and all
personal links that connect his customers to himself or those employed by him. Insofar as
these and other intangible variables change from one seller to the next, the offer in each case
is unique, since purchasers take them into consideration, more or less, and may be said to be
acquiring them along with the product itself. When these two dimensions of differentiation
are considered, it is clear that practically all product offers are differentiated, at least
marginally, and that difference is important across a wide range of economic activity.
Differentiation refers to more than only the variations in quality, design, patents, trade names,
and other characteristics that separate one product from another. Even if they are meant to
establish some level of market dominance, such distinctions are planned by manufacturers
and have their source in the production function.
Differentiation is frequently employed to gain market dominance, but all businesses know the
distinctions they might exploit, which are based on customer tastes and preferences. To put it
another way, what we know about the economic and noneconomic components of customer
behavior allows a company to improve its market advantage by creating actual or imagined
distinctions regarding its market offer. If such distinction exists, even if it is little, buyers and
sellers will be matched based on their preferences rather than by chance and at random. The
firm's endeavor to build and promote the notion of difference may be seen in its products,
services, image, status implications, quality, distribution channels utilized, and any economic
or noneconomic element. Opportunities for Differentiation Depending on the type of business
You should be familiar with the notion of differentiation by now. Differentiation
opportunities varies depending on the industry. The Boston Consulting Group has recognized
four sorts of industries (BCG).
These classifications are based on the industry's size and the number of competitive
advantages available. The BCG competitive advantage matrix is depicted in the figure on the
next page. Based on the scale and distinct benefits provided to the businesses, the matrix
identifies four sorts of industries. The volume industry, the stalled industry, the fragmented
industry, and the specialized industry are the four types. Let's have a look at them now: a
series of significant characteristics that distinguishes the company's product from those of
rivals" 1 . Because the distinctions are frequently more imagined than actual, the technique
entails creating a distinction based on quality, worth, or some other criteria. The Volume
Business: A volume industry is one in which a company can achieve just a few but significant
competitive advantages. There may be a plethora of instances of such a business. One of
these businesses is the construction materials sector. Such an industry might follow a strategy
of positioning itself as a low-cost leader or a one-of-a-kind provider of service or quality. If
its policy is effective, it will be able to skim the cream and collect a significant amount of
money. The amount of profit a corporation may make from such practices is determined by
the market share it has acquired or the size of the company.

Fig 4.2.1 Boston consulting group advantage.

The Stalemated Industry: A stalemated industry is one that has just a few competitive
advantages due to its modest size. There are several examples of stalled industries, just as
there are numerous examples of volume industries. The oil industry is one example of such a
business. An oil company's product is difficult to distinguish from those of competitors.
Reduced oil extraction costs are also challenging to achieve. Recruiting highly qualified
salesmen, offering loan facilities, and so on are some of the ways it might distinguish its
service. However, the corporation should keep in mind that these steps will only provide a
little competitive edge. In a stalemated industry, a firm's market share is unrelated to its
profitability.

The Fragmented Industry: A fragmented industry is one in which a particular industry has
various competitive advantages due to its tiny size. There are several examples of
fragmented industries. One of the instances is a fast-food restaurant. The fast-food restaurant
may differentiate itself in a variety of ways. However, because market share cannot be
grown widely, such distinction cannot provide corresponding revenue. In a splintered
industry,

The Specialized Industry: A specialized industry is one that benefits from a significant
variety of differentiating advantages.

One of the most significant conditions for a sector to be classified as specialized is that each
of the differentiation opportunities must be substantial enough to provide a healthy profit for
the firm. The specialized industry includes any company that makes specialized things or
sells specialist commodities to certain market segments. The profitability of a company in
this industry is unrelated to its size.

In a specialized sector, both small and large businesses can prosper. Milind Lela highlighted
five parameters in which companies differ in their potential mobility. Target market,
product, channels, pricing, and marketing are the parameters. The location of a firm in the
industry and the structure of the industry determines which of the above dimensions it will
move. In order to choose the dimension, a corporation first calculates the return on each
feasible move, then chooses the one that offers the best return.

Profitability has little to do with the size of the company in issue. It is possible for businesses
of any size to generate a profit or lose money.

Major Firms Can Choose from a Variety of Differentiating Variables Based on the amount
of potential competitive advantages and their scale, you're already aware of four categories
of industries. You're also aware that a company's potential mobility has five dimensions.
You should now have a clear understanding of how a firm may set itself apart from its
competitors' offerings. Products, services, staff, channel, and image are the dimensions in
which a firm might differentiate its offer. We'll take a closer look at the above-mentioned
measurements now. Look at the table below for a bird's eye view of these dimensions:

Fig 4.2.2 Major Differentiating Variables

A. Product Distinguishing Factors

In every business, most brand leaders choose to differentiate their products. The fact that
cellulose tape was dubbed "Sellotape" and vacuum cleaners were dubbed "Hoovers" is a
testament to the inventors. They become the natural first-choice brands that all rivals are
measured against. Markets maturing imply increased rivalry for market share, as well as the
use of marketing research and experimentation to identify strategic methods to segment and
distinguish products in existing big volume markets. To be effective, the marketing
executive will frequently employ a product differentiation approach. Product differentiation
is one way for a marketer to appeal to selective purchasing motivations. If there is a strong
reason for differentiating the goods or services of one seller from those of another, a general
class of product is differentiated. As a result, items are differentiated if the consumer
perceives them to be distinct. Differentiating standardized items is quite tough for marketers.
There are examples of companies that have effectively differentiated their standardized
products.
There are several items that can be clearly distinguished. Automobiles and furniture are two
examples of things that have effectively separated themselves from one another. Significant
modifications in the design or performance of a product can be made if it is a unique object,
such as an automobile. When a product is generic, such as gasoline or sugar, customers are
less likely to notice distinctions between different producers' offers. As a result, each
producer should pursue a product differentiation strategy. A product's features, performance,
compliance, durability, dependability, reparability, style, and design may all be used to
differentiate it. Let's take a closer look at each one: Features: A product performs a basic
purpose. By adding some qualities to the product, the fundamental function may be
enhanced. Features are traits that go beyond the product's fundamental function. In order to
attract clients from different groups, marketers increasingly provide their products with
varied qualities by adding characteristics to them. A corporation can generate numerous
versions of the original product by adding new features to attract new customers. Additional
functions such as an alarm clock, calculator, memory book, and so on can be added by a
wrist watch maker.

As a result, the corporation wants to reach out to new client categories. By establishing
oneself as a pioneer in introducing new features to its products, a corporation may skim the
cream. However, in order to succeed, such a man oeuvre must be tactical. It's challenging,
but not impossible, to find and select new features to add. There are a variety of methods for
finding and choosing new features, including conducting interviews with recent consumers.
Questions on consumers' preferences for a specific product brand, the product's qualities,
difficulties customers have with the product, ideas for product enhancement, pricing
perception, reactions to other customers' suggestions, and so on may be included in such an
interview. As a result, a firm might get ideas for features that could be added to differentiate
its product from rivals'.

The corporation must now select which features it can and should add to the ones already in
place. By matching the cost of engagement with the perceived worth of consumers, a
decision may be made. As a result, each of the new features should be compared in order to
determine which one (s) should be implemented. To grasp the equation, consider the
following example.

Let's say a wristwatch maker is exploring three different enhancements. Alarm, for example,
would cost the corporation Tk. 50 every watch, as stated in table 5.2. Customers value an
alarm facility at Tk.150, according to consumer interviews and surveys. For every Tk 1
increase in the cost, the manufacturer might produce Tk.3 of increased consumer happiness.
Customers, for example, value calculators at Tk. 300. Calculator, for example, would cost
the corporation Tk. 75 every watch. On the other hand, adding a memory book to a watch
costs Tk. 125, and clients value that Tk. 250. Based on these three equations, it can be
determined that introducing calculating facilities will benefit the organization the most, i.e.,
consumers will be happier if extra amenities such as a calculator are provided.

A product's performance can be classified as low, average, high, or superior. It normally

performs at one of the aforementioned levels at any given moment. The level at which a
product performs is related to its performance.

According to many research, higher quality products create more income and a better return
on investment. A higher-quality product manufacturer may charge a higher or premium price
to clients while still attracting more customers. Price is seen to be a sign of quality,
especially in high-ticket products. Monroe says that a considerable number of research
corroborate an impression of a price-quality link, based on a review of the literature on price
perception. There's also a level of pricing snobbery. For example, one cosmetic product had
a bad market performance at a low price but performed well when relaunched at a higher
price. The inverse price-demand connection (the lower the price, the more people will buy it)
is a well-known phenomenon. You already know that if a product is of good quality, the
maker may charge a higher price and profit more. This is accomplished by cultivating a
group of loyal clients who purchase on a regular basis and persuade others to do so as well.
Because the cost of producing and delivering high-quality things is not proportionally higher
than the cost of producing and delivering low-quality items, high-quality items generate
more profit. Despite the beneficial association between quality and profit, a marketer should
not create high performance quality levels indefinitely. If the market turns sour, the
manufacturer's profit will suffer, thus it makes sense for a company to create performance
levels based on the needs of the target market as well as the performance levels maintained
by rivals.

A company can use one of three ways to manage performance quality as time passes. The
company might anticipate to gain greater market share and profit by improving the
performance quality on a regular basis. The second alternative is to maintain a certain degree
of quality at all times. The last alternative is to diminish quality over time to deal with
growing production costs or to raise profit margins, which is a cornerstone of classical
economics, although there appears to be abundant evidence of a strong price-desirability link
for some items.

Conformance: Manufacturers may make similar things that conform to the producer's
requirements based on consumer expectations. The degree to which all produced items are
similar and fulfil the declared goal criteria is known as conformance quality. A television
maker, for example, says that a specific type of television shows a clean image within 5
seconds after turning on. If every television set performs this, it is considered to have a high
level of conformity and be able to substantially please customers.

Customers are likely to be disappointed and acquire a bad impression about the organization
if the opposite occurs, i.e., if part of the mentioned model's sets do not display image within
5 seconds.

Durability: When we talk about durability, we're talking about a product's predicted lifespan.
Most product kinds, as well as most buyers, regard it as extremely significant. They
anticipate that the product will endure a long time when utilized in both typical and
extraordinary circumstances. Customers are willing to spend a higher price for a product that
is regarded to be durable. Buyers will not be willing to pay a premium price for a product
that is priced excessively high or regarded to be outmoded. Thus, while charging a premium
price for a long-lasting product, a marketer should consider the nature of the product, such as
whether or not it is subject to rapid technological development.

Reliability is a term that refers to a product's ability to perform as intended. Buyers will be
willing to spend a greater price if they believe the product will work effectively and without
problems. As a result of purchasers' positive perceptions of the product's dependability, the
seller gains a competitive advantage.

Customers consider a product to be reparable if it can be easily repaired in the event of poor
performance or operation. In this instance, purchasers will be willing to pay a greater price
due to the ease with which the goods may be fixed. A television, for example, is deemed
highly repairable if it is constructed of widely accessible, standard-quality parts that can be
easily changed.

Style is a manifestation of social and cultural influences. 'In any art, product, or effort, a
style is a particular way of production or presentation.' Automobiles (sedans, station
wagons), bathing suits (one-piece, bikini), furniture, and dance (waltz, "break") all have
styles. 2
If a product is outstandingly styled, the seller will have no trouble selling it at a premium
price since there are groups of clients who are continually looking for styles. As a
differentiating variable, style might be quite useful. When selecting to employ style as a
differentiator, marketers should bear in mind that simplicity of use should not be sacrificed.
If this is the case, the outcome may be different. Packaging is one of the most often
employed stylistic weapons in modern marketing. Attractive packaging easily attracts
consumers' attention, and many purchasers make purchasing decisions based on packaging
in a variety of items.

Design: Product distinction may also be based on good design. This is arguably more readily
understood in tangible things, as seen by the success of brands like Gucci clothes and
accessories, Braun consumer durables, and Olivetti office equipment. The arrangement of
things that make up a product is referred to as design. Good design supports the consumer in
three ways: it symbolizes the product's 'perceived worth,' it allows the firm to build a
'personality' for its goods, and it stimulates demand via prudent monthly design changes by
‘replacing' with more trendy new designs. It currently indicates that good designs boost a
product's marketability and increase profits for businesses.

Many businesses, on the other hand, have yet to invest in enhancing their product designs. In
many firms, style and design are often used interchangeably, and designers are given
minimal attention. On the other hand, there are firms and nations that are at the forefront of
design across the world. Management must be convinced of the value of design activities
before investing in them. The matching return should be taken into consideration. If the
return figure appears to be discouraging, the firm should reconsider. Braun, a German
company that makes a variety of small appliances, is considered as a fashion leader in its
area. Braun has proposed ten design principles that may assist a corporation in achieving
success in design efforts. The following are the principles:

The first principle is that good design is inventive.

Principle #2: A product's utility is enhanced by good design.

Principle #3: Good design is pleasing to the eye.

Principle #4: Good design demonstrates a product's logical structure; its shape follows its
purpose.

The fifth principle is that good design is inconspicuous.

Principle #6: Good design is straightforward.

Principle #7: Good design lasts.

Principle #8: Good design is consistent all the way down to the smallest elements.

Principle #9: Good design considers the environment.

The tenth principle is that good design is minimum design.

B. Product Distinguishing Factors

In every business, most brand leaders choose to differentiate their products. The fact that
cellulose tape was dubbed "Sellotape" and vacuum cleaners were dubbed "Hoovers" is a
testament to the inventors. They become the natural first-choice brands that all rivals are
measured against. Markets maturing imply increased rivalry for market share, as well as the
use of marketing research and experimentation to identify strategic methods to segment and
distinguish products in existing big volume markets. To be effective, the marketing
executive will frequently employ a product differentiation approach. Product differentiation
is one way for a marketer to appeal to selective purchasing motivations. If there is a strong
reason for differentiating the goods or services of one seller from those of another, a general
class of product is differentiated. As a result, items are differentiated if the consumer
perceives them to be distinct. Differentiating standardized items is quite tough for marketers.
There are examples of companies that have effectively differentiated their standardized
products.

There are several items that can be clearly distinguished. Automobiles and furniture are two
examples of things that have effectively separated themselves from one another. Significant
modifications in the design or performance of a product can be made if it is a unique object,
such as an automobile. When a product is generic, such as gasoline or sugar, customers are
less likely to notice distinctions between different producers' offers. As a result, each
producer should pursue a product differentiation strategy. A product's features, performance,
compliance, durability, dependability, reparability, style, and design may all be used to
differentiate it. Let's take a closer look at each one: Features: A product performs a basic
purpose. By adding some qualities to the product, the fundamental function may be
enhanced. Features are traits that go beyond the product's fundamental function. In order to
attract clients from different groups, marketers increasingly provide their products with
varied qualities by adding characteristics to them. A corporation can generate numerous
versions of the original product by adding new features to attract new customers. Additional
functions such as an alarm clock, calculator, memory book, and so on can be added by a
wrist watch maker.

As a result, the corporation wants to reach out to new client categories. By establishing
oneself as a pioneer in introducing new features to its products, a corporation may skim the
cream. However, in order to succeed, such a maneuver must be tactical. It's challenging, but
not impossible, to find and select new features to add. There are a variety of methods for
finding and choosing new features, including conducting interviews with recent consumers.
Questions on consumers' preferences for a specific product brand, the product's qualities,
difficulties customers have with the product, ideas for product enhancement, pricing
perception, reactions to other customers' suggestions, and so on may be included in such an
interview. As a result, a firm might get ideas for features that could be added to differentiate
its product from rivals'.

The corporation must now select which features it can and should add to the ones already in
place. By matching the cost of engagement with the perceived worth of consumers, a
decision may be made. As a result, each of the new features should be compared in order to
determine which one (s) should be implemented. To grasp the equation, consider the
following example.

Let's say a wristwatch maker is exploring three different enhancements. Alarm, for example,
would cost the corporation Tk. 50 every watch, as stated in table 5.2. Customers value an
alarm facility at Tk.150, according to consumer interviews and surveys. For every Tk 1
increase in the cost, the manufacturer might produce Tk.3 of increased consumer happiness.
Customers, for example, value calculators at Tk. 300. Calculator, for example, would cost
the corporation Tk. 75 every watch. On the other hand, adding a memory book to a watch
costs Tk. 125, and clients value that Tk. 250. Based on these three equations, it can be
determined that introducing calculating facilities will benefit the organization the most, i.e.,
consumers will be happier if extra amenities such as a calculator are provided.

A product's performance can be classified as low, average, high, or superior. It normally

performs at one of the aforementioned levels at any given moment. The level at which a
product performs is related to its performance.
According to many research, higher quality products create more income and a better return
on investment. A higher-quality product manufacturer may charge a higher or premium price
to clients while still attracting more customers. Price is seen to be a sign of quality,
especially in high-ticket products. Monroe says that a considerable number of research
corroborate an impression of a price-quality link, based on a review of the literature on price
perception. There's also a level of pricing snobbery. For example, one cosmetic product had
a bad market performance at a low price but performed well when relaunched at a higher
price. The inverse price-demand connection (the lower the price, the more people will buy it)
is a well-known phenomenon. You already know that if a product is of good quality, the
maker may charge a higher price and profit more. This is accomplished by cultivating a
group of loyal clients who purchase on a regular basis and persuade others to do so as well.
Because the cost of producing and delivering high-quality things is not proportionally higher
than the cost of producing and delivering low-quality items, high-quality items generate
more profit. Despite the beneficial association between quality and profit, a marketer should
not create high performance quality levels indefinitely. If the market turns sour, the
manufacturer's profit will suffer, thus it makes sense for a company to create performance
levels based on the needs of the target market as well as the performance levels maintained
by rivals.

A company can use one of three ways to manage performance quality as time passes. The
company might anticipate to gain greater market share and profit by improving the
performance quality on a regular basis. The second alternative is to maintain a certain degree
of quality at all times. The last alternative is to diminish quality over time to deal with
growing production costs or to raise profit margins, which is a cornerstone of classical
economics, although there appears to be abundant evidence of a strong price-desirability link
for some items.

Conformance: Manufacturers may make similar things that conform to the producer's
requirements based on consumer expectations. The degree to which all produced items are
similar and fulfil the declared goal criteria is known as conformance quality. A television
maker, for example, says that a specific type of television shows a clean image within 5
seconds after turning on. If every television set performs this, it is considered to have a high
level of conformity and be able to substantially please customers.
Customers are likely to be disappointed and acquire a bad impression about the organization
if the opposite occurs, i.e., if part of the mentioned model's sets do not display image within
5 seconds.

Durability: When we talk about durability, we're talking about a product's predicted lifespan.
Most product kinds, as well as most buyers, regard it as extremely significant. They
anticipate that the product will endure a long time when utilized in both typical and
extraordinary circumstances. Customers are willing to spend a higher price for a product that
is regarded to be durable. Buyers will not be willing to pay a premium price for a product
that is priced excessively high or regarded to be outmoded. Thus, while charging a premium
price for a long-lasting product, a marketer should consider the nature of the product, such as
whether or not it is subject to rapid technological development.

Reliability is a term that refers to a product's ability to perform as intended. Buyers will be
willing to spend a greater price if they believe the product will work effectively and without
problems. As a result of purchasers' positive perceptions of the product's dependability, the
seller gains a competitive advantage.

Customers consider a product to be reparable if it can be easily repaired in the event of poor
performance or operation. In this instance, purchasers will be willing to pay a greater price
due to the ease with which the goods may be fixed. A television, for example, is deemed
highly repairable if it is constructed of widely accessible, standard-quality parts that can be
easily changed.

Style is a manifestation of social and cultural influences. 'In any art, product, or effort, a
style is a particular way of production or presentation.' Automobiles (sedans, station
wagons), bathing suits (one-piece, bikini), furniture, and dance (waltz, "break") all have
styles. 2

If a product is outstandingly styled, the seller will have no trouble selling it at a premium
price since there are groups of clients who are continually looking for styles. As a
differentiating variable, style might be quite useful. When selecting to employ style as a
differentiator, marketers should bear in mind that simplicity of use should not be sacrificed.
If this is the case, the outcome may be different. Packaging is one of the most often
employed stylistic weapons in modern marketing. Attractive packaging easily attracts
consumers' attention, and many purchasers make purchasing decisions based on packaging
in a variety of items.
Design: Product distinction may also be based on good design. This is arguably more readily
understood in tangible things, as seen by the success of brands like Gucci clothes and
accessories, Braun consumer durables, and Olivetti office equipment. The arrangement of
things that make up a product is referred to as design. Good design supports the consumer in
three ways: it symbolizes the product's 'perceived worth,' it allows the firm to build a
'personality' for its goods, and it stimulates demand via prudent monthly design changes by
‘replacing' with more trendy new designs. It currently indicates that good designs boost a
product's marketability and increase profits for businesses.

Many businesses, on the other hand, have yet to invest in enhancing their product designs. In
many firms, style and design are often used interchangeably, and designers are given
minimal attention. On the other hand, there are firms and nations that are at the forefront of
design across the world. Management must be convinced of the value of design activities
before investing in them. The matching return should be taken into consideration. If the
return figure appears to be discouraging, the firm should reconsider. Braun, a German
company that makes a variety of small appliances, is considered as a fashion leader in its
area. Braun has proposed ten design principles that may assist a corporation in achieving
success in design efforts. The following are the principles:

The first principle is that good design is inventive.

Principle #2: A product's utility is enhanced by good design.

Principle #3: Good design is pleasing to the eye.

Principle #4: Good design demonstrates a product's logical structure; its shape follows its
purpose.

The fifth principle is that good design is inconspicuous.

Principle #6: Good design is straightforward.

Principle #7: Good design lasts.

Principle #8: Good design is consistent all the way down to the smallest elements.

Principle #9: Good design considers the environment.

The tenth principle is that good design is minimum design.

Image Differentiation (E).

In marketing strategy, the notion of image has grown increasingly essential. The image is a
customer's ultimate perception of a product or company based on both his physical and
psychological experiences. Corporate, product, brand, wholesaler, retailer, and the
customer's self-image are the six primary types of images, all of which are interdependent.
The corporate image is more important than any other sort of image, since a firm with a bad
image would struggle to acquire ideal market penetration for its product. The quality of the
public relations campaign and the choice of advertising medium have an impact on the
business image. The consumer must believe that the company's primary goal is to meet their
needs. The image of a product is determined by the image-building efforts of the several
firms that produce the same product line. A product may be categorized as being for young
or old people, as having a high or low social standing, or as feminine or masculine.
Associations assisting in the development of a product's image for an industry should make
an effort to communicate that the product is of high quality and dependable. The brand
image is a complement to the corporate and product imagery. Once a product line has gained
public acceptance, each manufacturer attempts to get its own brand acknowledged.
Packaging, labelling, brand name, identification, advertising, and a company's promotional
activities all have a role in brand adoption. The company's corporate image may assist or
damage brand acceptability, and hearsay information from neighbor’s or friends might
influence customer approval.

Even if the other pictures in the various phases of the distribution channel are acceptable, if
the wholesaler's image is poor, a sales barrier may exist. When a product is carried by a shop
with a bad reputation, the product's sales to customers will suffer. In marketing, the
customer's self-image is extremely crucial. The customer's self-image is the part he thinks
he's playing or how he thinks others see him. Basic physiological, societal, and
psychological components make up one's self-image. Acceptance of a brand will be badly
harmed regardless of how wonderful the corporate, product, and outlet images are if they do
not conform to the self-image of individuals in a market group. When selecting to employ
image as a differentiating factor, a firm must consider how it communicates with consumers,
the medium used to communicate, the symbols used, the nature and characteristics of
customers, as well as goods and other image components. A company's success in this area
might put it in a unique position.
4.2.1 Developing Positioning strategy

Why Do Businesses Use a Positioning Strategy?

You were given differentiation concepts in the last lesson. As you can see, a corporation
might strive to differentiate its product in a variety of ways. It doesn't matter how hard a firm
tries to differentiate its product; if people don't think it's distinct, it won't be. Adopting a
product differentiation policy comes at a cost to the corporation, which it aims to recoup
through greater sales. However, until buyers respond positively, there is no assurance that
sales will increase. Customers search for anything in a product that the vendor claims are
unique in order to behave positively. As a result, a firm should be cautious when choosing
strategies to differentiate itself and include the following characteristics in its offer:
Importance: Customers will consider a product important if it can provide a highly valued
advantage to the majority of them.

Distinctive: Buyers will see a product as distinctive if it provides something that other
brands do not.

Superior: Customers regard a difference to be superior if it appears to be better than

alternative means of receiving the same advantage. Marketers should create a distinction that
is communicable. Preemptive: If a difference is difficult for competitors to replicate, it is
said to have the preemptive characteristic.

Affordable: Differentiation, as you may know, comes at a cost to the firm, which the
company recognizes from its consumers. As a result, it should examine whether customers
are able to suffer the same. Such distinction is referred to as affordable if it is possible.

Profitable: A corporation must spend a lot of money to figure out how to differentiate itself.
A corporation does so in the hopes of increasing sales and generating a significant profit.
Such a differential cannot be deemed lucrative if sales do not grow correspondingly to
deserve business profit. which may be readily intimidated to market, and market, and
market, and market, and market, and market, and market, and market

According to reports, a large proportion of businesses were unable to achieve the

aforementioned requirements in their distinction. Consumers may not have recognized the
product as unique, or the corporation may have failed to establish a place for its product in
the customers' own frame of reference. As a result, the businesses failed and suffered losses.
Companies should distinguish their products based on distinct features or characteristics
capable of meeting the demands of specialized market segments in order to fulfil the needs
of specific market segments. Marketers employ positioning to accomplish this goal. In
comparison to rival brands, position is a phrase that indicates a product's objective or
subjective attributes. Positioning might be an attempt to set a marketing proposition apart
from the competition. It is possible to utilize a positioning strategy to: should be able to
visualize that readily.

The Positioning Strategy and the Positioning Concept (product) The process through which a
corporation builds a picture of its product in the minds of consumers in comparison to the
image of rivals' product offerings is known as positioning. 3 As a result, positioning refers to
the combination of product distinctiveness and market segmentation (product positioning).
The phrase "product positioning" refers to the decisions and efforts aimed at establishing and
maintaining a company's desired product notion in the minds of customers. It is therefore a
method for creating a product's place in the consumer's mind and distinguishing it from
others in the same category. To distinguish it from ordinary paracetamol, Napa became
known as "the extra-strength pain reliever." When marketers launch a product, they try to
position it such that it appears to have the attributes that the target market is looking for. This
projected picture is really important.

The features of the product in relation to their notion of competing brands. For example,
'Tibet' is marketed as a fluoride toothpaste that prevents tooth decay, while 'White Plus’s is
marketed as a whitening toothpaste that improves a user's sex appeal. When market
segmentation is employed, product positioning is a logical evolution. Segmentation allows a
company to target a certain segment of the market with a specific brand. Effective product
positioning aids in serving a certain market segment by instilling in the minds of buyers in
that market segment an idea of the product's features. Because distribution, pricing,
promotion, and personal selling all contribute toward placing the product in the eyes of the
customers, the product usually becomes the main focus of positioning strategy. As a result,
the product positioning approach of designation is frequently adopted. Product positioning is
the outcome of more than simply the product, because it may be created through a mix of
marketing Programme components. The final result is a combination of the entire marketing
campaign.
The creation of a marketing campaign that includes the following decisions is known as a
positioning strategy. Offering a product or service How will distribution be carried out?
Pricing strategy selection, as well as Choosing a promotional strategy These choices are a
collection of strategies. As a result, the goal is to create an integrated Programme in which
each of the aforementioned components plays its correct function in positioning the
company in the product markets that management wishes to service. Due to customers'
opinions of the product or brand, the outcome frequently separates a firm, product, or brand
from its rivals. The product, the method of distribution, the price, advertising, and personal
selling all contribute to the formation of these views, as do rivals' marketing programmers
and other uncontrolled circumstances. The demands of the individuals or organizations who
make up the target market are met when a positioning strategy is chosen correctly. A
successful positioning strategy is one that will provide customer satisfaction to the firm's
target market while simultaneously meeting corporate and marketing goals.

A company can position a product to compete directly with another brand, as Coca-Cola did
with Pepsi, or to avoid competition, as RC Lemon did with other soft drink companies. If the
product's performance attributes are at least equivalent to competing brands and the product
is less expensive, head-to-head competition may be a marketer's positioning goal. Even
though the price is greater, head-to-head placement may be suitable if the product's
performance attributes are superior. When the product's performance attributes are not
considerably different from rival brands, however, positioning to avoid competition may be
the best option. Also, when a brand has distinct attributes that are crucial to purchasers, such
as RC Lemon, positioning a brand to prevent competition may be beneficial. RC Lemon's
creator is attempting to establish his product as a stand-alone category in the minds of
consumers. A product's features and brand image, if well developed, will offer it the
distinguishing attraction required. All components of the product component of the
marketing mix, such as style, form, structure, quality of work, and color, help to create the
image and appeal. Buyers are more inclined to acquire a product if the benefits are plainly
identifiable. When some desirable features aren't available, there's potential for a new
product or a repositioning of an existing one. Types of Distinctions a Business Can Promote
A corporation must decide on the quantity and type (s) of distinctions it will promote in
order to be successful. Let us now consider how a firm may make a decision on this matter.
The number of variations a corporation should highlight is a point of contention among
marketing gurus and authors. Some say that finding one acceptable trait and promoting it
aggressively, stressing the company's strength in it, is always a good idea. The notion of the
Unique Selling Proposition, or USP, was born out of the necessity to invest in distinguishing
features of a product. This is a feature or set of characteristics in a product that provide
unique benefits not present in similar products. Let's use the example of Christmas
marketing organization’s to further comprehend the notion. There are several vacation firms
that specialize in organizing package vacations for the youthful (18-30) travel market. While
the product given is comparable in many aspects, organization’s concentrating on this
market area look for methods to set themselves apart. For example, business 'A' would
emphasize that their hotels are utilized exclusively by their clients, whereas company 'B'
might emphasis the extra adventure, and company 'C' might promote the overt sexual appeal
of their vacations. USP focuses on a single attribute and attempting to be number one in that
attribute. There are several traits from which a corporation may choose one and attempt to
position itself as the number one on that attribute, because the number one always attracts
more attention than the rest.
'Quality,"service,'price,'value,'reliability,'safety,'speed,'customization,'modernity,' and so on
are examples of qualities.

In some cases, firms may need to employ a double-benefit strategy. When more than one
company claims to be number one in the same dimension or attribute, this occurs.
Companies that attempt double benefit positioning are typically looking for a unique niche
inside their target market. Companies may choose to pursue a triple-benefit positioning
approach on various occasions. Some toothpaste makers have been shown to use this method
by stating that their products can perform three functions. They strive to persuade the market
of the purported advantages by developing toothpaste that squeeze out of the tube in three
color stripes.

4.4 BRAND POSITIONING

Introduction:

Brands have existed for a long time. They existed in the shadows. After the product was
designed, priced, and packed, the managers considered branding. For marketers who
believed that the product was more important than branding, it was an afterthought. The
concrete components of the situation drew additional attention. Passively assigning names to
pre-manufactured things was referred to as branding. Brands, on the other hand, have
awoken in the last two decades. They're the focal points of the entire marketing process.
Brands are at the top of the manager's priority list. Brands aren't widely recognized as drivers
of a company's financial performance. There were no drooling managers. These brands are
the result of well-thought-out branding strategy. Notes

To do this, managers must approach branding with caution and determination. However, if

the notion of brand is unclear, the branding process cannot be properly addressed. It is
necessary to address the key question of what constitutes a brand and what does not. They're
no longer only marketing cynosures; they're also a part of financial strategy and
planning. valuations. Branding becomes even more vital when brands are so
significant. Marketers lust for the world's top brands, which dominate the roost in global
markets. They still don't have strong brands. Marlboro, Sony, Kodak, Coca-Cola, and BMW
are among the brands that have left the market.

4.4.1 Concept of brand

The history of brand evolution is fascinating. Shopkeepers in ancient Roman and Greek
civilization posted images depicting the things they sold over their stores. There was a lot of
illiteracy back then, therefore the graphic depiction was quite helpful to the consumers. Each
shopkeeper then began to create emblems to reflect his area of expertise. This resulted in the
creation of brand logos. Logos are a type of shorthand for a brand's competence. Even now,
the tendency is continuing. Craftsmen used to stamp their marks on things to demonstrate the
level of expertise that went into their creation. Over the years, there has been branding based
on the reputations of craftspeople. As a result, providers began to set themselves apart.
Branding served as an assurance of the product's origin. Later, it was employed as a legal
defense against copying and imitating. Trademarks can now be registered for works,
symbols, and packaging design. The mark put on livestock by red hot iron as proof of
ownership was related with branding, and this must have affected the lexical definition of a
brand as an indelible mark as proof of ownership, as a symbol of quality, or for any other
reason in the Oxford English Dictionary. Brands were used by ranchers in the ancient west
to identify their cattle. Because fence had not yet been created, this was their sole option for
identifying their precious property. Brands became distinguishing devices as a result, and
they still are today. They distinguish between the products of a single seller or group and
those of rivals. Brands may be any combination of a name, word, sign, symbol, or design. In
retail grocery stores, traditional brand management arose. The relationship between
manufacturers and retailers changed dramatically after the Industrial Revolution.
Wholesalers dominated the market at the time. Manufacturers sold wholesalers unbranded
items and had minimal touch with retailers. Technological advancements, on the other hand,
enabled manufacturers to mass create things in advance of demand. They questioned the
wholesalers' role in their business. They sought to safeguard their investment by branding
and patenting their items. They attempted to avoid distributors by directly marketing these
products to customers. The focus of advertising at the time was on raising brand recognition,
emphasizing its dependability, and ensuring that branded items were of constant quality.
Manufacturers began to hire their own salespeople to engage with stores directly. By the
second part of the nineteenth century, everything had transpired. Because of the branding
process, authority transferred from wholesalers to manufacturers. Manufacturers worked
hard to develop brand recognition and distinguish their products from those of their
competitors. They also worked hard to maintain a high level of quality. Differentiation, legal
protection, and functional communication become three dimensions of brands. Consumers
yearned for things that were scarce after World War II because resources had been allocated
to the war effort. People were starting their lives again and want security. An ideal goal was
to provide for the family. It was a positive sign for the makers. During this time, many of
today's most well-known companies were born. Brand management has become a respected
topic.

Characteristics of Brand

There are four levels to consider when thinking about a brand: Generic: This is the
commodity level, where fundamental necessities like transportation are met. It's really
simple to copy a generic product. To attain the desired level, a brand continues to add values.
Expected: A generic is altered to meet certain minimal purchasing criteria, such as functional
performance, cost, and availability. Brand is further refined by including non-functional
values alongside the functional ones. We could target advertising at the social prestige that a
brand owner is likely to enjoy. Potential: We grow more critical as brands progress.
Creativity is crucial in helping the brand reach its full potential. There is a risk that the brand
may revert to its enhanced or anticipated level if no innovative effort is made.

Brand management
The application of marketing techniques to a specific product, product line, or brand is known
as brand management. It aims to improve the customer's perception of the product's value,
consequently increasing brand franchise and brand equity. A brand, according to marketers,
is an implied assurance that the level of quality that customers have grown to anticipate from
a brand will be maintained with subsequent purchases of the same goods. By making a
comparison with rival items more favorable, this may enhance sales. It may also allow the
maker to demand a higher price for the item. The amount of profit a brand earns for the
maker determines its value. This can be the consequence of a combination of higher sales and
higher prices, lower COGS (cost of goods sold), and/or lower or more efficient marketing
spend. All of these improvements may increase a brand's profitability, hence "Brand
Managers" are generally held accountable for the P&L profitability of a brand, as opposed to
marketing staff manager jobs, which are given funds from above to oversee and execute. In
this way, Brand Management is frequently considered as a larger and more strategic position
inside firms than Marketing alone.

4.4.2 Product Branding challenges

Brand management may be more complex than ever before, despite the fact that brands are as
vital to customers as they have always been. The following are some of the problems that
brand managers face:
1. Astute Clients: Consumers and businesses are becoming more familiar with marketing and
have a better understanding of how it works. Because of the well-developed media industry,
corporations' marketing actions and intentions have received more attention. Many people
feel that persuading customers with traditional communications is more difficult now than it
was in the past. Others feel that customers' expectations of products, services, and brands
have shifted. Kevin Roberts of Saatchi and Saatchi, for example, believes that organizations
must go beyond brands to establish "trust marks"—a name or symbol that emotionally
connects a company with its customers' goals and ambitions.
2. Brand Proliferation: The proliferation of new brands and goods, as a result of the growth in
line and brand expansions, is another significant development in the branding environment.
As a result, a single brand name may now be associated with a variety of items with varied
degrees of resemblance. Crest Mint, Crest for Kids, Crest Baking Soda, and Crest Multi Care
Advanced Cleaning have all been added to Procter & Gamble's original Crest toothpaste
portfolio.
3. Media Fragmentation: The fragmentation of conventional advertising media, as well as the
introduction of interactive and nontraditional media, promotion, and other communication
alternatives, is a significant change in the marketing environment. Advertisers are
increasingly opting for 15-second advertisements rather than the customary 30- or 60-second
spots, resulting in more congested commercial breaks on network television. Marketers are
increasingly investing in nontraditional and developing means of communication, such as
interactive and electronic media, sports and event sponsorship, in-store advertising, and small
billboards in transit vehicles and other areas.
4. Intensified Competition: Factors on both the demand and supply sides have led to the rise
in competitive intensity. On the demand side, many products and services have reached
maturity, if not decline, in terms of consumption. As a result, brand sales growth can only
come at the expense of competitors by stealing part of their market share.
5. Increasing Costs: As the cost of launching a new product rises, so does the cost of
launching a new product. It will be tough to replicate the degree of investment and support
that brand have received in recent years.
6. Greater Accountability: Stock analysts look for regular and solid earnings reports as a sign
of a company's long-term financial health. As a result, marketing executives may find
themselves in a situation where they must make decisions with immediate rewards but long-
term consequences. Furthermore, many of these same managers have had quick job turnover
and promotions in the past, and they may not expect to stay in their current roles for long.
These various organizational pressures may favor fast fixes, which may have negative long-
term repercussions.

Branding is the process of managing your trademark portfolio so that the value of the
experiences connected with it is maximized for the benefit of your key stakeholders, both
existing and prospective:
1. Customers 2. Employees
3. Owners of stock/shares
4. Providers
5. The role of intermediaries
7. Local communities 6. Opinion leaders
8. Licensees and purchasers
Experts disagree over which stakeholders should be the primary focus of the branding
process; however, this is most likely the wrong issue because their experiences are all
interconnected: Employees: Customers, suppliers, local communities, and opinion leaders
will love your brands more if your staff value them and understand how to create them.
Potential workers are more likely to desire to work for you if your brands are appealing to
them.
Customers: The more your customers respect your brand, the more likely they are to buy and
suggest your products and services to others. They'll also pay a premium for them, making
your employees' life simpler. As a result, the value of your brands will rise among potential
buyers and licensees. Strong brands, according to research, are more immune to reputation
crises.
Shareholders: Strong brands increase the asset worth of your firm (intellectual property
accounts for 90% of the asset value of certain big corporations) and reassure them that your
company will be lucrative in the future. They also enable you to pay out competitive
dividends to your existing stockholders.
Suppliers: Suppliers like to be connected with well-known brands since it enhances their own
reputation among existing and future clients. As a result, you're more likely to obtain better
servicing at a cheaper total cost of ownership. Retailers, distributors, and wholesalers love
strong brands because they help them increase their profit margins. They are more likely to
give you more "air time" and shelf space, so increasing the perceived value of your brands
among existing and potential consumers. Opinion Leaders: Strong brands are more respected
by the media, politicians, and non-governmental organizations. Local Societies: Supportive
local governments may make your life simpler in a variety of ways, as well as provide you
with better bargains if you have well-known brands. Your local communities support your
workforce and may be quite disruptive if they believe you are causing environmental damage.
Prospective purchasers and licensees inquire, "How much more profit can I obtain for my
products and services provided under this brand than under any other brand I may build?"
Brands with a lot of clout may be quite valuable.

Branding challenges:

According to the branding scenario, organizations and enterprises confront a number of

issues, including:
(a) Reactive Approach to Brand Development: Brand development or re-branding is
frequently triggered by an event. "We're being featured in a big newspaper and want to post
an ad, but we don't know how to position ourselves," or "We're being featured in a large
publication and want to place an ad, but we don't know how to position ourselves," are
examples of signaling remarks. Your organization will merely "respond" to possibilities for
exposure if you don't have a plan or processes in place.
(b) Lack of Accountability in Branding Initiatives (Return on Branding Investment, ROBI):
There are no established measurements in place to measure the performance of branding
activities including advertising, direct marketing, public relations, and web activity. The
efficacy of branding campaigns is often judged after the fact, and the foundation for
continuing a project is often gut feeling. You can't determine whether a result was good,
awful, or ordinary without measurements. You just know that you invested "X," that the sales
result was "Y," and that you are satisfied in the short term.
(c) Inability to Complete Branding Initiatives: Many businesses make a succession of false
marketing beginnings, or start strong but lose focus, resulting in statements like "We're
working on a new corporate brochure..." or "We have a website in construction..." It's
possible that the top executive is overly involved in the process, or that the project has been
assigned to an untrained employee. At Delia Associates, I had a number of fantastic interns,
some of whom I recruited and others who have gone on to successful marketing careers
elsewhere. These employees, no matter how intelligent they were, were not competent to
design and deliver a company's internet brand on their own, and it would have been foolish to
expect them to do so.
"Who are we Today?" (d) Syndrome: If your company's position, key values, image, and core
focus haven't been established, each branding endeavor is a "re-invention of the wheel" that
necessitates a rethinking of your company's position, key values, image, and core focus. What
should have been a straightforward launch of a new product becomes a discussion of the
company's past, present, and future, with everyone questioning, "Who do we REALLY want
to be when we grow up?"
(e) Our business was "stolen" by the competition: We routinely receive inquiries from
businesses who have lost a significant portion of their business to a direct or emerging
competition. The senior executive will berate the competition for stealing the customer
despite the fact that the competitor is inferior. What firms fail to comprehend in these
instances is that branding is more about perception than fact. It's true, pure and simple, if a
consumer feels a rival is better than you.
"We're in the Commodity Business," says f. Perceived value is being driven out of the firm as
a result of rivals utilizing price-cutting strategies to effectively buy market share. As a
consequence, you may be obliged to lower prices or provide value just to keep your current
customers. Branding, on the other hand, takes a back place. In reality, every organization is
noteworthy in some sense simply by virtue of its existence. From genuine commodity
providers to industry innovators, every industrial area has a value curve of enterprises. Who
do you believe makes the most money?
(g) "Branding Doesn't Work in Our Industry" is frequently used in conjunction with
"Branding is a Necessary Evil." These are frequently the words of victims of poor marketing
execution or terrible marketing counsel. The speakers have been stung before and will not be
bitten again so readily. The reality is that branding works, as proven by the success of
businesses that have attained brand recognition. (h) "Everyone Knows Who We Are.": Any
firm that has been in existence for 10 years or longer, especially if it serves a well-defined
sector, has a name Notes recognition. "What do others THINK about you?" is a better
question. Your clients may recognize you for the services you provide, but they may be
unaware of your complete range of talents or how to make qualified references on your
behalf. Customers may forget to call you in a moment of need, or your customer contacts
may vanish.
I Unrealistic Expectations: "We sent out a mailer and received no response." Accountability
and ROBI are at the root of this prevalent concern. What did you anticipate with only one
mailing? The most common cause of branding failures is a lack of persistence on the part of
businesses. They quit too soon and blame it on failure. To get on the radar of a qualified
prospect, much alone turn that prospect into a client, it takes an average of seven brand
impressions.
(j) "Nobody Knows Us": Many businesses place a higher priority on selling than branding.
An organization's growth will be aided by a strong sales staff, but it will not be able to
compensate for the importance of branding. If you're a $10 million firm with around 100
critical clients, your brand matters a lot to them. The rest of the world, on the other hand,
could care less until you give them a cause to.
(k) "We don't have the budget": Almost every firm we've spoken with is investing in its
brand. Companies may not measure it or think of it as a brand investment, but they are still
spending. Golf excursions, client dinners, business presents, infrequent advertising,
tradeshow appearances, presentations, caps, t-shirts, fresh brochures, and website updates are
all examples of brand spending.

4.4.3 Strategic Brand management and positioning process

What is the definition of strategic brand management?
The creation and implementation of marketing programmers and actions to establish,
measure, and communicate brand equity are all part of strategic brand management. The
practice of strategic brand management is critical for building and maintaining brand equity.
Brand management entails devising a plan that successfully maintains or enhances brand
recognition, establishes brand associations, and emphasizes brand quality and usage. The
brand strategy entails ongoing investments in R&D, public relations, and customer service.
Measurement and control of brand impacts are equally key tasks. The strategic brand
management process begins with a clear knowledge of what the brand will represent and how
it will be positioned in comparison to competitors. The goal is to discover and build brand
positioning that reflects the advantages that a company may achieve. This includes defining
the essence of the brand as a set of imagined associations (attributes and benefits) that are
distinguishing features of the brand, as well as deciding how to present it. It's all about
defining the brand's "heart" and "soul." Only a few businesses use a codified approach to
assist them discover a solution to reduce their efforts and improve the efficiency of their
brand management. Strategic brand management that is based on brand portfolio planning is
more successful. In partner agreements, a company's brand portfolio generally includes of
brands from multiple other companies. Some writers have created a "molecule of brand"
paradigm, in which each brand is represented by an atom, with the size of the atom indicating
the brand's role. The largest atom represents the leading brand, the middle atom represents
the strategic brand, and the smallest atom represents the supporting brand. The brand
hierarchy is the beginning point in strategic analysis for decision-making needs. A brand
hierarchy is founded on the assumption that a product may be branded in a variety of ways
depending on how many new and old brand elements are utilized and how they are integrated
for each product. Because specific brand components are utilized to create several brands, the
hierarchy may be built to show how items are nested with one another based on their shared
brand elements. Keller has identified four possible hierarchy levels. A corporate (or firm)
brand is at the top of the hierarchy. The next step down is a family brand, which is described
as a brand that is utilized in more than one product category but is not necessarily the
company's name. An individual brand is the third level. It's a brand that's been confined to a
single product category, however it can be used to a variety of distinct product kinds within
that category. The highest level is referred to as a modifier, which is used to indicate a certain
item, model type, or version of product configuration.

Process of brand management strategy

The creation and implementation of marketing programmers and activities to develop,
measure, and maintain brand equity is part of strategic brand management. The four primary
phases of the strategic brand management process are as follows:
1. Identifying and developing brand positioning and values
2. Creating and executing brand marketing campaigns
3. Analyzing and analyzing the performance of a brand
4. Maintaining and growing brand equity.
The strategic brand management process begins with a clear knowledge of what the brand
will stand for and how it will be positioned in relation to rivals. Brand positioning, according
to Kotler, is the "process of creating a company's offer and image such that it occupies a
distinct and valued place in the mind of the target client." The objective is to position the
brand in the thoughts of customers in such a way that the company's potential advantages are
maximized. Competitive brand positioning is all about persuading customers of a brand's
superiority over competitors. It entails persuading customers of a brand's benefits over
competitors while also assuaging fears about any potential downsides. Defining the proper
core brand principles and brand slogan is a common part of positioning. The collection of
abstract connections (attributes and advantages) that describe a brand are known as core
brand values. It is frequently beneficial to develop a brand mantra, also known as a brand
expression of the most significant components of a brand and its core brand values, to offer
more focus on what a brand represents. It's the most significant component of the brand to the
consumer and the firm, and it's referred to as "brand DNA." Core brand principles and a
brand slogan are essentially expressions of the brand's heart and soul. A brand audit is
frequently helpful in determining or analyzing a brand's positioning. A brand audit is a
thorough evaluation of a brand that includes actions to assess the brand's health, find its
sources of equity, and recommend methods to increase and leverage that equity. A brand
audit necessitates an awareness of brand equity sources from both the firm's and the
consumer's perspectives. The notion of competitive brand positioning is laid forth here, along
with specific instructions on how to create such strategies. The actual marketing campaign to
build, strengthen, or sustain brand connections may be put in place once the brand positioning
plan has been decided.

The branding procedure is being planned and implemented.

Building brand equity necessitates the creation of a brand that customers are familiar with
and with which they have strong, positive, and distinct brand connections. This knowledge-
building process will be influenced by three elements in general: 1. The first selection of the
brand features or identifiers that will make up the brand. 2. The marketing activities and
marketing support Programme, as well as how the brand is incorporated into them. 3. Other
connotations were conveyed to the brand in an indirect manner by attaching it to another
corporation (e.g., the company, country of origin, channel of distribution, or another brand).

4.4.4 Identifying and establishing Brand Positioning

The term ‘position’ in a physical sense is used to refer to or specify the place or location of an
object. For instance, in a cinema theatre the tickets carry a number like A -15 to signify the
seat which is located on the first row and fifteenth column. People often enquire about the
location of toiletries section in a departmental store, and the staff guides like. ‘Please go
straight about 200 ft and then turn left and go about 50 ft to find the grocery section’. In
cricket, the battling lineup also signifies the position that various players have in the batting
sequence. In a football match, both the opposing teams place their players on different
positions on the X and Y dimension of the playground. In a football game, ‘forward’ and
‘goalkeeper’ refer to different positions. In a classroom situation, the front bench position is
usually preferred. But some students prefer sitting in the last few rows of seats. In a cinema
hall, quite unlike a classroom, the back rows are preferred. Some people prefer the corner
positions in a cinema theatre. In the absolute sense, there is no such thing as a ‘good’ position
or a ‘poor’ position. The validity of a position depends upon the goal or objective. For the
students who are seriously interested in studies, the front row gives them good proximity to
the teacher, while for the students who want to avoid studying, the back benches are good.
The famous “5P’s” of marketing folklore (product, place, price, promotion & packaging)
were fine tools for implementing packaged goods brand positioning - and the basic formula
still has its role in FMCG assignments. But today we are entering the era of customer brands
where ‘company’ and ‘brand’ are one and the same. In this scenario the company culture &
values become a crucial factor in the solution: finding and harnessing what’s there already or
setting out to create values and practices which support and manifest the positioning.

Running a brand is like conducting an orchestra. Positioning is the heart of competitive

strategy. The messages transmitted by everything from the advertising to phone calls with
your customer care department all need to be kept in harmony and on-brief. Without a clear,
single-minded definition of what the brand is about the messages rapidly become discordant
and confusing. The positioning statement is therefore a focusing device which helps brand
management to keep everything sharp and relevant. Identifying where a specific brand is
placed within the marketplace and its relationship to competitive brands, brand positioning is
determined by defining the brand’s benefits to the consumer, opportunities for which the
brand is best suited, the brand’s target audience, and who its main competitors are, or us to
achieve the benefits of brand positioning, it is necessary to research in-depth the market
position (or lack thereof) of the brand. Brand maps and forms are created to profile the brand
positioning, comparing the results with competitive brands. In realizing the benefits of brand
positioning, it is important to understand that not all brands are competitors. A consumer may
be presented with six brands of one product and only consider three out of the six as a
purchasing choice. The consumer may have encountered a negative experience with a
specific brand and may never consider purchasing it again, or there may be a brand that
simply does not stand out to the consumer and it is passed up.

Position or perish
Have you ever considered what distinguishes Kellogg’s from Maggi? The distinction is in the
placement. Let's have a look at how this wonderful notion contributes to the success or failure
of every brand!!!

Al Rise and Jack Trout first proposed the notion of placement in 1969, and it was further
developed in 1972. To grasp the notion of placement, think of the human mind as a
perceptual map with various brands holding various locations inside it. The theoretical
foundation for brand positioning is the idea of perceptual space. What this leads to is the
consumer's perception, which determines a brand's positioning. It's crucial to remember that a
marketer's job is to locate a position for their brand in the consumer's perception space and
position it at the most profitable location. As a result, positioning is not what you do to the
product, but what you do to the prospect's head. It's a new way of communicating that's
revolutionized the way people think about advertising. It might be of a product, a service, a
business, or even oneself. A consumer's perspective is influenced by their values, beliefs,
needs, experiences, and surroundings. According to Subroto Sengupta, "the core thought
behind brand positioning is the idea that each brand (if it is noticed at all) occupies a specific
point or space in the individual's mind, a point that is determined by that consumer's
perception of the brand in question and its relationship to other brands." As a result, the
spatial distance between the spots on which brands are positioned in the perceptual map
represents the subject's sense of product or brand similarity or dissimilarity. The primary
approach to placement is to influence what's already up there in the mind, to rewire the
connections that already exist, rather than to create something new and distinct. Less is more
in communication, as it is in architecture. Positioning is the only solution to the challenges of
an over-communicated society. Positioning is a systematic method for locating a mental
window. Being first in a certain category is a simple method to enter into a person's
consciousness. If you aren't the first, you have an issue with your positioning.

4.4.5 Idea Behind Brand positioning

Regardless, the optimal benefit to claim has three characteristics: (1) It is incredibly essential
to the target customer, (2) your company is uniquely qualified to supply it, and (3) rivals are
failing to appropriately address it. There are four fundamental components to brand
positioning, according to us: 1. The primary audience to which the brand is intended to
appeal is the target customer. 3. Brand promise: A promise of significant differentiating
benefits 2. Brand essence: The "heart and soul" of the brand 4. Adjectives that characterize a
brand's personality as if it were a person. These elements work together to define the brand.
They're written in a straightforward manner that directs not just marketing communications
and brand identity standards and processes, but also all of the organization's actions. Some
argue that the greatest a business brand can strive for is to have an industry leadership
position. "[Company] is the quality and innovation leader in the [industry.]" would be the
brand promise. That, in my opinion, is a pretty poor stance. In the opinion of customers, the
most powerful corporate brands possess something extra. Disney, for example, has the rights
to "fun family entertainment," while Nike owns the rights to "real athletic excellence."
"Unconditional primordial warmth" is owned by Nicor, whereas "caring shared" is owned by
Hallmark. The following brand promise is used by Brand Forward: "Only [brand] offers
[benefit] to [target consumer]." This is a basic form with a lot of economy. The following is
an example of a strong brand position: 1. Believable, intelligible, one-of-a-kind, and
captivating 2. Achievable aspiration 3. Admirable and charming 4. Difficult to imitate 5.
Enduring and timeless 6. Adaptable It's difficult to position a brand. It is both an art and a
science, and it is unlikely that operationally focused employees in your business would
understand or appreciate it. It is, nonetheless, vital to the long-term success of your company.
Carefully consider how you want to position your brand.
The final step in developing a marketing strategy is positioning. The identification of market
segmentation and, later, the selection of a marketing activity target are the first steps in
developing a marketing strategy. Marketing resembles a military war in many ways. The term
"strategic" has traditionally been used to military operations. A strategy is a blueprint or plan
for achieving a goal by outmaneuvering the opposition. In the following ways, marketing and
military engagements are similar: 1. The goal of most battles is to gain physical land, air
space, or sea routes. Battles are intrinsically related to geography. The acquisition of a
geographic unit is the goal of fights. The goal of marketing is to earn clients or market share,
not to acquire a geographical unit. In this usage, the term "market" does not refer to a
physical location. The end consumers or retailers are frequently the targets of marketing
fights.
3. Troops and a range of munitions are used in battles. To combat the adversary, soldiers,
aircraft, tanks, ships, missiles, and weapons are deployed. The warriors in marketing are
usually salespeople, while other value-creating instruments like as advertising, sales
promotions, demonstrations, product, after-sales care, pricing, reputation, and so on are
utilised to wage marketing warfare. When it comes to marketing wars, brands are the
greatest warriors. 3. The fights are conducted against an adversary over a mutually
beneficial purpose. In most conflicts, the opponents are widely known. Marketing wars
are conducted between industry competitors who are vying for the same clients or
markets. Direct rivals are easily detected in marketing, while indirect competitors are
sometimes overlooked. The borders between competitiveness might be a little hazy at
times. 4. Military engagements are often fought over a specific geographic region. As a
result, most fights are named for the location where they took place. A marketing fight is
conducted in the minds of prospects, not in stores or marketplaces. In the minds of
prospects, marketing fights rage for their buying choice. The marketing war is won when
a brand is sold in the mind of the client. 5. In a military combat, force supremacy or might
frequently determines victory. This is especially true in direct and head-on combat. As a
result, countries spend vast quantities of money to strengthen their military. Superior
value delivery dictates winning in the marketing setting. Customers frequently vote for
brands that provide better value than competitors. Military thought in the past was based
on might-building or attaining absolute dominance. It means keeping a continual eye on
the competition and attempting to out-compete them on scale. An opponent with absolute
numerical and ordnance advantage, on the other hand, can be beaten with a lesser force
through superior tactics. However, for a long time in marketing, the traditional military
‘superior firepower always prevails' school of thought governed thinking. The excellence
of rivals' answers, as well as their desire to establish differentiation and advantage,
affected and directed marketers.

4.4.6 Brand Positioning Guidelines

As an organization manager, it is your responsibility to collaborate with your team to develop
a positioning or branding statement that will have the most influence on your target audience.
This statement will inform the audience about who you are and what you believe in. As a
result, you should be aware with some of the basic branding rules provided below. Develop
and drive home your brand positioning using these ideas and concepts. What am I getting out
of it? The overwhelming worry of your audience is known as WIFM (pronounced whiff-me).
They must be able to recognize, appreciate, and accept the benefits that your position
provides. If you promote your Doppler radar, the audience must understand how it will assist
them in saving their property and lives. Tell your viewers that you did it so they could have a
head start on their day each day if you have the earliest broadcast in the market. Allow your
news anchors to tell your audience how much they enjoy living in your market if they are not
from there. Is it straightforward? Make sure the positioning statement you choose is
straightforward. Wordsmithing on a shoestring budget is the way to go. With minimal effort,
say everything. It must be simple to comprehend and remember. It must also be possible to
weave the message into everything you and your station do. Unless you consider it
thoroughly, this synergistic necessity will either bless you or haunt you. Is it your intended
audience? Your target audience must value your positioning dimension. If your station's
target demographic is the soccer mom, make sure your branding is mirrored in your visuals,
music, and on-air philosophy. Here's where some time and money invested researching your
target audience's demands and requirements can pay off handsomely. Do not skimp on
research in any way. You end up like a well-known apparel company that rejected studies
advising it to stick to its core product. It expanded into other lines against the advice of
experts (and customers) and nearly went bankrupt. Is there a concrete and intangible aspect to
it? It's critical to make sure you've included some intangible positioning when choosing your
positioning statement. Your rivals will find it much more difficult to rip off and steal your
thunder due to the emotional or even illogical sensation your statement evokes in the minds
of the audience. However, don't overlook the reasonable and useful placement. Being known
as "the station where people weep a lot" is full of emotion and surely not reasonable, but it
serves no purpose in the branding line. Are you making too many promises? Can you
maintain your position in the long run? In the first decade of the twenty-first century, NBC
could legitimately claim to be "the Olympic network." However, only a few stations can
afford such a long-term commitment. Your audience will quickly figure out whether you're
promising the moon and then delivering mud balls. Make certain your positioning line will
last longer than the morning paper. Is it possible for your rivals to steal your thunder? Make
certain that your opponents will not be able to refute your claim. A beer brewery in New
York City came up with the tagline "We sanitize our bottles!" in a typical example around the
turn of the century. Of fact, all other brewers sanitize their bottles as well, but being the first
to state so effectively blocked out competition until one rival developed "super-sterilized
containers." If you're selling your helicopter's advantages, keep in mind that your competitors
may come out with a newer, quicker, see-in-the-dark, track-down-running-criminals machine.
Prepare yourself.
Is it possible to introduce it gradually?
People dislike changes, according to a well-known maxim of human nature, therefore if
you're rebranding your station, make the adjustments gradually. Make the modifications as
uniform as possible 212 AN OUTSTANDING PROFESSIONAL UNIVERSITY Product and
Brand Management with previous relationships, framing them as enhancements. A
redesigned news set, for example, may make it simpler for viewers to observe the weather or
story preparation.
Is it possible that you're alienating your loyalists?
Another axiom of human behavior suggests that it is simpler to keep existing brand fans than
it is to persuade someone to switch brands. As a result, be sure to thank your loyalists while
creating and implementing your branding statement. Even if their demographic isn't as
important to the sales department as others, they have sway on those who are.
Will it be able to stand up to the test of time?
For decades, the world's most famous companies have remained in the same place. Just look
at Coca-Cola, Betty Crocker, and Heinz.
Is your positioning statement strong enough to last that long?
Another common adage is that by the time you, the station, have become bored of a
commercial, it has only begun to make a dent in the hearts and minds of the viewers.
How many times did you hear the Coca-Cola jingle before realizing you were thirsty and in
desperate need of a Coke? Is it Effective in Copy?
This final point is likely to make many creative folks grit their teeth. Check to see if your
positioning statement can be readily and successfully transformed into promotional spots and
ad content. If you've chosen to be "the pleasant and bright station," How does that sentence fit
with a commercial about storm devastation and death? Work it out in copy, and if you find
that it isn't acceptable in some circumstances, make sure the copy constraints are written
down and understood by everyone involved in copy. Look at how the line works graphically
as well. It may seem wonderful in a huge logo, but how does it appear in a smaller format?
What happens to it as a "bug" in a co-op ad in print? What does a microphone flag with your
competition's flags all around it look like?

4.4.7 Tactics for strong brand positioning

Some strategies for building a successful brand are listed below: 1. Visual Identity: A brand's
footprint–its corporate identity, graphic system, or visual voice–can lead to numerous
positive outcomes. It may also lead you right into a brick wall if it fails to effectively portray
the brand and adhere to the story.
2. Advertising: Advertising may be used to generate leads, market products, advocate beliefs,
persuade, soothe unrest, and establish brands, among other things. Advertising is the act of
paying to have a message shown, as well as other things. Advertising provides a fast track to
the market for the brand creator. However, it is not impervious to falling trees, lightning,
severe weather, irresponsible vehicles, or the rare rival with wingsuits.
3. Brand Partnerships: Two brands are sometimes better than one. Collaboration with other
companies, distributors, and distribution channels not only adds firepower and lowers costs,
but it may also boost a brand in the long run. Partnerships may range from as basic as two
firms co-hosting an event to more complex agreements encompassing new selling channels,
cooperative ad expenditure, collaborative research, and licensing arrangements. When
selecting a brand partner, you should follow a set of rules that compliment your brand and
help you achieve your business objectives.
4. Media Relations: With 24-hour news, free-flowing information, and breaking news, you
have a lot of options for getting your brand message out there with a layer of authority and
third-party endorsement. Despite the sceptics, the media has a significant impact on the
market. Organizations that do not fully utilize this potent tool will lose out on revenues,
prestige, and a significant brand impact.
5. Community Relations: Community relations refers to any specialty community with whom
the company and the market you serve value a strong good relationship. This covers your
category industry and nonprofit interests for many organizations.
6. Sales Promotions/Events: A promotion is any activity that encourages people to buy
something. Promotions may be effective in both consumer and business-to-business
industries if they are well designed and implemented. A strong sales campaign may help you
launch new items, reintroduce new and enhanced ones, clear out old lines or inventory,
synergize co-brands, cross-sell between product lines, build loyalty, and attract first-time
sample or trial purchases.
7. Customer Service: Serving clients may appear to be an easy chore, yet many sophisticated
business executives are naive to their company's massive service flaws. A service crack is
exceedingly harmful. One too many rude encounters, another insensitive act, or a downright
bitter battle, and your customer will not only make you history, but his rage will spread like
wildfire, destroying even the most well-known brand.
8. Sales: Selling with a brand in hand cuts the time it takes to reach the finish line in half.
Today's selling isn't easy. We are surrounded by new things, billions of choices, and floods of
possibilities. There's a lot of pressure, there's a lot of competition, and the economy is in
trouble. So, what are your options? Put an end to your moaning. When you include a brand in
your sales arsenal, the process becomes more easier and more productive.
9. Merchandising and the Environment: Visual seduction isn't only for shops. More
consideration should be given to merchandising and environmental branding. Merchandising
and the environment were once regarded to be only ornamental displays or point-of-purchase
sale stimulators, but today they constitute a crucial brand-building tool.
10. Online: One thousand clicks at a time to build a brand: Like no other strategy, online
technology has propelled Notes the brand to new heights. The ramifications for all business
sectors and models are enormous. Small businesses may become worldwide. Virtual stores do
not require inventory to function. Time to market has been sped up, and customers now have
more alternatives and choices than ever before. There are tremendous prospects and tough
problems with every new vista. 11. Buzz and Alternative Marketing: There are no rules in
guerrilla or alternative marketing. It's preferable if you can get away with as much as
possible. These are non-traditional campaigns. They cause havoc and surprise. They can be
wacky, irreverent, or strange, and they can be highly powerful and effective at a fraction of
the cost of traditional ads.

4.5 COMPETITIVE PRICING

The process of determining what manufacturers get in return for a product is known as
pricing. Pricing is determined by a number of elements, including production costs, raw
material costs, profit margin, and so on.
Pricing Objectives

The following principles might help you understand the main goals of pricing.
• Maximum return on investment • Decreasing sales turnover • Fulfilling sales target value •
Obtaining target market share • Penetration in market • Introduction in new markets •
Obtaining profit in entire product line regardless of individual product profit targets • Tackle
competition • Recover investments faster • Stable product price • Affordable pricing to target
a larger consumer group
• Pricing products or services in a way that mimics economic growth The pricing goal is to
price the product so that the most profit may be made from it. Pricing Influencing Factors
The price of a product is determined by a number of elements, as it incorporates a large
number of variables. Depending on the characteristics that influence the pricing, factors can
be divided into two categories.

Internal Constraints
The following are the internal elements that impact a product's price growth or decrease:
• Company marketing objectives • Consumer expectations based on historical pricing •
Product characteristics • Product cycle position • Rate of product utilising demand pattern •
Production and advertisement costs • Product uniqueness • Company production line
composition • Price elasticity based on product sales Internal elements that impact pricing are
based on the product's production expenses, which include fixed costs such as labour, rent,
and so on, as well as variable costs such as overhead, power charges, and so on.
Factors from Outside
The following are the external elements that influence the rate of increase and decrease in the
rate of increase and decrease in the rate of increase and decrease in the rate of increase and
decrease in the rate of increase and

• Open or closed market • Consumer behavior for a certain product • Major customer
negotiation • Variation in supply prices • Market competitor product pricing • Social
considerations • Price restrictions imposed by any regulatory authority External variables that
impact pricing include market competition, consumer purchasing flexibility, government
laws and regulations, and so on.

Pricing Methodologies

Some could argue that cost is the least appealing aspect of the marketing mix. Marketing
firms should concentrate on achieving the highest feasible profit margins. Before resorting to
price reductions, the marketer should adjust the product, location, or campaign in some
manner, according to the theory. However, as we will see, pricing is a flexible component of
the mix. Let's look at the various pricing schemes now. − Penetration Pricing is the first step.
To acquire market share, the price charged for products and services is intentionally low.
When this is accomplished, the price is raised. France Telecom and Sky TV both employed
this strategy. These businesses need to attract a huge number of customers to make it
worthwhile, so they provide free phones or subsidized satellite dishes to entice people to join
up for their services. When a huge number of people sign up for a service, the price steadily
rises. When there is a premium movie or sporting event, for example, Sky TV, or any cable
or satellite business, rates are at their highest - therefore they go from a penetration technique
to more of a skimming/premium pricing approach.

2. Low-cost pricing
This is a no-nonsense, low-cost option. The marketing and promotion costs of a product are
maintained to a minimum. Soups, spaghetti, and other items sold in supermarkets are
frequently labelled as "economy brands." Budget airlines are well-known for keeping their
operating costs as low as possible and then charging passengers a reduced fare to load an
aircraft. The first few seats on a flight are sold for a very low price (almost a promotional
price), while the middle bulk are economy tickets, with the last few seats on a trip
commanding the highest price (which would be a premium pricing strategy). During times of
economic downturn, economy pricing sees an increase in sales. It is not, however, the same
as a value pricing strategy, which we will discuss momentarily.
3. Skimming the price list.
When a corporation uses price skimming, it charges a higher price because it has a significant
competitive advantage. The advantage, on the other hand, isn't always sustained. The high
price invites more rivals to the market, and as a result of the increased supply, the price will
surely decline. In the 1970s, manufacturers of digital timepieces employed a skimming
method. Other marketing methods and price approaches are adopted after other
manufacturers are enticed into the market and the watches are manufactured at a reduced unit
cost. New items were created, and the watch industry established a reputation for being
forward-thinking. Premium pricing, penetration pricing, economy pricing, and price
skimming are the four primary pricing policies/strategies depicted in the diagram. They serve
as the exercise's foundation. There are, however, several essential ways to pricing that we
will examine throughout this session.
Psychological Pricing is number four.
When a marketer wants the customer to react emotionally rather than rationally, this strategy
is utilized. For example, the Price Point Perspective (PPP) is 0.99 cents, not $1. It's funny
how customers use pricing as a barometer for all kinds of things, especially when they're in
new marketplaces. When purchasing things in an unfamiliar context, such as when
purchasing ice cream, consumers may use a choice avoidance strategy. Would you prefer
$0.75, $1.25, or $2.00 worth of ice cream? It's all up to you. Perhaps you're breaking into a
completely new market. Assume you're buying a lawnmower for the first time and have no
experience with gardening tools. Would you always choose the cheapest option? Would you
go for the costliest option? Or would you want to use a lawnmower in the middle? In new
areas, price may therefore be a signal of quality or benefits.
Pricing by Product Line. Pricing for a range of products or services reflects the advantages of
different segments of the range. For example, vehicle washes may cost $2 for a simple wash,
$4 for a wash and wax, and $6 for the entire package. Because it gives a range of prices that a
customer considers as fair progressively — throughout the range, product line pricing rarely
matches the cost of creating the goods. If you buy a single packet of chocolate bars or potato
chips (crisps), you can expect to pay X, but if you buy a family pack that is 5 times larger,
you can expect to pay less than 5X the price. Producing and delivering huge family packs of
chocolate/chips might be prohibitively costly. Although they price throughout the entire
range, it may benefit the manufacturer to sell them individually in terms of profit margin.
Rather than single goods, profit is generated on the entire range. Pricing for optional
products. Once clients begin to purchase, businesses will want to raise the amount they
spend. Optional 'extras' raise the product or service's overall price. Optional extras such as
booking a window seat or a row of seats close to each other, for example, will be charged by
airlines.
Budget airlines, once again, take use of this tactic when charging more for extra luggage or
legroom.
Pricing for Captive Products Because the consumer has little option, corporations will charge
a premium for complementary items. A razor maker, for example, will offer a low price for
the first plastic razor and recoup its profit (and more) from the sale of blades that suit the
razor. Another example is when a printer maker offers a low-cost inkjet printer. In this case,
the inkjet firm understands that if you run out of consumable ink, you'll need to buy more,
which might be costly. You have little option because the cartridges are not interchangeable.
Pricing for product bundles. In this case, the vendor has combined many things into a single
bundle. This also helps to get rid of outdated stock. When Blu-ray and videogames near the
end of their product life cycle, they are frequently marketed in bundles. Product bundle
pricing may also be seen with the selling of products at auction, when an appealing item may
be included in a lot with a box of less interesting items, forcing you to bid for the entire lot.
It's a fantastic technique to move slow-moving items and, in some ways, it's a type of
promotional pricing.
Promotional pricing is available. The use of pricing to advertise a product is fairly prevalent.
There are many different types of promotional pricing, such as BOGOF (Buy One Get One
Free), money off coupons, and discounts. Promotional pricing is frequently a source of
contention. Many nations have regulations regulating how long a product must be sold at its
initial higher price before it may be reduced. Promotional price extravaganzas are what sales
are all about! Pricing by location. Varying areas of the world have different prices, which is
known as geographic pricing. Consider the value of rarity or the price rise caused by delivery
charges. In certain nations, some categories of items are subject to higher taxes, making them
more or less costly, or legislation restricting the number of products that may be imported,
boosting prices. Some governments tax inelastic items like alcohol or gasoline to raise
income, and it's evident when you travel abroad that goods might be substantially cheaper, or
much more costly.
Pricing that is fair and reasonable. When external reasons such as recession or increasing
competition drive enterprises to give value products and services in order to retain revenue,
such as value meals at McDonald's and other fast-food restaurants, this method is adopted.
The term "value price" refers to a price that provides excellent value for money, i.e., a price
that makes you feel as though you are receiving a lot of goods for your money. It resembles
economic pricing in many respects. It is important not to make the error of believing that
there is more value in the product or service. In most cases, lowering the price does not
enhance the value. Prices for eMarketing and International Marketing are also available. Our
price goals will be determined by how much money we expect to make from a product, how
much we can sell, and how much market share we can get in comparison to rivals. These
goals, as well as how a firm makes profit in relation to the cost of production, must be
considered when deciding on the best pricing strategy for your mix. The marketer must be
aware of its position in the marketplace. Customers' price expectations should be factored
into the marketing mix.
A product can be priced in a variety of ways. Let's have a look at a few of them and attempt
to figure out what the ideal policy/strategy is in different scenarios. Premium pricing is
available. When there is a distinctive brand, use a premium pricing. This strategy is employed
when the marketer has a significant competitive advantage and is confident in their ability to
charge a higher price. Cunard Cruises, Savoy Hotel accommodations, and first-class air travel
are all offered at exorbitant costs. Promotional Choices The promotion decision is used to
determine the most appropriate and effective approach for promoting a certain product in
order to boost sales. Marketing Communication That Is Integrated IMC stands for integrated
marketing communication, which is a continual effort to develop, implement, and analyze
ways for selling or advertising a product utilising both classic and nontraditional marketing
tactics. The following are the most important characteristics of promotion decisions:
• Setting different promotional tools, each tool targeting a distinct target but all connected to
acquire a common target • Knowledge of customers' opinions that may be applied to the
product to receive the intended reaction
• As a proportionate approach, coordinating advertising, sales, marketing, and public relations
• Constant dissemination of product-related information
Characteristics are used to make promotion decisions. Such judgments aid in product
targeting, lowering advertising costs.
Process of Marketing Communication The eight steps of the marketing communication
process are as follows:
Stage 1: Source • Stage 2: Encoding • Stage 5: Receipt • Stage 6: Response • Stage 7:
Feedback
The source is the promotional information, whereas the feedback is supplied by the customer,
which is assessed and modifications are made for the campaign.
Promotional Choices
The majority of the time, a special price approach is employed to promote a product. Pricing
is modified for a brief period of time with this technique.
The following stages can be used to carry out a promotion decision:
• Step 1: Determine the objectives • Step 2: Determine the marketing budget • Step 3:
Determine the target market • Step 4: Determine the appeal • Step 5: Determine the
promotion mix
Promotional Mixture
A promotion mix is a collection of marketing methods aimed towards achieving a shared
goal. It establishes a framework for allocating funds to various aspects of the promotional
mix.
The following are some aspects of the promotional mix:
• Promotional materials • Advertising
• Personal selling • Public relations and publicity
• Marketing via direct mail
• The kind of product market • The overall marketing approach • The buyer ready stage • The
stage of the product life cycle
Marketing via direct mail
The term "direct marketing" refers to a type of marketing in which a single consumer is
addressed to promote a product.
It tries to attract and retain clients without the assistance of a middleman by contacting them
directly. Direct marketing's goal is to elicit a direct reaction, which might take one of the
following forms:
• A telephone or postal purchase • A request for a brochure or sales material
• A request for a product demonstration • Stage III Transmission • A request for a
salesperson's visit to a site / event (e.g., an exhibition) • Participation is some sort of action
(e.g., joining a political party) • A request for a product demonstration
Direct Marketing Types
The many types of direct marketing are listed below.
• Direct mail marketing • Telemarketing • Teleshopping / home shopping • Database
marketing • Kiosk marketing
These tactics involve approaching potential customers and advertising the goods directly to
them.
services
Buying is commonly associated with the acquisition of items. In a market, however, a client
can also purchase services.
From your doctor to your plumber, everyone is trying to offer you a service. Let us take a
closer look at business services, including its nature and qualities.
Services Provided
"Any intangible product, which is fundamentally a transaction and is passed from the buyer
to the seller in exchange for some value," according to the definition of service (or no
consideration).
Let's examine some of the qualities of a service.
Intangibility, variety, inseparability, and perishability are four traits that distinguish services
from things.
1. Intangibility: Services are intangible in the sense that they are not visible. Acts, actions,
and performances are examples of services that can be experienced but not owned. That is,
unlike a good, a service cannot be tasted, seen, touched, or felt before being consumed. It is
difficult to taste surgery, vacation, or a theatrical performance, for example.
Similarly, a life or vehicle insurance policy, as well as a marital therapist or consultant's
service, cannot be seen, felt, or smelled. Customers can see, touch, hear, and even smell a
television or a mobile phone because of its tangibility.
Only the consumers who have had a service experience can tell if it was good or bad. A
teacher's sample lesson, a doctor's sample consultation, a hotel's sample experience, or an
airline's sample flight are all different from what they claim to be samples of. The sampled
event is not the same as the service event, despite the fact that it is a sample of it. Each
service encounter is individual and one-of-a-kind.
Because of the intangibility of services, their marketing takes on distinct aspects than that of
tangible objects. It is a crucial differentiating trait, according to Bateson. Intangibility may be
divided into two types: perceptible intangibility, which refers to a loss of tactile capacity, and
mental intangibility, which refers to the difficulty of intellectually grasping something.
Customers will find it harder to purchase services as a result of this. As a result, service
consumers rely on cues to make decisions regarding promoted services. Consumers
frequently utilize the external features that surround a service as indicators of service quality.
The quality of a hotel, for example, is determined by physical factors such as the structure,
lawn, lobby, décor, artwork, staff attire, and lighting.
• Decoding (Stage IV)
services
Buying is commonly associated with the acquisition of items. In a market, however, a client
can also purchase services. From your doctor to your plumber, everyone is trying to offer you
a service. Let us take a closer look at business services, including its nature and qualities.

Services Provided
"Any intangible product, which is fundamentally a transaction and is passed from the buyer
to the seller in exchange for some value," according to the definition of service (or no
consideration). Let's examine some of the qualities of a service. Intangibility, variety,
inseparability, and perishability are four traits that distinguish services from things.

1. Intangibility: Services are intangible in the sense that they are not visible. Acts, actions,
and performances are examples of services that can be experienced but not owned. That is,
unlike a good, a service cannot be tasted, seen, touched, or felt before being consumed. It is
difficult to taste surgery, vacation, or a theatrical performance, for example. Similarly, a life
or vehicle insurance policy, as well as a marital therapist or consultant's service, cannot be
seen, felt, or smelled. Customers can see, touch, hear, and even smell a television or a mobile
phone because of its tangibility. Only the consumers who have had a service experience can
tell if it was good or bad. A teacher's sample lesson, a doctor's sample consultation, a hotel's
sample experience, or an airline's sample flight are all different from what they claim to be
samples of. The sampled event is not the same as the service event, despite the fact that it is a
sample of it. Each service encounter is individual and one-of-a-kind. Because of the
intangibility of services, their marketing takes on distinct aspects than that of tangible objects.
It is a crucial differentiating trait, according to Bateson. Intangibility may be divided into two
types: perceptible intangibility, which refers to a loss of tactile capacity, and mental
intangibility, which refers to the difficulty of intellectually grasping something.
Customers will find it harder to purchase services as a result of this. As a result, service
consumers rely on cues to make decisions regarding promoted services. Consumers
frequently utilize the external features that surround a service as indicators of service quality.
The quality of a hotel, for example, is determined by physical factors such as the structure,
lawn, lobby, décor, artwork, staff attire, and lighting.

2. Inseparability: Because goods are physical things, they may be separated from their
manufacturing methods. A mobile phone, for example, may be manufactured in China and
then packaged, stored, and sent to markets where it is sold to end users. In terms of time and
location, goods can be separated from their makers. Services, on the other hand, do not allow
for this flexibility; they are not inextricably linked to their creators. A surgeon's operation, an
airline's trip, an artist's makeup, and a hotel's stay, for example, cannot be divorced from their
creators. Because the service product and the service provider are inextricably linked, service
marketers face unique obstacles. The absence of separation prevents services from reaching
markets without bringing the service production system with them. This necessitates
interaction between the customer and the service production system in order to create and
promote it. For example, health services need individuals visiting health facilities, and a
traveler must check in to utilize an airline's services. Customers, on the other hand, do not
visit Nokia's or Toyota's factories to purchase their products. In services, the absence of
inseparability blurs the lines between production systems and markets. Production takes place
in factories, and items are transported to marketplaces for sale. This process, however, is
hindered in services due to inseparability. Customers can either migrate to service systems or
service systems can migrate to customers. The market shifts to a production system when
patients, students, and travelers migrate to hospitals, schools, and aero planes, accordingly.
The manufacturing system, on the other hand, goes to markets when hotels build branches
and physicians pay visits to patients' homes.
In services, inseparability makes centralized manufacturing problematic. This is a significant
shift from traditional product promotion. To take advantage of economies of scale, goods
manufacturing is often consolidated at a few places. Real-time services are provided.
In the case of services, inseparability necessitates customer-provider contact, which further
intersects operations and marketing. As a result, services are co-created experiences.
Conflicts between the two roles are common as a result of this.
Poor customer satisfaction is frequently caused by their failure to resolve conflicts. In terms
of closeness and participation, the interactions between the supplier and the client may differ.
The conversations between the doctor and the patient are personal and engaging.

3. Variability: Physical things are manufactured to a great degree of consistency. They are
mass-produced or constructed in vast quantities with a high level of uniformity. It's
uncommon to locate two Pears soap cakes or two pieces of Alto automobile that aren't
identical. In services, however, this level of resemblance is very hard to achieve. Two
doctor's visits or two professor's lectures, for example, are never identical. There's a good
chance that two successive stays at the same hotel won't be identical. Because of their unique
qualities, such as intangibility and inseparability, services are prone to variation.
Standardization of services is problematic for a variety of reasons. For starters, intangibility
inhibits the establishment of carefully specified service product standards, as well as their
adherence and control. Because of its physical nature, advancements in quality such as zero
defect have been feasible. Physical commodities have measurable dimensions that enable
quality standards to be established, deviations to be measured, and deviations to be
minimized. Second, human participation and customer-provider interactions contribute to
service unpredictability. Real-time services are created and consumed. Services, unlike
things, cannot be manufactured and then inspected for quality. Post-production quality
control is impossible due to the absence of separation between manufacturing and
consumption. ‘One significant distinction between product and service marketing is that we
cannot manage the quality of our products in the same way that a P&G control engineer on a
manufacturing line can.
When you purchase a box of Tide, you can rest assured that it will clean your clothing. When
you purchase a Holiday Inn room, you may be assured that it will function to provide a nice
night's sleep without any bother, people banging on walls, or any of the other negative
aspects of being at a hotel'. Each service episode is usually distinct from the others. The
interaction between the client and the supplier cannot be completely programmed and
controlled. Despite the fact that service delivery is extremely structured, each consumer
offers a distinct psycho-social component to a service experience. Moods and personality
combinations between the supplier and the client, for example, have an impact on service
interactions. For example, despite extensive training, controlling the mood and emotional
condition of a service provider is challenging. Similarly, one customer's emotional state is
unlikely to be the same throughout two service experiences. Inconsistency in service can take
many forms. For example, quality might vary among various service outlets; for example,
two Cafe Coffee Day (CCD) locations may give distinct service experiences. Variations in
service might be noticed across time as well. Consider the difference in service quality
between lunch and dinner. Perishability:
Because of the simultaneous creation and use of services, they cannot be kept like products.
Unlike products, which have a distinct manufacturing and consumption phase, services are
created and used simultaneously. For example, most consumer durables firms build up
inventory in advance of the holiday season. These supplies enable them to fulfil higher-than-
expected demand when festivals occur. A service marketer, on the other hand, does not have
this luxury. For example, during periods of high demand, hotels and airlines are unable to
build sufficient stockpiles of rooms or tickets to meet demand. In services, inventory is not
feasible. Service businesses' flexibility in dealing with changeable demand situations is
severely limited due to a shortage of inventory. When demand exceeds capacity, the failure to
match service supply with demand results in revenue loss, and when demand is less than
available capacity, the service incurs more costs. Consider the situation of a normal airline.
The demand for travel between places such as Mumbai and New Delhi typically exceeds
capacity during peak travel times in the morning and evening. Similarly, restaurants are
forced to turn away clients during lunch and dinner hours, and movie theatres are unable to
meet demand at peak times. Customers that are unable to be accommodated represent missed
income potential. During off-peak hours, however, demand for planes, restaurants, and movie
theatres is significantly lower than available capacity. Because assets sit idle, unused capacity
is undesirable. Unused seats at theatres, airlines, and restaurants cannot be saved and carried
over to meet demand during peak periods. If production is not utilized simultaneously in
service businesses, it is squandered. 'Unused capacity in a service business is like a flowing
tap in a sink without a stopper; the flow is squandered unless clients, or their things that
require servicing, are present to receive it,' says the author. Due to their capacity to hold
inventories as a buffer, goods marketers are more positioned to match their supply according
to demand situations. Services, on the other hand, will suffer as a result of the lack of stocks.
Service Characteristics We'll go through the most important aspects of services in the
following sections. Service characteristics are generally applicable to any service. The
following are the most essential aspects of services:
• Intangibility • Inseparability • Variability • Perishability • User participation • Lack of
ownership
A restaurant's supper services may differ. In retail, however, it is 1. Lack of Ownership –
Service Characteristics One of the most noticeable qualities of service is a lack of ownership.
It alludes to the fact that unlike a commodity, you cannot possess and store a service.
Intangibility, perishability, and inseparability are all qualities of services that are intimately
connected to this one.
2. Intangibility – Service Characteristics
Intangibility may be the first thing that comes to mind when considering service features.
Intangibility refers to the fact that services cannot be seen, tasted, touched, heard, or smelled
before being purchased. You won't be able to test them out. Airline passengers, for example,
have nothing but a ticket and the assurance that they will arrive at a specific time and
location. Nothing, on the other hand, can be touched.
3. Inseparability - Service Characteristics
Inseparability is one of the characteristics of services, which indicates that they are both
generated and consumed at the same time. This also means that services and their suppliers
are inextricably linked. Physical products, unlike services, are manufactured, then stored,
then sold, and finally consumed. Services are sold first, then produced and consumed
simultaneously. After production, a product might be taken away from the manufacturer. A
service, on the other hand, is created at or near the point of sale. For example, when you go to
a restaurant, you order your food, wait for it to be delivered, and pay attention to the service
offered by the waiter/rest. All of these components, including the suppliers, are integral to the
service and hence cannot be separated. A service provider is the product in services
marketing.
4. Variability – Service Characteristics
Variability is also one of the most essential aspects of services. It refers to the reality that
service quality varies substantially depending on who offers them and when, where, and how
they are delivered. Because of the labor-intensive nature of services, the quality of service
given by different providers, or even the same providers at different times, varies greatly.
5. Perishability – Service Characteristics
Perishability refers to the inability to keep services for subsequent sale or usage. To put it
another way, services can't be inventoried. This is one of the most important qualities of
services since it may have a big influence on the bottom line. Patients are frequently charged
for missed appointments since the service value has been lost. The value was only there at
that time and vanished when the patient did not show up. Perishability of services is not an
issue when demand is consistent. Service businesses, on the other hand, may face difficulties
in the event of variable demand. As a result, transportation corporations possess more more
equipment than they would if demand was consistent throughout the day: demand during rush
hours must be met at that precise moment; it cannot be met later or earlier. As a result,
service organizations employ a variety of ways to better match demand and supply: The
demand is shifting.
6. User participation – Service Characteristics Finally, user engagement is one of the features
of services. Users do, in fact, take part in the creation of every service. Users engage in every
service production, even if they are not needed to be present at the site where the service is
done. Not in the case of a service.
4.5.1 Pricing strategies
services
Buying is commonly associated with the acquisition of items. In a market, however, a client
can also purchase services. From your doctor to your plumber, everyone is trying to offer you
a service. Let us take a closer look at business services, including its nature and qualities.

Services Provided
"Any intangible product, which is fundamentally a transaction and is passed from the buyer
to the seller in exchange for some value," according to the definition of service (or no
consideration). Let's examine some of the qualities of a service. Intangibility, variety,
inseparability, and perishability are four traits that distinguish services from things.

1. Intangibility: Services are intangible in the sense that they are not visible. Acts, actions,
and performances are examples of services that can be experienced but not owned. That is,
unlike a good, a service cannot be tasted, seen, touched, or felt before being consumed. It is
difficult to taste surgery, vacation, or a theatrical performance, for example. Similarly, a life
or vehicle insurance policy, as well as a marital therapist or consultant's service, cannot be
seen, felt, or smelled. Customers can see, touch, hear, and even smell a television or a mobile
phone because of its tangibility. Only the consumers who have had a service experience can
tell if it was good or bad. A teacher's sample lesson, a doctor's sample consultation, a hotel's
sample experience, or an airline's sample flight are all different from what they claim to be
samples of. The sampled event is not the same as the service event, despite the fact that it is a
sample of it. Each service encounter is individual and one-of-a-kind. Because of the
intangibility of services, their marketing takes on distinct aspects than that of tangible objects.
It is a crucial differentiating trait, according to Bateson. Intangibility may be divided into two
types: perceptible intangibility, which refers to a loss of tactile capacity, and mental
intangibility, which refers to the difficulty of intellectually grasping something.
Customers will find it harder to purchase services as a result of this. As a result, service
consumers rely on cues to make decisions regarding promoted services. Consumers
frequently utilize the external features that surround a service as indicators of service quality.
The quality of a hotel, for example, is determined by physical factors such as the structure,
lawn, lobby, décor, artwork, staff attire, and lighting.

2. Inseparability: Because goods are physical things, they may be separated from their
manufacturing methods. A mobile phone, for example, may be manufactured in China and
then packaged, stored, and sent to markets where it is sold to end users. In terms of time and
location, goods can be separated from their makers. Services, on the other hand, do not allow
for this flexibility; they are not inextricably linked to their creators. A surgeon's operation, an
airline's trip, an artist's makeup, and a hotel's stay, for example, cannot be divorced from their
creators. Because the service product and the service provider are inextricably linked, service
marketers face unique obstacles. The absence of separation prevents services from reaching
markets without bringing the service production system with them. This necessitates
interaction between the customer and the service production system in order to create and
promote it. For example, health services need individuals visiting health facilities, and a
traveler must check in to utilize an airline's services. Customers, on the other hand, do not
visit Nokia's or Toyota's factories to purchase their products. In services, the absence of
inseparability blurs the lines between production systems and markets. Production takes place
in factories, and items are transported to marketplaces for sale. This process, however, is
hindered in services due to inseparability. Customers can either migrate to service systems or
service systems can migrate to customers. The market shifts to a production system when
patients, students, and travelers migrate to hospitals, schools, and aero planes, accordingly.
The manufacturing system, on the other hand, goes to markets when hotels build branches
and physicians pay visits to patients' homes.
In services, inseparability makes centralized manufacturing problematic. This is a significant
shift from traditional product promotion. To take advantage of economies of scale, goods
manufacturing is often consolidated at a few places. Real-time services are provided.
In the case of services, inseparability necessitates customer-provider contact, which further
intersects operations and marketing. As a result, services are co-created experiences.
Conflicts between the two roles are common as a result of this.
Poor customer satisfaction is frequently caused by their failure to resolve conflicts. In terms
of closeness and participation, the interactions between the supplier and the client may differ.
The conversations between the doctor and the patient are personal and engaging.
3. Variability: Physical things are manufactured to a great degree of consistency. They are
mass-produced or constructed in vast quantities with a high level of uniformity. It's
uncommon to locate two Pears soap cakes or two pieces of Alto automobile that aren't
identical. In services, however, this level of resemblance is very hard to achieve. Two
doctor's visits or two professor's lectures, for example, are never identical. There's a good
chance that two successive stays at the same hotel won't be identical. Because of their unique
qualities, such as intangibility and inseparability, services are prone to variation.
Standardization of services is problematic for a variety of reasons. For starters, intangibility
inhibits the establishment of carefully specified service product standards, as well as their
adherence and control. Because of its physical nature, advancements in quality such as zero
defect have been feasible. Physical commodities have measurable dimensions that enable
quality standards to be established, deviations to be measured, and deviations to be
minimized. Second, human participation and customer-provider interactions contribute to
service unpredictability. Real-time services are created and consumed. Services, unlike
things, cannot be manufactured and then inspected for quality. Post-production quality
control is impossible due to the absence of separation between manufacturing and
consumption. ‘One significant distinction between product and service marketing is that we
cannot manage the quality of our products in the same way that a P&G control engineer on a
manufacturing line can.
When you purchase a box of Tide, you can rest assured that it will clean your clothing. When
you purchase a Holiday Inn room, you may be assured that it will function to provide a nice
night's sleep without any bother, people banging on walls, or any of the other negative
aspects of being at a hotel'. Each service episode is usually distinct from the others. The
interaction between the client and the supplier cannot be completely programmed and
controlled. Despite the fact that service delivery is extremely structured, each consumer
offers a distinct psycho-social component to a service experience. Moods and personality
combinations between the supplier and the client, for example, have an impact on service
interactions. For example, despite extensive training, controlling the mood and emotional
condition of a service provider is challenging. Similarly, one customer's emotional state is
unlikely to be the same throughout two service experiences. Inconsistency in service can take
many forms. For example, quality might vary among various service outlets; for example,
two Cafe Coffee Day (CCD) locations may give distinct service experiences. Variations in
service might be noticed across time as well. Consider the difference in service quality
between lunch and dinner. Perishability:
Because of the simultaneous creation and use of services, they cannot be kept like products.
Unlike products, which have a distinct manufacturing and consumption phase, services are
created and used simultaneously. For example, most consumer durables firms build up
inventory in advance of the holiday season. These supplies enable them to fulfil higher-than-
expected demand when festivals occur. A service marketer, on the other hand, does not have
this luxury. For example, during periods of high demand, hotels and airlines are unable to
build sufficient stockpiles of rooms or tickets to meet demand. In services, inventory is not
feasible. Service businesses' flexibility in dealing with changeable demand situations is
severely limited due to a shortage of inventory. When demand exceeds capacity, the failure to
match service supply with demand results in revenue loss, and when demand is less than
available capacity, the service incurs more costs. Consider the situation of a normal airline.
The demand for travel between places such as Mumbai and New Delhi typically exceeds
capacity during peak travel times in the morning and evening. Similarly, restaurants are
forced to turn away clients during lunch and dinner hours, and movie theatres are unable to
meet demand at peak times. Customers that are unable to be accommodated represent missed
income potential. During off-peak hours, however, demand for planes, restaurants, and movie
theatres is significantly lower than available capacity. Because assets sit idle, unused capacity
is undesirable. Unused seats at theatres, airlines, and restaurants cannot be saved and carried
over to meet demand during peak periods. If production is not utilized simultaneously in
service businesses, it is squandered. 'Unused capacity in a service business is like a flowing
tap in a sink without a stopper; the flow is squandered unless clients, or their things that
require servicing, are present to receive it,' says the author. Due to their capacity to hold
inventories as a buffer, goods marketers are more positioned to match their supply according
to demand situations. Services, on the other hand, will suffer as a result of the lack of stocks.
Service Characteristics We'll go through the most important aspects of services in the
following sections. Service characteristics are generally applicable to any service. The
following are the most essential aspects of services:
• Intangibility • Inseparability • Variability • Perishability • User participation • Lack of
ownership
A restaurant's supper services may differ. In retail, however, it is 1. Lack of Ownership –
Service Characteristics One of the most noticeable qualities of service is a lack of ownership.
It alludes to the fact that unlike a commodity, you cannot possess and store a service.
Intangibility, perishability, and inseparability are all qualities of services that are intimately
connected to this one.
2. Intangibility – Service Characteristics
Intangibility may be the first thing that comes to mind when considering service features.
Intangibility refers to the fact that services cannot be seen, tasted, touched, heard, or smelled
before being purchased. You won't be able to test them out. Airline passengers, for example,
have nothing but a ticket and the assurance that they will arrive at a specific time and
location. Nothing, on the other hand, can be touched.
3. Inseparability - Service Characteristics
Inseparability is one of the characteristics of services, which indicates that they are both
generated and consumed at the same time. This also means that services and their suppliers
are inextricably linked. Physical products, unlike services, are manufactured, then stored,
then sold, and finally consumed. Services are sold first, then produced and consumed
simultaneously. After production, a product might be taken away from the manufacturer. A
service, on the other hand, is created at or near the point of sale. For example, when you go to
a restaurant, you order your food, wait for it to be delivered, and pay attention to the service
offered by the waiter/rest. All of these components, including the suppliers, are integral to the
service and hence cannot be separated. A service provider is the product in services
marketing.
4. Variability – Service Characteristics
Variability is also one of the most essential aspects of services. It refers to the reality that
service quality varies substantially depending on who offers them and when, where, and how
they are delivered. Because of the labor-intensive nature of services, the quality of service
given by different providers, or even the same providers at different times, varies greatly.
5. Perishability – Service Characteristics
Perishability refers to the inability to keep services for subsequent sale or usage. To put it
another way, services can't be inventoried. This is one of the most important qualities of
services since it may have a big influence on the bottom line. Patients are frequently charged
for missed appointments since the service value has been lost. The value was only there at
that time and vanished when the patient did not show up. Perishability of services is not an
issue when demand is consistent. Service businesses, on the other hand, may face difficulties
in the event of variable demand. As a result, transportation corporations possess more more
equipment than they would if demand was consistent throughout the day: demand during rush
hours must be met at that precise moment; it cannot be met later or earlier. As a result,
service organizations employ a variety of ways to better match demand and supply: The
demand is shifting.
6. User participation – Service Characteristics Finally, user engagement is one of the
features of services. Users do, in fact, take part in the creation of every service. Users
engage in every service production, even if they are not needed to be present at the
site where the service is done. Not in the case of a service.
7.
4.5.2 Price cut and increases according to competitors
In some instances, the corporation may decide that a price reduction or increase is necessary.
It must anticipate buyer and rival reactions in both scenarios.
PRICE CUTS IN THE BEGINNING:
A company's pricing may be reduced due to a variety of factors. Excess capacity is one of
these situations. In this instance, the company need additional business but is unable to obtain
it through greater sales efforts, product improvements, or other means. It may abandon its
"follow-the-leader pricing," in which it charges around the same as its main competition, and
slash prices aggressively to promote sales. However, as the airline, construction equipment,
fast food, and other sectors have seen in recent years, lowering costs in an industry with
surplus capacity can lead to price wars as competitors compete for market share. Another
factor that influences price adjustments is a loss of market share due to intense price rivalry.
Automobiles, consumer electronics, cameras, watches, and steel, for example, all lost market
share to Japanese competitors, who offered high-quality items at cheaper rates than their
American competitors. As a result, American businesses have turned to more aggressive
pricing.

PRICE INCREASES AT THE BEGINNING:

A successful price rise can result in a significant increase in earnings. If a company's profit
margin is 3% of sales, for example, a 1% price rise will raise earnings by 33% if sales volume
remains same. Cost inflation is a key driver in price hikes. As expenses rise, profit margins
are squeezed, and corporations are forced to pass cost increases on to customers. Oversupply
is another because that leads to price increases: when a corporation can't meet all of its
customers' requirements, it might raise prices, ration items, or do both.
To keep up with growing costs, businesses can raise their pricing in a variety of ways.
Dropping discounts and adding higher-priced goods to the line can almost silently boost
prices. Alternatively, prices might be raised publicly. The corporation must avoid being
viewed as a price gouger when passing on price hikes to customers. Companies must also
consider who would bear the impact of pricing increases. Customers have long memories,
and they will ultimately move away from firms or even entire sectors that they believe are
overcharging them. There are a few methods for avoiding this issue. Any price rise should be
approached with a sense of justice.
Price rises should be accompanied by a firm communication campaign informing clients of
the reasons for the increase. Customers should be given prior warning as possible so that they
may plan ahead and shop around. It's also a good idea to start with low-visibility price moves:
Discounts are being phased out, minimum purchase amounts are being raised, and low-
margin goods are being phased out. Escalator provisions should be included in long-term
project contracts or bids, based on criteria such rises in recognized national price indexes.
The company's sales team should assist corporate clients in finding cost-cutting opportunities.
The corporation should look for solutions to satisfy rising costs or demand without raising
pricing wherever possible. It may, for example, investigate more cost-effective ways to
manufacture or distribute its goods. It has the option of shrinking the product rather than
boosting the price, as candy bar producers sometimes do. It can use less costly ingredients or
eliminate particular features, packaging, or services from a product. Alternatively, it can
"unbundle" its products and services, eliminating and pricing parts that were previously
included in the package. IBM, for example, now sells training and consulting services
separately.

4.5.3 Competitor’s reaction to price changes

Changes in a company's price seldom go unnoticed by competitors. If the rival is the market
leader or an active challenger, the reaction may be powerful and aggressive (for example,
lowering prices more after a firm has begun price reduction). Competitors may follow the
initiator's lead in lowering prices, nullifying the initiator's advantage, or they may opt not to
follow the initiator's price hike, placing the initiator at a disadvantage.
1. A price increase that no one else follows might drive buyers away from rivals' products. A
price decrease that is met by the competition will not enhance the initiator's sales, but it may
diminish the industry's profitability.
If a company's price increase is matched by competitors, it will achieve its goal, but if it isn't,
it will fail. The way a firm reacts to pricing changes made by another company is determined
by its strategic goals. If a company's strategic goal is to hold or harvest, it is likely to follow a
competitor's price hike. It will be able to generate larger sales without being perceived as a
corporation that raises prices. If a company's strategic goal is to build, it will not follow a
competitor's price hike. It hopes that because of its low pricing, some of the competitor's
consumers would move to its product. If a company's strategic goal is to develop or keep
market share, it will follow a competitor's price decreases since its consumers will otherwise
switch to the competitor's lower-priced goods. And if a company's strategic goal is to harvest,
it will overlook a competitor's price decrease since it wants to maximize earnings from
whatever consumers it has left and isn't interested in courting new ones. As a result, if a
corporation wants to know how its rivals will respond to pricing changes, it must first
understand their strategic objectives. By keeping a careful eye on how rivals’ price and
promote their products, a corporation may get a good picture of their strategic goals. It should
also speak with their suppliers, distributors, and retailers, as well as hire their workers, to
have a better understanding of their strategic goals.
3. If a firm raises prices in response to rising inflation, rivals will follow suit since they are
also harmed by rising inflation, and customers expect prices to climb when inflation rises.
However, if a corporation raises prices because its strategic goal is to harvest, rivals' reactions
will be influenced by their own strategic goals, and they may or may not follow suit.
4. If a firm has extra capacity, it will follow a competitor's price decrease since its consumers
would switch if it does not, which it cannot afford given its excess capacity.
competition can't match it in terms of cost-cutting.
4.5.4 Advantages of competitive pricing strategy
A higher success rates
Developing a competitive pricing plan for your company can help it expand. A competitive
pricing strategy's outcomes are generally seen within a short period of time. In order to assess
the long-term ramifications, the business owner must be able to adequately comprehend the
broader trend as well as their place in the industry.

Enriching your knowledge of your sector and relevant rivals will help you make better
business decisions, increasing your prospects of long-term success in the business world.

Some business owners fail to meet their objectives because they conduct and implement their
competitive pricing strategy poorly. As a consequence, adopting a superior competitor
monitoring tool to optimize your competitive pricing strategy will save you from unfavorable
outcomes.

For ongoing analysis, the application offers you with worldwide insights into your
competition, as well as tracking your competitor's product or service variety and prices over
time. With this tool, you can keep track of, regulate, and adjust prices as needed.

Avoid losing money on the market.

Competitive price analysis enables a company to manage its competitiveness by preventing
consumers and market share from being lost to competitors. By keeping pricing, the same as
or lower than your competitors, customers will be less likely to switch brands or pick your
competitors' products/services over yours, allowing you to maintain market share. Competitor
pricing monitoring helps you to react to any move your competitors make, which can help
you improve your company's positioning.

Increase your profit margins.

Competitive pricing does not necessarily imply that prices should be decreased or that they
should be set at the lowest point in the market. When compared to rivals, pricing in the center
of the spectrum might be just as successful and have a minimal influence on your bottom
line.

Another thing to think about is whether your product or service is price elastic, which implies
that if the price changes, it will have a large influence on demand since customers are more
price sensitive. This information might help you determine if you should raise or lower your
rates in order to stay competitive in a price war.

Pricing that changes as time goes on

Dynamic pricing is the most advanced approach of competitive price research. Information
on rivals' pricing strategies may usually be gained with the use of dynamic pricing. This
increases your capacity to compete in the market while also increasing your profit margins.
This is one of the most complex and helpful competitive pricing tactics available, and it may
be utilized as a triggering element for updating your own rates, as well as propel your
organization to new heights.

Efficiency
When a competitive pricing approach is integrated with numerous different pricing
techniques, it becomes more efficient. Investing in a price comparison tool is necessary if one
wishes to maintain any profitability using this method. Using price tracking software will
provide you quick access to information that your rivals would struggle to acquire manually.
4.5.5 how is competitors-based pricing calculated?
To get at a pricing choice, put your rivals together in increasing order of importance and
evaluate where your product and brand falls inside that range.

When using a competitor-based pricing approach, there are two sorts of competitors to be
mindful of when grouping them together:

Direct competitors: Direct competitors fight for the same market share by offering identical
products or services.

Indirect competitors: Indirect competitors sell products or services that are similar to yours
yet address issues in a little different way. They might be items that simply have one or two
features in common with yours and don't fight for market share in a holistic approach.

You must now study competition pricing and determine how to price your product after
determining its market fit. After doing comprehensive research of your competition, you have
three options for pricing your product.
Offering items or services that are more expensive than those offered by your competitors. It
is frequently done when you believe your products or services are superior to those offered
by your rivals.

Price matching is another term for pricing on the same level. Your product is priced similarly
to that of your rivals. However, even if your product and features are similar to those of your
rivals, your major focus should be on the extra value your product provides.

Pricing below the competition: If you price below the competition, your product will be
constrained in terms of features and usefulness. It may also be used when you wish to attract
clients' attention by offering a competitive pricing in order to enhance sales and brand value.

4.6 SUMMARY

 What is Competitive advertising and how it effects the organisation internally as well as
externally.
 While comparative advertising has several good effects on both consumers and
companies, advertisers should consider certain negative consequences while
undertaking comparison campaigns.
 Brand judgements focus on customers’ personal opinions and evaluations with regard
to the brand.
 Brands should use brand resonance as a goal and a means to interpret their brand
related marketing activities.
 Ensuring the identification of the brand with customers, establishing the totality of
brand meaning in the minds of customers, eliciting the proper customer responses to
this brand identification and brand meaning, converting brand response to create an
intense, active loyalty relationship between customers and the brand are the four
important steps in building a brand

4.7 KEYWORDS

 Brand: A brand is a “name, term, sign, symbol or design or a combination of them,

intended to identify the goods and services of one seller or group of sellers and to
differentiate them from those of competition”.

 Brand Evolution: It has an interesting history. In ancient Roman and Greek society,
shopkeepers hung pictures above their shops of the products they sold. There was a
 high degree of illiteracy in those days, the pictorial representation did help the
buyers. Each retailer then started developing symbols to represent his specialty.

 Brand Logo: Logos are shorthand devices indicating capability of a brand.

 Creativity: It plays an important role to grow up the brand to its full potential. If no
creative effort is taken, there is danger of the brand relapsing to its augmented or
expected level.

 Product Positioning: This is the act of developing a product offer and selecting an
image to occupy a distinctive place in the minds of the target market.

 Pro-environment approach to Positioning: This approach to positioning aims to

show that the company is a good citizen.

 Public Relation: Public relations are the way a strong brand is truly established and
advertising is how the brand is maintained.

 Competitive - Competition is something that people who are competitive like doing
– finding out who knows the most, who runs the quickest, who can eat the hottest
dogs, and so on. Some people are fiercely competitive in all aspects of their lives.
You'll recognize them by their continual comparisons with others and their attempts
to learn about what others have and accomplish - all in the name of ensuring that they
remain "ahead of the game." Competitive can be used to describe any type of contest,
such as a competitive sandcastle-building competition.

4.8 LEARNING ACTIVITY

1. What is the difference between brand awareness and brand loyalty?

___________________________________________________________________________
___________________________________________________________________________

2. What is the purpose of strategic management process in brand?

___________________________________________________________________________
___________________________________________________________________________

4.9 UNIT END QUESTIONS

A. Descriptive Questions
Short Questions:

1. Define product positioning. Narrate the product positioning strategy.

2. How a brand makes an image in the mind of customer? Give a suitable example.
3. Explain the benefits of strong brand
4. Comment on the challenges of branding.
5. Discuss something about powerful brands of the world. Also give some powerful
brands name of India

Long Questions:

1. What are the different types of differences that a company can promote? Discuss the
positioning errors that a company should avoid.
2. What are the factors behind for choosing a brand name?
3. Briefly explain the various steps in strategic brand management process.
4. Distinguish between product segmentation, product positioning, product adoption and
product standardisation
5. What part do market research and product positioning play in the success of a product
in the market?

B. Multiple Choice Questions

1. Which of the following is a criterion a company should meet to be successful in

differentiation?

a. Affordable

b. Profitable

c. Communicable

d. All of the above.

2. A positioning strategy may be used to 

a. Differentiate a firm from its competitors in a mass-product market

b. Position a firm to serve target customers in one or more product market niches.

c. Both a & b

d. None of the above.

3. Positioning is a strategy of 
a. Establishing a position for a product in the consumer’s frame of reference

b. Differentiating the product from others in the same category

c. Both a & d

d. None of the above.

4. Which of the following decision consists a positioning strategy?

a. The product or service offering

b. How distribution will be accomplished

c. Choice of a pricing strategy, and

d. All of the above.

5. The essence of a good positioning strategy is 

a. One that will deliver customer satisfaction to the firm’s target market

b. One that meets corporate and marketing objectives

c. international competition

d. Both a & c

Answers

1-d, 2-c, 3-c, 4-d, 5-d

4.10 REFERENCES

References book

 Cravens, D.W. Strategic Marketing, Homewood Illinois, Richard D. Irwin, 1987.

 Kayak, E and Slavitt, R. Comparative Marketing Systems, New York, Praeger,
1984.
 Kotler, Philip. Marketing M a n a g e m e n t : Analysis, P l a n n i n g ,
I m p l e m e n t a t i o n a n d C o n t r o l , New Delhi, Prentice Hall of India, 1997.
 Porter, M . E . Competitive a d v a n t a g e : Creating, S u s t a i n i n g , S u p e r i o r
P er fo rm an ce , N e w
  York, Free Press, 1985.

o 5. Porter, M.E. Competitive S t r a t e g y : Techniques f o r A n a l y s i n g

I n d u s t r i e s C o m p e t i t o r s , New York, Free Press, 1980
Textbook references
 Advertising Management – concepts and cases Mahendran Mohan.
 Marketing Management – Philip Kotler
 Branding – Geoffrey Randol
 Strategic Brand Management – Caperer
 Advertising and Sales Promotion Management – Salutat, V.V. Ratra
 Principles and Practice of Marketing – C.B. Memoria and R.L.Joshi
 Advertising and Salesmanship – P.Saravanavel.H.J. Bernardin, Human Resource
Management, Tata McGraw Hill, New Delhi, 2004.

Website
 https://www.quora.com/What-is-the-most-useful-promotional-tool-in-marketing-
publicity-sales-promotion-advertising-or-all-of-the-above
 https://www.vocabulary.com/dictionary/competitive
 https://www.sarpublisher.com/advertising-mcq-questions-and-answers-part-3/

UNIT - 5: COMPETATIVE ADVERTISING & ROLE OF

SALES PROMOTION IN COMPETATIVE
MARKETING
STRUCTURE
5.1 Learning Objectives
5.2 Introduction
 5.3 Competitive Advertising
5.3.1 Competitive Advertising Advantage
5.3.2 Competitive Advertising Disadvantage
5.3.3 Competitive Advertising and Effective Function
5.3.4 Competitive Advertising in India
5.3.5 The Effect of Competitive Advertising on Consumers
5.4 Role Of Sales Promotion on Competitive Marketing
5.5 Impact of Sales promotion on competitive Marketing
5.6 Summary
5.7 Keyword
5.8 Learning Activity
5.9 Unit End Question
5.10 References

5.0 LEARNING OBJECTIVES

After studying this unit, you will be able to:

 Describe nature of competitive advertising

 Identify competitive advertising Advantage and disadvantages
 State the Role of sales promotion in competitive marketing
 To know about the impact sales promotion

5.1 INTRODUCTION
History of Competitive advertising.
According to some studies (Swayne & Stevenson, 1987), comparative advertising was
practiced in the United Kingdom as early as the seventeenth century. Nonetheless,
comparative advertising was more adequately recognized in the early twentieth century. The
majority of advertisements during this era were negative in nature. rather than creating
comparisons. One of the earliest comparative studies Advertising campaigns are believed to
have been published in the United States in the early 1930s. The Advertisement aims to
persuade potential buyers to "Look at All Three" (advertisement's title). campaign) before to
making a buying decision on a vehicle (Harris, 1967). J. Stirling Getchell designed the print
advertisement specifically (Appendix 1). He snapped a photograph of the CEO using his
automobile (personification approach), and in the copy, he emphasized the exceptional
Plymouth's functions Additionally, without mentioning any products, Getchell is as smart as
ever. alluded to Ford and Chevrolet, but then stated that Plymouth was the greatest. all. Prior
to the 1960s, competitive brands were referred to as "Brand X" or "leading". trademarks,
"common brands," or "other generic brands" (Barry 1993, 19 & Beard 2013b). Not until the
1970s, when the FTC restricted the use of comparison advertising, Comparisons to "brand X"
become irrelevant. Advertisers are bound by the policy and endorsement. were given
permission to use a variety of competing methods to market their products or services. This
move was consistent with the objectives of promoting the useful and necessary information
for market participants, particularly consumers (1975, Willkie & Farris et al., 8). Although
professionals initially had a prejudice towards implementation of comparison advertising,
they later confessed it as an error in the 1990s. In marketing, the standard mode of
communication is (Ronald & Moon 1995, 108). Comparative commercials, particularly
explicit ones, were largely acceptable on a national scale. from the 1990s to the present,
despite being viewed as disparagement.

Sales promotion in competitive marketing.

Sales promotions are generally considered as having tactical, rather than strategic, potential.
This is accounted for by the vast range of promotions, along with the hurried nature of
marketing management. Proposes that promotions may give strategic direction in directing,
targeting and positioning choices, and can assist to establish and sustain competitive
advantage. This may be sustained by developing a regular stream of promotions, which
complement each other, within a strategic strategy. Competitive advantage can be acquired
through cost leadership or differentiation. But cost leadership is more difficult to sustain. It is
thought the greatest strategy to sustain advantage is to encourage difference through non‐
price‐based marketing. These frequently convey signs of worth, which need cautious
management.

5.2 COMPETITIVE ADVERTISING

Comparative advertising definition

By definition, this is a promotional tactic in which a corporation asserts its superiority over
rivals' products or services by direct or indirect comparisons. Advertisers can directly or
implicitly identify competing brands in comparison advertising.
Willkie and Farris (1975, 7) defined comparative advertising as "advertising that: 1.
Compares two or more clearly named or recognizably presented brands belonging to the
same general product or service class, and 2. Does so in terms of one or more specified
product or service features."
Other scholars have endorsed this remark as a conventional definition of comparative
advertising throughout the years. However, Willkie & Farris argue that the definition is too
narrow, requiring advertisements to directly specify the comparative companies.
Additionally, Willkie & Farris concentrated only on product-based concepts. The marketed
brands may simply make comparisons between their own product qualities and those of their
competitors. Meanwhile, McDougall (1977) took a larger view of competitive advertising. He
proposed merging all types of advertising that indicate competing superiority in other facets
of items. As a result, an advertising will always be of high quality. McDougall's concept
applies as long as there is a direct or indirect comparison.
Comparative advertising's history
According to some studies (Swayne & Stevenson, 1987), comparative advertising was
practiced in the United Kingdom as early as the seventeenth century. Nonetheless,
comparative advertising was more adequately recognized in the early twentieth century.
Rather of making comparisons, the majority of advertisements during this era presented
opponents unfavorably. One of the earliest comparison advertising campaigns is said to have
been published in the United States in the early 1930s. The advertisement attempted to
persuade prospective automobile buyers to "Look at All Three" (the campaign's slogan)
before making a purchase (Harris, 1967). J. Stirling Getchell designed the print advertisement
specifically (Appendix 1). He photographed the CEO in his automobile (a tactic known as
personification), and in the text, he highlighted the Plymouth's remarkable features.
Additionally, Getchell skillfully alluded to Ford and Chevrolet without mentioning any
brands, but then acknowledged Plymouth as the greatest of all.
Prior to the 1960s, brands were referred to as "Brand X," "leading brands," "ordinary brands,"
or "other generic brands" (Barry 1993, 19 & Beard 2013b).
Comparisons to "brand X" persisted until the FTC controlled comparative advertising in the
1970s. Advertisers were permitted to use a variety of competing methods to market their
products or services within the terms of the policy and endorsement. This decision was
consistent with the objectives of improving the relevant and necessary information available
to shareholders in the marketplace, particularly to consumers (Willkie & Farris et al. 1975, 8).
Although professionals first opposed comparison advertising, by the 1990s, they had
accepted it as a standard mode of marketing communication (Ronald & Moon 1995, 108).
From the 1990s until the present, comparison commercials, particularly explicit
advertisements, were generally approved in national newspapers and other broadcast media,
despite their perception as disparagement.
Global customs
As can be seen, comparison advertising is a well-established kind of marketing creativity.
Likely other forms of advertising, comparative advertisements are frequently founded on
television commercials, print advertisements, billboards, outdoor campaigns, websites, social
media, and direct email, among others. The following examples of outstanding comparative
commercials illustrate what it is and how businesses used it.
Hertz vs. Avis – Car rental sector
In 1962, Hertz was the sole vehicle rental firm operating in the United States. Avis is one of
the service sector's brands. The tagline "By far the most people... utilize Hertz Rent-A-Car"
was first used in 1956. Avis released the print 15 series "We Try Harder" a few years later
(Appendix 2). This campaign not only repositioned Hertz, but also established Avis as a
serious competitor. Hertz's market dominance began to wane, and consumers began to choose
Avis. Hertz's conflict with Avis continues with the following response to its rival: " "Avis has
been telling you for years that Hertz is the best. Now we'll explain why." " (Appendix 2).
Even though new rivals have joined the market, Avis and Hertz continue to hold the
industry's leadership position. Clearly, the interaction between No. 1 and No. 2 continues to
this day.
Complin vs. Horlicks in the Indian market - Sector: Nutritional beverage
In the healthy drinks category, the most noteworthy comparison advertisement shown on
Indian television was between Horlicks and Complin. The advertisements contrasted items on
various aspects, including their values, costs, and nutrient content.
Initially, Complin implied in the commercial "I am a Complin Boy" that it is a better
alternative than brand 'H'. Horlicks responds to Complin’s letter by stating that whereas
Complin can only make a boy taller, Horlicks makes him "Taller, Sharper, and Smarter."
However, because these advertising perplexed and upset their consumers, the corporations
decided to discontinue similar initiatives.
Samsung vs. Apple - Mobile/Technology Sector
Samsung and Apple, the two technological industry titans, are well-known for their battle for
smartphone market supremacy.
Samsung aired a television commercial titled "The Next Big Thing" in late 2011 to promote
the Galaxy S II, the company's newest smartphone. In the advertisement, a huge line of Apple
aficionados waiting for the new iPhone was seen inspecting onlookers' Galaxy S IIs.
Samsung not only teased iPhone customers with the line "Why don't you guys simply
purchase 4G phones?" but also used the opportunity to advertise their bigger screens
(Appendix 3).
A few years later, Samsung lampooned Apple once more in the print advertisement "It
doesn't take a genius," which ran in a US newspaper. The replica revealed areas in which the
Galaxy S III is comparable to or better than the iPhone 5. For example, it 16 features a larger
and higher-resolution display, a longer battery life, and a greater storage space. However,
such advertisements elicited no response from Apple. This appears to be because Samsung's
plan did not worry them in the least (Appendix 3).
Another example of comparison advertising in recent years is the brand battle in Vietnam
between Milo and Ovaltine. It will be extensively examined and analyzed in Chapter 5 of the
thesis.
Comparative advertising's history
According to some studies (Swayne & Stevenson, 1987), comparative advertising was
practiced in the United Kingdom as early as the seventeenth century. Nonetheless,
comparative advertising was more adequately recognized in the early twentieth century.
Rather of making comparisons, the majority of advertisements during this era presented
opponents unfavorably. One of the earliest comparison advertising campaigns is said to have
been published in the United States in the early 1930s. The advertisement attempted to
persuade prospective automobile buyers to "Look at All Three" (the campaign's slogan)
before making a purchase (Harris, 1967). J. Stirling Getchell designed the print advertisement
specifically (Appendix 1). He photographed the CEO in his automobile (a tactic known as
personification), and in the text, he highlighted the Plymouth's remarkable features.
Additionally, Getchell skillfully alluded to Ford and Chevrolet without mentioning any
brands, but then acknowledged Plymouth as the greatest of all.
Prior to the 1960s, brands were referred to as "Brand X," "leading brands," "ordinary brands,"
or "other generic brands" (Barry 1993, 19 & Beard 2013b).
Comparisons to "brand X" persisted until the FTC controlled comparative advertising in the
1970s. Advertisers were permitted to use a variety of competing methods to market their
products or services within the terms of the policy and endorsement. This decision was
consistent with the objectives of improving the relevant and necessary information available
to shareholders in the marketplace, particularly to consumers (Willkie & Farris et al. 1975, 8).
Although professionals first opposed comparison advertising, by the 1990s, they had
accepted it as a standard mode of marketing communication (Ronald & Moon 1995, 108).
From the 1990s until the present, comparison commercials, particularly explicit
advertisements, were generally approved in national newspapers and other broadcast media,
despite their perception as disparagement.
Global customs
As can be seen, comparison advertising is a well-established kind of marketing creativity.
Likely other forms of advertising, comparative advertisements are frequently founded on
television commercials, print advertisements, billboards, outdoor campaigns, websites, social
media, and direct email, among others. The following examples of outstanding comparative
commercials illustrate what it is and how businesses used it.
Hertz vs. Avis – Car rental sector
In 1962, Hertz was the sole vehicle rental firm operating in the United States. Avis is one of
the service sector's brands. The tagline "By far the most people... utilize Hertz Rent-A-Car"
was first used in 1956. Avis released the print 15 series "We Try Harder" a few years later
(Appendix 2). This campaign not only repositioned Hertz, but also established Avis as a
serious competitor. Hertz's market dominance began to wane, and consumers began to choose
Avis. Hertz's conflict with Avis continues with the following response to its rival: " "Avis has
been telling you for years that Hertz is the best. Now we'll explain why." " (Appendix 2).
Even though new rivals have joined the market, Avis and Hertz continue to hold the
industry's leadership position. Clearly, the interaction between No. 1 and No. 2 continues to
this day.
Complin vs. Horlicks in the Indian market - Sector: Nutritional beverage
In the healthy drinks category, the most noteworthy comparison advertisement shown on
Indian television was between Horlicks and Complin. The advertisements contrasted items on
various aspects, including their values, costs, and nutrient content.
Initially, Complin implied in the commercial "I am a Complin Boy" that it is a better
alternative than brand 'H'. Horlicks responds to Complin’s letter by stating that whereas
Complin can only make a boy taller, Horlicks makes him "Taller, Sharper, and Smarter."
However, because these advertising perplexed and upset their consumers, the corporations
decided to discontinue similar initiatives.
Samsung vs. Apple - Mobile/Technology Sector
Samsung and Apple, the two technological industry titans, are well-known for their battle for
smartphone market supremacy.
Samsung aired a television commercial titled "The Next Big Thing" in late 2011 to promote
the Galaxy S II, the company's newest smartphone. In the advertisement, a huge line of Apple
aficionados waiting for the new iPhone was seen inspecting onlookers' Galaxy S IIs.
Samsung not only teased iPhone customers with the line "Why don't you guys simply
purchase 4G phones?" but also used the opportunity to advertise their bigger screens
(Appendix 3).
A few years later, Samsung lampooned Apple once more in the print advertisement "It
doesn't take a genius," which ran in a US newspaper. The replica revealed areas in which the
Galaxy S III is comparable to or better than the iPhone 5. For example, it 16 features a larger
and higher-resolution display, a longer battery life, and a greater storage space. However,
such advertisements elicited no response from Apple. This appears to be because Samsung's
plan did not worry them in the least (Appendix 3).
Another example of comparison advertising in recent years is the brand battle in Vietnam
between Milo and Ovaltine. It will be extensively examined and analyzed in Chapter 5 of the
thesis.
5.2.1 Competitive Advertising Advantage
Comparative advertising definition
By definition, this is a promotional tactic in which a corporation asserts its superiority over
rivals' products or services by direct or indirect comparisons. Advertisers can directly or
implicitly identify competing brands in comparison advertising.
Willkie and Farris (1975, 7) defined comparative advertising as "advertising that: 1.
Compares two or more clearly named or recognizably presented brands belonging to the
same general product or service class, and 2. Does so in terms of one or more specified
product or service features."
Other scholars have endorsed this remark as a conventional definition of comparative
advertising throughout the years. However, Willkie & Farris argue that the definition is too
narrow, requiring advertisements to directly specify the comparative companies.
Additionally, Willkie & Farris concentrated only on product-based concepts. The marketed
brands may simply make comparisons between their own product qualities and those of their
competitors. Meanwhile, McDougall (1977) took a larger view of competitive advertising. He
proposed merging all types of advertising that indicate competing superiority in other facets
of items. As a result, an advertising will always be of high quality. McDougall's concept
applies as long as there is a direct or indirect comparison.
Comparative advertising's history
According to some studies (Swayne & Stevenson, 1987), comparative advertising was
practiced in the United Kingdom as early as the seventeenth century. Nonetheless,
comparative advertising was more adequately recognized in the early twentieth century.
Rather of making comparisons, the majority of advertisements during this era presented
opponents unfavorably. One of the earliest comparison advertising campaigns is said to have
been published in the United States in the early 1930s. The advertisement attempted to
persuade prospective automobile buyers to "Look at All Three" (the campaign's slogan)
before making a purchase (Harris, 1967). J. Stirling Getchell designed the print advertisement
specifically (Appendix 1). He photographed the CEO in his automobile (a tactic known as
personification), and in the text, he highlighted the Plymouth's remarkable features.
Additionally, Getchell skillfully alluded to Ford and Chevrolet without mentioning any
brands, but then acknowledged Plymouth as the greatest of all.
Prior to the 1960s, brands were referred to as "Brand X," "leading brands," "ordinary brands,"
or "other generic brands" (Barry 1993, 19 & Beard 2013b).
Comparisons to "brand X" persisted until the FTC controlled comparative advertising in the
1970s. Advertisers were permitted to use a variety of competing methods to market their
products or services within the terms of the policy and endorsement. This decision was
consistent with the objectives of improving the relevant and necessary information available
to shareholders in the marketplace, particularly to consumers (Willkie & Farris et al. 1975, 8).
Although professionals first opposed comparison advertising, by the 1990s, they had
accepted it as a standard mode of marketing communication (Ronald & Moon 1995, 108).
From the 1990s until the present, comparison commercials, particularly explicit
advertisements, were generally approved in national newspapers and other broadcast media,
despite their perception as disparagement.
Global customs
As can be seen, comparison advertising is a well-established kind of marketing creativity.
Likely other forms of advertising, comparative advertisements are frequently founded on
television commercials, print advertisements, billboards, outdoor campaigns, websites, social
media, and direct email, among others. The following examples of outstanding comparative
commercials illustrate what it is and how businesses used it.
Hertz vs. Avis – Car rental sector
In 1962, Hertz was the sole vehicle rental firm operating in the United States. Avis is one of
the service sector's brands. The tagline "By far the most people... utilize Hertz Rent-A-Car"
was first used in 1956. Avis released the print 15 series "We Try Harder" a few years later
(Appendix 2). This campaign not only repositioned Hertz, but also established Avis as a
serious competitor. Hertz's market dominance began to wane, and consumers began to choose
Avis. Hertz's conflict with Avis continues with the following response to its rival: " "Avis has
been telling you for years that Hertz is the best. Now we'll explain why." " (Appendix 2).
Even though new rivals have joined the market, Avis and Hertz continue to hold the
industry's leadership position. Clearly, the interaction between No. 1 and No. 2 continues to
this day.
Complin vs. Horlicks in the Indian market - Sector: Nutritional beverage
In the healthy drinks category, the most noteworthy comparison advertisement shown on
Indian television was between Horlicks and Complin. The advertisements contrasted items on
various aspects, including their values, costs, and nutrient content.
Initially, Complin implied in the commercial "I am a Complin Boy" that it is a better
alternative than brand 'H'. Horlicks responds to Complin’s letter by stating that whereas
Complin can only make a boy taller, Horlicks makes him "Taller, Sharper, and Smarter."
However, because these advertising perplexed and upset their consumers, the corporations
decided to discontinue similar initiatives.
Samsung vs. Apple - Mobile/Technology Sector
Samsung and Apple, the two technological industry titans, are well-known for their battle for
smartphone market supremacy.
Samsung aired a television commercial titled "The Next Big Thing" in late 2011 to promote
the Galaxy S II, the company's newest smartphone. In the advertisement, a huge line of Apple
aficionados waiting for the new iPhone was seen inspecting onlookers' Galaxy S IIs.
Samsung not only teased iPhone customers with the line "Why don't you guys simply
purchase 4G phones?" but also used the opportunity to advertise their bigger screens
(Appendix 3).
A few years later, Samsung lampooned Apple once more in the print advertisement "It
doesn't take a genius," which ran in a US newspaper. The replica revealed areas in which the
Galaxy S III is comparable to or better than the iPhone 5. For example, it 16 features a larger
and higher-resolution display, a longer battery life, and a greater storage space. However,
such advertisements elicited no response from Apple. This appears to be because Samsung's
plan did not worry them in the least (Appendix 3).
Another example of comparison advertising in recent years is the brand battle in Vietnam
between Milo and Ovaltine. It will be extensively examined and analyzed in Chapter 5 of the
thesis.
Comparative advertising's history
According to some studies (Swayne & Stevenson, 1987), comparative advertising was
practiced in the United Kingdom as early as the seventeenth century. Nonetheless,
comparative advertising was more adequately recognized in the early twentieth century.
Rather of making comparisons, the majority of advertisements during this era presented
opponents unfavorably. One of the earliest comparison advertising campaigns is said to have
been published in the United States in the early 1930s. The advertisement attempted to
persuade prospective automobile buyers to "Look at All Three" (the campaign's slogan)
before making a purchase (Harris, 1967). J. Stirling Getchell designed the print advertisement
specifically (Appendix 1). He photographed the CEO in his automobile (a tactic known as
personification), and in the text, he highlighted the Plymouth's remarkable features.
Additionally, Getchell skillfully alluded to Ford and Chevrolet without mentioning any
brands, but then acknowledged Plymouth as the greatest of all.
Prior to the 1960s, brands were referred to as "Brand X," "leading brands," "ordinary brands,"
or "other generic brands" (Barry 1993, 19 & Beard 2013b).
Comparisons to "brand X" persisted until the FTC controlled comparative advertising in the
1970s. Advertisers were permitted to use a variety of competing methods to market their
products or services within the terms of the policy and endorsement. This decision was
consistent with the objectives of improving the relevant and necessary information available
to shareholders in the marketplace, particularly to consumers (Willkie & Farris et al. 1975, 8).
Although professionals first opposed comparison advertising, by the 1990s, they had
accepted it as a standard mode of marketing communication (Ronald & Moon 1995, 108).
From the 1990s until the present, comparison commercials, particularly explicit
advertisements, were generally approved in national newspapers and other broadcast media,
despite their perception as disparagement.
Global customs
As can be seen, comparison advertising is a well-established kind of marketing creativity.
Likely other forms of advertising, comparative advertisements are frequently founded on
television commercials, print advertisements, billboards, outdoor campaigns, websites, social
media, and direct email, among others. The following examples of outstanding comparative
commercials illustrate what it is and how businesses used it.
Hertz vs. Avis – Car rental sector
In 1962, Hertz was the sole vehicle rental firm operating in the United States. Avis is one of
the service sector's brands. The tagline "By far the most people... utilize Hertz Rent-A-Car"
was first used in 1956. Avis released the print 15 series "We Try Harder" a few years later
(Appendix 2). This campaign not only repositioned Hertz, but also established Avis as a
serious competitor. Hertz's market dominance began to wane, and consumers began to choose
Avis. Hertz's conflict with Avis continues with the following response to its rival: " "Avis has
been telling you for years that Hertz is the best. Now we'll explain why." " (Appendix 2).
Even though new rivals have joined the market, Avis and Hertz continue to hold the
industry's leadership position. Clearly, the interaction between No. 1 and No. 2 continues to
this day.
Complin vs. Horlicks in the Indian market - Sector: Nutritional beverage
In the healthy drinks category, the most noteworthy comparison advertisement shown on
Indian television was between Horlicks and Complin. The advertisements contrasted items on
various aspects, including their values, costs, and nutrient content.
Initially, Complin implied in the commercial "I am a Complin Boy" that it is a better
alternative than brand 'H'. Horlicks responds to Complin’s letter by stating that whereas
Complin can only make a boy taller, Horlicks makes him "Taller, Sharper, and Smarter."
However, because these advertising perplexed and upset their consumers, the corporations
decided to discontinue similar initiatives.
Samsung vs. Apple - Mobile/Technology Sector
Samsung and Apple, the two technological industry titans, are well-known for their battle for
smartphone market supremacy.
Samsung aired a television commercial titled "The Next Big Thing" in late 2011 to promote
the Galaxy S II, the company's newest smartphone. In the advertisement, a huge line of Apple
aficionados waiting for the new iPhone was seen inspecting onlookers' Galaxy S IIs.
Samsung not only teased iPhone customers with the line "Why don't you guys simply
purchase 4G phones?" but also used the opportunity to advertise their bigger screens
(Appendix 3).
A few years later, Samsung lampooned Apple once more in the print advertisement "It
doesn't take a genius," which ran in a US newspaper. The replica revealed areas in which the
Galaxy S III is comparable to or better than the iPhone 5. For example, it 16 features a larger
and higher-resolution display, a longer battery life, and a greater storage space. However,
such advertisements elicited no response from Apple. This appears to be because Samsung's
plan did not worry them in the least (Appendix 3).
Another example of comparison advertising in recent years is the brand battle in Vietnam
between Milo and Ovaltine. It will be extensively examined and analyzed in Chapter 5 of the
thesis.

Fig. 2.2.1

5.2.3 Competitive Advertising Disadvantage

2 Contrary to popular belief, comparative advertising has a number of downsides.
While comparative advertising has several good effects on both consumers and companies,
advertisers should consider certain negative consequences while undertaking comparison
campaigns.
The most often cited downsides of comparison advertising were summarized in the same
study conducted by Thomas Barry (1993). As seen in Figure 3, many individuals argued that
comparison advertising should not be employed since it resulted in the "boomerang" effect.
This occurrence occurred amid the long-running conflict between Coca-Cola and Pepsi.
The second most frequently mentioned argument is that comparison advertising may be
ineffective due to the overproduction of information. As a result, a segment of the audience
will be perplexed and believe the information is unimportant. Following those two factors is
the issue of credibility. Nine research found that comparable advertising may actually detract
from the sponsoring brand's credibility. Inconsistent persuasive effects of comparison
advertising are a result of a lack of trustworthiness (Gottlieb & Sorel 2001, 38). Eight
research concluded that comparative advertisements may be judged deceptive due to
insufficient comparisons. Consumers may misidentify the sponsored brand in certain
circumstances. They may get enraged and distrustful at times. It leads to the conclusion that
comparison advertising is unethical — and also bears some of the blame for ruthless
competition.
23

Fig 2.2.3.1
Finally, but certainly not least, the benefits go to lesser-known firms who are suffering from a
substantial decline in total surplus. While brand warfare may initially eliminate price rivalry,
as product differentiation rises, prices tend to rise higher than prior firms, whereas large
corporations can afford to do so.

2 Contrary to popular belief, comparative advertising has a number of downsides.

While comparative advertising has several good effects on both consumers and companies,
advertisers should consider certain negative consequences while undertaking comparison
campaigns.
The most often cited downsides of comparison advertising were summarized in the same
study conducted by Thomas Barry (1993). As seen in Figure 3, many individuals argued that
comparison advertising should not be employed since it resulted in the "boomerang" effect.
This occurrence occurred amid the long-running conflict between Coca-Cola and Pepsi.
The second most frequently mentioned argument is that comparison advertising may be
ineffective due to the overproduction of information. As a result, a segment of the audience
will be perplexed and believe the information is unimportant. Following those two factors is
the issue of credibility. Nine research found that comparable advertising may actually detract
from the sponsoring brand's credibility. Inconsistent persuasive effects of comparison
advertising are a result of a lack of trustworthiness (Gottlieb & Sorel 2001, 38). Eight
research concluded that comparative advertisements may be judged deceptive due to
insufficient comparisons. Consumers may misidentify the sponsored brand in certain
circumstances. They may get enraged and distrustful at times. It leads to the conclusion that
comparison advertising is unethical — and also bears some of the blame for ruthless
competition.
23

Fig 2.2.3.1
Finally, but certainly not least, the benefits go to lesser-known firms who are suffering from a
substantial decline in total surplus. While brand warfare may initially eliminate price rivalry,
as product differentiation rises, prices tend to rise higher than prior firms, whereas large
corporations can afford to do so.

2.2.4 Comparative Advertising and Affective Function

Attitude is the conclusion of the cognitive step's information processing function.
Attitudes regarding advertisements
Attitude toward the advertisement (Aid) and Attitude toward the brand comprise the affective
function (Bar)Attitude toward the advertisement (Aid) and Attitude toward Swangard 1981)
serve as the affective function. Similarly, to how individuals disregard the content in
comparison commercials owing to their lack of credibility, buyers of comparing companies
almost always perceive comparative marketing initiatives as attack advertisements. They
maintained that comparative advertising forms denigrate and misrepresent their chosen brand,
as well as contribute to extremely contentious arguments concerning the message's origin and
content (Willkie & Farris 1975; Belch 1981; Swangard 1981; Grewal et al. 1997, 4).
A second rationale is based on the tone of speech. Drogo (1989) discovered that comparison
commercials are more aggressive, nasty, and untrustworthy, which leads people to perceive
them for unfavorable brand-attacking advertisements (Bar).

2.Beliefs about the brand

Mackenzie, Lutz, and Belch (1986, 131), as well as Mewling (1987), all agreed on the
importance of attitude. Attitudes regarding the advertisement have a significant impact on
attitudes toward the promoted brand. Furthermore, the association with brand comparison is
another aspect affecting how viewers behave. evaluate the sponsored brand. They frequently
notice similarities between the two brands. in comparative advertisements. If they adopt a
favorable attitude toward comparative analysis brands, particularly if the brand is a market
leader, they may also own comparable sentiments toward the marketed brand; and vice versa.
Comparative advertising, on the other hand, should have a more favorable effect on users'
attitudes towpath sponsoring brand than non-comparative advertising (Levine 1976; Goodwin
and Etgar 2000).Goran & Weinberg 1984; Goran 1980). This is because it provides
customers with more precise and detailed information. Focused consciousness (Willkie &
Farris, 1975), as well as allowing them to distinguish between.3. Comparative advertising and
the role of the conative
The comparison function is critical because it reveals how comparable advertising affects
customers' purchase intentions (Pitchman & Stewart 1990). Swangard (1981) discovered no
significant differences in terms of encouraging consumers' purchase intentions between
comparative and conventional advertising. Drogo (1989) postulated that if comparison
advertising has a beneficial effect on cognitive and emotional functioning, purchasing
behavior would be impacted (regarding conative function). Grewal et al. (1997) also thought
that when consumers watch a comparison commercial, their "buy intention" or "actual
purchase behavior" appears to be more favorable than when they see a non-comparison
advertisement.

5.2.5 Comparative Advertising in India

The growing importance of advertising in a competitive consumer goods market has led in
the phenomena of comparative advertising, in which a seller seeks financial gain by drawing
a contrast between his product or service and that of a rival. Comparative advertising may be
limited to basic puffery, in which the vendor expresses superlative opinions about his own
product's value. When such puffery crosses the line into denigration by portraying a
recognized competitor product in an unfavorable light, it becomes denigration of the other
product. With the courts prohibiting both active and implicit denigration, it is critical to
develop a broadly consistent framework for regulating comparable advertising activities
while also considering the related parties' interests. Customer protection jurisprudence's rising
prominence in recent years means that the consumer is a stakeholder in any regulatory system
just as much as the vendor or competitor. The writers investigated the function of current
regulatory frameworks in local and foreign countries, as well as highlighting relevant case
law on the issue. This type of study would aid in the development of a more complete
regulatory structure that takes the different interests of numerous stakeholders into account.
The word 'comparative advertising' refers to any kind of advertising in which a trademark
owner seeks financial gain by comparing his product, service, or brand to that of a rival.
Comparative assertions can take on a variety of shapes and forms. They may expressly or
tacitly mention a competition. They may underline the items' similarities or distinctions.
The product is 'better than' or 'on a par with' that of a rival.
1
Puffery and denigration are two common components of comparative advertising. Puffery
occurs when an advertising attempts to attract a consumer's attention by making superlative
claims about his goods that are not verifiable statements of reality. Frequently, puffery pushes
the boundaries of tolerance by attempting to cast a bad light on the rival product. The same is
therefore said to be denigration, which is expressly barred by the courts. Thus, the frequently
raised material question is to what degree comparable advertising may be limited. The answer
comes in creating a comprehensive knowledge of the many stakeholders' competing interests,
including the advertiser, competition, and customer. The advertiser's purpose in this instance
is to display his items in such a way that the consumer will be most receptive to them. On the
other hand, the rival would constantly want to discourage advertising that disparages his
product, makes misleading claims, or utilizes his product as a benchmark for the marketer to
claim superiority. The unfortunate consumer is confronted with a cacophony of claims and
has a right to reliable information about the quality or utility of the items available on the
market.
Any attempt to design a framework to control advertising must take into account the
constitutional protection given for in Article 19(1)(a) of the Indian Constitution.
2
Initially, advertising was excluded from the provision, with the Supreme Court ruling in
Hamdard Davakhana v. Union of India 3 that, while ads were a type of communication, they
did not constitute the idea of 'free speech.'
The rationale for this was the same: they were motivated by commercial gain in their efforts
to promote trade and commerce. However, the ensuing process of economic literalization
altered the structure of the consumer products market significantly. Increased competition
resulted from the introduction of a broader choice of products and services, with advertising
playing a critical role in determining customer demand and affecting the market's dynamics
in general. Media outlets, like other types of public entertainment such as sports and cultural
events, were more reliant on advertising income.
The case of Tata Press v. Mahan agar Telephone Nigam Ltd.5 demonstrated a shift in the
constitutional position, with the court finding that advertising benefited consumers by
facilitating the free dissemination of information, resulting in increased public awareness in a
free market, as well as the substantial contributions it made to print and electronic media
organizations.
In light of this, the Court overturned its opinion in Hamdard Davakhana, 6 holding that
advertising is a kind of 'commercial communication,' bringing it within the range of the
constitutional protection granted by Art.
The writers studied the several systems devised to govern comparative advertising throughout
the article, which are both voluntary and statutorily enforced. A comparison has been made to
other countries' processes, with an emphasis on the efforts taken to balance the varied
interests involved. When weighing the conflicting interests of various stakeholders, the
evolution of the legislation regarding competitor and consumer rights has been noted.
Additionally, a review of prior judicial decisions on the subject has been conducted, which
may aid in establishing the norm of tolerance for comparable advertising.

5.2.6 The Influence of Comparative Advertising on consumers

- Cognitive: This term refers to a person's "intellectual, mental, or "rational" condition." The
objective of

This job is to educate audiences about the presence of information on them that is available to
customers. The cognitive function of advertising is comprised of its effect on awareness
(message and brand memory) and

expertise/informativeness (message).
- Affective: This term refers to the condition of "emotional" or "feeling". This role tries to
improve consumers' attitudes and perceptions about the sponsoring brand and the
advertisements (liking and preference).
- Conative: It refers to "the "striving" condition, which is associated with the proclivity to
view items as either positive or negative objectives." This is a critical phase since it
establishes the consumer's beliefs, actions, and choices. The objective of the creative
component is to persuade and develop customer desire for the sponsoring brand or their
products/services. of endorsing businesses, products, or services, and also, offering crucial.
Advertorial comparisons and cognitive function
To summaries the description above, cognitive function gives beneficial data to targeted
audiences, therefore transitioning people from ignorance to knowledge about the sponsored
brand. The cognitive outcomes will be examined through the use of dependent variables such
as attention, awareness, information processing, and credibility.

.1 Appropriateness of promotional actions for sales

Customer service must be focused and service-oriented in any type of commercial activity or
organization. The The sales department is critical to the organization's performance. 
business. The salesperson's task is to bridge the divide between   the requirements of a
prospective consumer and the products/services that  are available to meet the customer's
requirements.  Customer-focused industries alter the way individuals think.
Consider them. It has the potential to convert a dissatisfied consumer into
a satisfied customer. It is also critical that the consumer  must commit to a longer term with
the firm and  create a long-term value-laden partnership. To enable  to do this, it is critical
that the consumer experience with  the goods, the company, and the after-sales service has to
be excellent. The sales process involves a number of steps.
advertising since it is mostly responsible for determining how the.
 Issue that occurs as a result of a lack of effective sales promotional activities
Indeed, a failure to properly conduct a sales campaign will result in decreased income, and
eventually, downward trends in the sales figure. It is equally critical to address the issue in
sales. Any distribution channel used in a firm should strive to cover a large market in order to
maximize income. If a broader coverage is considered, it is possible that the demand for
items will decrease even if greater sales force is recruited. However, issues might develop
when competitors' items are supplied more quickly or their customer services are better
structured. They can better seize control of the market. It is critical to ensure that merchants
manage sales properly and give the appropriate degree of marketing help.
3. How can an effective sales and distribution system benefit any business?

Arrangement.
Marketing items through appropriate distribution channels may contribute to the brand's
strength. Customers must be contacted and informed about various offerings. Additionally, it
contributes to the company's culture and

Market positioning of products and services will occur.

aids in the company's survival and growth. All of the efforts made to boost sales and
distribution build a business and increase overall pleasure and contentment.

SALES PROMOTION ACTIVITIES' OBJECTIVES

To entice people to acquire a new product, free samples are supplied or businesses may be
paid money and goods allowances to stock and sell the product. Sales promotion enables a
business to remain competitive and to compete with another business. It assists in educating
consumers, streamlines salesforce operations, and motivates customers to make greater
purchases. Another goal of sales promotion is to increase product awareness. It has been
shown that the majority of sales promotion strategies are quite efficient in introducing buyers
to new items and can function as a gateway. Additionally, as part of the endeavor to increase
product awareness, numerous sales promotion strategies have the added benefit of collecting
consumer information throughout the campaign's exposure. Sales promotions are extremely
effective in generating interest in a product. Attractive sales promotions may greatly enhance
consumer traffic to retail locations in the retail business.
Another effective method of generating interest is to get buyers to try a product. Typically,
sales promotion strategies are designed to elicit a desired response from clients and are rarely
just informative in nature.
Certain sales campaigns, on the other hand, do provide buyers with access to product
information. For instance, a campaign may offer users the opportunity to trial a fee-based
online service for many days for free. This is a free service that may involve getting product
information through email. After educating clients about the basics, the primary purpose of
sales promotion is to generate demand by enticing them to make a purchase. Special
promotions, particularly those that reduce the customer's cost of ownership (e.g., giving a
substantial discount), might be used to temporarily boost sales. Developing brand value is a
primary goal of sales marketing. A sales promotion may be used to draw attention to a new
product/brand or service that the store has released and to encourage trial purchases. Certain
retail organizations, such as Pantaloon, have rewarded loyal or privileged consumers with
special marketing schemes, such as email-only discounts and price reductions on cash
payments. Sales promotion is an excellent tool for facilitating coordination and establishing a
strong relationship between advertising and personal selling. Existing consumers may be
enticed to purchase more if they learn more about a product's composition.

PROMOTIONAL TOOLS FOR SALES

There are several sales marketing tools available nowadays.
They include the following:
• Price reduction offer: Under this offer, items are sold at a reduced price. This form of
promotion is used to enhance sales during the off season and occasionally when a new
product is introduced to the market.
• Discounts: Products are offered at a discounted price based on a percentage of the original
price. This promotion is intended to increase sales during the off-season.
• End-of-season sale: End-of-season clearance or stock-up sale
Clearance sales are another type of sales marketing method that many retailers use. They are
giving amazing savings if you purchase two articles of clothing and receive three additional
things of your choosing for free. These special offers are made in honor of the new year.
• Seasonal offers: Retail stores present customers with varied discounts and price reductions
during the winter and monsoon seasons. This sort of promotion is intended to increase sales
during certain seasons.
• Festive offer: Retailers have created festive offers for Diwali and Christmas by giving away
items in exchange for making purchases at the store at a discounted price.
• New Year's offer: Retailers provide presents in exchange for discounted New Year's
purchases.
• Coupons for discounts: Retailers frequently provide discounts on a wide variety of clothing.
The coupon is only good for a short time.
• Gift Certificates: Numerous retailers provide gift certificates

1. Pay close attention

According to Willkie & Farris (1975, 11), the efficiency of advertisement in increasing brand
recognition is proportional to its capacity to capture the audience's attention. According to
Blackwell, Minard, and Engel (2006), attention is defined as "the allocation of cognitive
capacity to ads." Comparative advertisements are more appealing to many audiences than
noncomparative advertisements, owing to their novelty (Willkie & Farris 1975, 11; Pitchman
& Stewart 1990, 181). Regrettably, as a result of widespread adoption of this marketing
technique, comparison advertising is no longer as new as it once was. Pitchman & Stewart
(1990, 181) hypothesized that explicit comparison advertisements would garner more
attention if the sponsoring brand held a smaller market share than its adversary. Second, the
more in-depth consumer knowledge they have about things, the more attention they will
devote to a message (Barrio Garcia & Laquez-Martinez 2003). Not only are the marketed and
competitor brands' names included in comparison advertising, but their attributes are also
shown.
Thus, consumers consider the contents contained in comparison advertisements to be more
relevant and useful than those contained in noncomparative advertisements. Because when
people are knowledgeable, they devote less time and effort to acquiring items, services, or
brands.
Additionally, the decision-making process becomes faster and simpler (Lynch & Scull 1982;
Mewling et al. 1990). Thirdly, consumers are always on the lookout for not just informative,
but also novel and enticing material among the hundreds of advertisements they see each day.
The information must be sufficiently informative to aid them in differentiating brands. While
direct comparison advertisements are designed to qualify consumers' demands, consumers
seldom find such distinctive information in non-comparison advertisements.

2. Information gathering and dissemination

The amount of information processed (message elaboration) is quantified by the number of
messages associated with a consumer's ideas that an advertising can elicit. Willkie & Farris
(1975, 14) proposed that "the same characteristics that raise a consumer's attention to a
message might also increase his or her "involvement" with the message." A high level of
customer involvement indicates a higher level of cognitive elaboration (Mewling et al. 1990,
43).
Comparative advertisements, which offer point-by-point differences between promoted and
compared brands, stimulate more mental activity and elaboration than typical advertisements
do (Wilson & Modernizable 1980). By comparing the two brands, it identifies encoding cues
that correspond to memory nodes and networks. As a result, comparable ads contribute to the
spread of brain activity. Spreading activation may be thought of as the stimulation of critical
elements inside and between the memory network's network of relations (Mickalene 1981;
Anderson 1983). Stimulation is also a reason why comparison advertisements are beneficial
for the elaboration process. Those that are comparable in nature are more exciting than
advertisements that are not comparative in nature. It encourages individuals to dispute, either
for or against the message's basic meaning. Supporting arguments or counterarguments are
contingent upon customers' past experiences and familiarity with items and brands.
3.Awareness
Consumers are considered to be aware of marketed brands if they are capable of recognizing
the brand's name and demonstrating their knowledge of the content conveyed in an
advertisement. In comparison to conventional advertisements, the more attention comparative
advertisements receive, the more brands and messages consumers recall (Willkie & Farris,
1975). Additionally, Willkie & Farris hypothesized in their research that competitive
advertising enhances consumers' knowledge of rival products in addition to drawing their
attention. Indeed, while attention is necessary for raising consumers' awareness of brands and
messages, it is insufficient without the participation of the retrieval process. This is one of
two components of the recognition memory model, which is the result of interevent
integration (Horton & Mills 1984, 369). Individuals recall memories more readily in
conditions of increased spreading activation and relational processing (Mewling et al. 1990,
43). In contrary to Willkie & Farris's perspective, comparison advertising clearly boosts
consumers' awareness of the sponsoring brand and message by providing more information
about the advertised brands than non-comparison commercials do.
Because the additional knowledge may provide various retrieval signals and bolster their
memory abilities (Grewal et al. 1997, 3).
4. Believability

Credibility relates to the user's view of the advertisement's correctness and authenticity, as
well as the message contained inside. Credibility is composed on two elements: source

Credibility and believability are synonymous terms.

There are several divergent views on the legitimacy of comparison advertising. Willkie &
Farris (1975) believed that comparison advertisements should provide motelike & Farris's
viewpoints. Comparative advertisements, in their opinion, produce less belief than non-
comparative advertisements (Prasad 1976; Levine 1976; Shemp and Dyer 1978). Contrary to
popular belief, Golden (1979, 526) said that there is no difference in terms of claim
believability between these two ad forms. As can be shown, despite the seeming tension
between belief and credibility, the majority of research indicate that comparison advertising
lacks credibility. The impacts of comparison advertising are believed to be inconsistent and
insufficiently compelling, as a result of the claims' diminished credibility (Swangard 1981;
Belch 1981; Gottlieb & Sorel 1991, 40). Additionally, comparative advertising has been
shown to elicit a greater number of counterarguments than conventional advertising. For
example, customers of comparative brands may develop an aversion to the sponsored brand.
Because the message conveyed by the brand may conflict with their views. Typically, people
maintain their skepticism and reply to the comparison advertising by providing
counterarguments to the message's claims, disparaging the message's source, or making
critical remarks about the message (Wright 1973).

More credible than the conventional. However, a few years later, several studies questioned
this.

5. 3. ROLE OF SALES PROMOTION IN COMPETATIVE

MARKETING
Upon learning about a new development within the firm, organizations must communicate
this information to their present and prospective clients. This is, without a doubt, a
remarkable task in the Nigerian market environment owing to their distinctive nature, which
is further summarized by the idea of Nigeria's economic, demographic, social, political, legal,
religious, cultural, and environmental elements, all of which are intertwined. Marketing
communication is extremely crucial and, at the same time, extremely difficult in any firm to
master. The parts of the marketing communication mix have become key participants in the
lives of all enterprises, whether they are small, medium, or huge in size. They assist in the
movement of market products (goods, services, and ideas) from manufacturers/sellers to
consumers, as well as the development and maintenance of connections with customers,
prospects, and other stakeholders.
In today's world, where the term 'integration' is used to describe a wide range of marketing
and communication-related activities, where corporate marketing is emerging as the next
significant development (Balmer & Gray, 2003), and where relationship marketing is the
preferred paradigm (Greenrooms, 2004), marketing communications must move beyond the
product information model and become an integral part of an organization's overall
communications and relationship management strategy. As part of a comprehensive
marketing strategy for services, external marketing must be implemented, which involves a
company's overall interaction with customers regarding the company's product, price,
distribution channels, and promotional activities. This interaction must also include other
stakeholders in order for the strategy to be successful (Lancaster & Reynolds, 2004).
According to Fill (2005), marketing communications should be a customer-focused activity.
Messages should be founded on a firm's understanding of both the demands of the audience
and the context in which they will be delivered in this way. Marketers have access to a
variety of communication channels, which are generally referred to as the marketing
communication mix (MCM). Advertising, human interaction, publicity and public relations,
sales promotion, instrumental material, and corporate design are some of the aspects that
make up the mixture (Lovelock & Wirtz, 2004).
As a result, the primary focus of our research is on sales promotion. The goal of sales
promotion is to encourage buyers to make an instant purchase of a particular product, hence
increasing the product's overall sales. Organizations engage in sales promotion when they
want to boost the sales of a product or service or increase the number of people who use the
product or service. Sales promotion serves as a competitive weapon by offering an additional
incentive for the target audience to choose one brand over another when making a purchase
or supporting a cause. When it comes to encouraging product trials and accidental purchases,
it is very successful (Adeyemi, 2003). Moreover, in a highly competitive market
environment, sales promotion may be an effective tactic when the goal is to encourage
merchants to carry a new product or influence customers to choose it over competing
products. It also tends to perform better when used to impulsive purchases whose attributes
can be evaluated at the moment of purchase rather to more sophisticated, pricey things that
may require a demonstration by a human being before purchase (Dunamis & Gousei, 2011).
Sales promotion include any communication efforts that take place between a product or
service manufacturer and its end users (consumers), as well as any actions that give
additional value or incentives to final consumers, wholesalers, retailers, and other
organizational clients.
As a result, the main purpose of this research is to investigate the influence of sales
promotional methods on organizational performance with particular reference to Flour Mills
of Nigeria. Although there are several specific objectives, the most important are as follows:
I. investigate the impact of consumer promotion on organizational performance; ii.
investigate the impact of trade promotion on organizational performance; and iii. investigate
the impact of sales force promotion on organizational performance
The following assumptions were created in accordance with the objectives:
I. There is no positive and statistically significant association between consumer promotion
and organizational success.
ii. There is no positive and statistically significant association between trade promotion and
organizational performance.
iii. There is no positive and substantial association between sales force advancement and
organizational success within the company's stakeholder groups.

5.3.1 Understanding the Sales Promotion

According to the American Marketing Association, "those marketing operations, other than
personal selling, promotion, and publicity, that promote consumer and dealer purchasing."
effectiveness, such as presentations, shows, and exhibits, as well as demonstrations and other
non-recurring events.

marketing efforts that are not conventional in nature."

Stabilization of sales volume: Sales promotion contributes to the volume stabilization

process. It is critical for sales promotion to assist in creating sales volume by assuring buyers
about the product's quality and affordability. It is feasible that a client who is now using one
brand will switch to another if another brand is advertised well.
Sales promotion also aids in marketing control. It is critical to maintain market control over
the market's performance and state of affairs. Performance on the market contributes to the
improvement of the market's state, which is accepted by the consumer.
2.Scope of Sales Promotion: The following diagram illustrates the scope of sales promotion:
The critical purpose is to expose a sufficient number of target customers to it. Managers must
select promotional media that will effectively reach a sufficient number of target audiences.
When preparing for exposure, marketers should follow the following steps:
I Identify your intended audience.
ii) Ascertain their numerical values.
iii) Decide on the promotional mediums.
iv) Calculate the promotional expenditure required to obtain the desired number of exposures.
The phrase "attention" refers to the mental condition of concentrating one's thoughts on
something. Marketers are confronted with the challenge of differentiating their campaign and
capturing the consumer's attention.
Comprehension / Understanding: To comprehend or to receive knowledge presented. When
customers understand the message in the manner intended by the advertiser, the aim is met.
Consumers frequently fail to comprehend promotional communications that are poorly
constructed or just lack the ability to elicit attention.
Attitude Change: It entails a willingness to respond in a specific manner. When a
communication includes a promise of a reward, the customer's attitude will shift. For
instance, using a powerful cleaning powder or detergent increases the likelihood of attitudinal
change.
Including conduct or action is critical in personal selling and sales marketing. Numerous
managers push consumers to: I Try the brand for the first time; and ii) Repurchase the brand.
iii) Purchase further product from the brand iv) Encourage friends to purchase the brand v)
Visit a retail location vi) View a demonstration of the brand vii)Try-out the brand

According to W.J. Stanton, "sales promotion is described as "devices that stimulate demand
in order to increase sales."

"Supplement advertising and make personal selling easier."

1.The Critical Role of Sales Promotion Sales promotion serves as a link between advertising
and direct sales. Due to Due to the market's variety, the necessity of sales promotion has risen
dramatically. Sales Promotion enables consumers to overcome their displeasure with a
specific product and manufacturer. It helps to establish a brand image in the minds of buyers
and users. Sales At the moment of purchase, promotional gadgets are the only promotional
devices accessible. The At the point of purchase, sales promotional gadgets encourage clients
to make a buy. immediately and on the spot. The following summarizes the significance of
sales marketing in corporate organizations: Distributes information:
The primary purpose of sales promotion is to disseminate critical information about the A
product's availability, qualities, and applications. Disseminating information regarding the
product enables simple marketing efforts. It is critical to supply information. on the product's
marketability. Increases demand: Sales marketing contributes to the market's desire for the
goods. Sales Promotional activities are intended to pique people's interest in new items and
urge them to purchase them. Purchase them. Satisfaction of customers: Sales promotion
contributes to consumer satisfaction. In promoting sales activity, the new product is now
available. The buyer desires a novel product. If They will be happy with the new product if
they eat it. The market's newest product ensures consumer pleasure. Volume of sales
stabilization: Sales promotion contributes to the volume of sales being stable. It is a critical
objective of sales. marketing to aid in the establishment of sales volume by informing buyers
of the product's quality and the product's price. It is feasible for a client who uses one brand
to purchase another. because another brand is well marketed. Evaluation of performance or
marketing control: Additionally, sales promotion aids in marketing control. Market control is
critical. on the market's performance and state of affairs. Market performance contributes to
the increase in market situation that has been authorized by the client.

2.Areas Covered by Sales Promotion The following diagram illustrates the extent of sales
promotion:
Exposure: The critical purpose is to expose a sufficiently enough number of target customers
to it. Managers must select promotional media that will effectively reach a sufficient number
of target audiences. When preparing for exposure, marketers should follow the following
steps: I Identify your intended audience.

ii) Ascertain their numerical values.

iii) Decide on the promotional mediums.

iv) Calculate the promotional expenditure required to obtain the desired number of exposures.

Attention:
The phrase "attention" refers to the mental condition of being focused on something.
Marketers are required to take measures to differentiate their campaign and make it more
appealing. Consumer focus. Comprehend / Comprehend: To comprehend or to receive
knowledge that has been presented. When the purpose is attained Consumers understand the
message in the way that the advertiser intended. Consumers frequently fall short of when
promotional communications are poorly prepared or just unable to stimulate interest.

Attitude Modification:

It entails a willingness to respond in a specific manner. When a communication contains a

promise of a reward, it will alter the customer's perception. As an illustration, consider a
powerful cleaning powder or a detergent. will improve the likelihood of behavioral change.
Action / Behavior: Including activity or action is particularly critical when it comes to
personal selling and sales. Promotion. Numerous managers advise clients to: I Make your
first purchase of the brand
ii) Continue purchasing the brand
iv) Increase your brand purchases
iv) Persuade friends to purchase the brand
v) Pay a visit to a shopping establishment
vi) Witness a brand demonstration
vii)Experience the brand

3. The Importance of Sales Promotion and Its Objectives

The primary goal of sales promotion is to alter the pattern of demand for products and
services in order to increase sales. Sales promotion, in its most basic form, has three distinct
goals. First and foremost, it is intended to deliver critical marketing information to
prospective purchasers.
The second goal is to persuade and influence potential buyers through the use of persuasive
tactics. Third, sales promotion is intended to be a formidable instrument in the fight against
competitors. The following are the specific aims of sales promotion in terms of results:
New product or service introductions are frequently aided by sales promotion, which
encourages prospective customers to experiment with new items and services. As a result,
dealers are compelled to provide innovative items and services to the market. For the most
part, complimentary samples are made available through dealers at such introductions.
Additionally, discounts in cash or goods may be granted to dealers in order to encourage
them to stock new items or to engage in new services. Free samples, trade discounts, and cash
discounts are all examples of sales marketing strategies.
In order to attract new clients, you should:
Sales promotion methods are also critical in attracting new clients to a company's product or
service. Most of the time, new consumers are people who have been lured away from
competing businesses. Customers are encouraged to try a new brand or change their business
to a new dealer through the use of samples, gifts, and other incentives.
In order to encourage existing consumers to make more purchases:
Sales promotion devices are most commonly used to encourage existing clients of a company
to make more purchases. Product development, selling three items for the price of two, and
discount coupons are just a few of the sales promotion strategies employed by businesses to
encourage existing customers to purchase more of a certain product.
Contributes to the firm's ability to remain competitive:
The majority of businesses engage in sales promotion efforts in order to maintain their
position in a competitive market. As a result, in today's competitive market, no company can
avoid the duty of engaging in sales promotion activities.
In order to enhance sales during the off-seasons:
Many items, such as air-coolers, fans, refrigerators, air-conditioners, cold drinks, room
warmers, and so on, are in high demand during certain seasons. Manufacturers and merchants
that deal in this sort of merchandise make every effort to ensure that demand remains steady
throughout the whole year.
In other words, businesses make an effort to encourage the purchase of such items even
during off-seasons. During slow seasons, this is the primary cause for discounts and off-
season price reductions on such things in the marketplace.
To increase the amount of merchandise available to dealers:
Dealing with a range of commodities is common among dealers such as wholesalers and
retailers. When a manufacturer supplements their efforts with sales promotion tactics, their
selling activity gets easier to complete. A product or service that receives favorable sales
promotion is automatically motivated to have more of the product or service in stock.
with the purpose of increasing customer loyalty
In comparison to repeat purchases, loyalty to a product or service is far more subjective and
personal in character. Even when a firm is experiencing difficulties in terms of pricing,
distribution, and other aspects, customer loyalty keeps the product going.
One type of collectors' promotion is a long-term campaign in which a wide selection of items
branded with the product or service may be collected.
2. Factory visits or exposition booth visits that bring existing and frequent clients into close
touch with the firm's goods or services, as well as with corporate executives.
Increase the number of people who use the service
It is very common to find that a product is widely utilized in one area but is not generally
used in another. Educating customers about the different use of items has the potential to
reverse this tendency. For the advantage of the students, a thorough list of goals is provided.
However, despite the fact that sales promotion has several purposes, there are three that must
be met at all times: informing, convincing, and reminding customers. It is only through good
communication that these goals may be met.
Informing
It is important to inform consumers about a product, its characteristics, and how to utilize it
properly. A limited number of free samples may be delivered to influential consumers who
may serve as a source of advertising for other prospective customers.
Persuading
Consumers are persuaded to buy things by salespeople. They help people build or reinforce a
positive set of attitudes, which in turn influences their purchasing decisions and habits. They
provide consumers with comparison information on a variety of items in order to increase the
likelihood that they will purchase the things that they are advertising.
Reminding
Customers' previously good behavior is reinforced by businesses as a result of reminders. It
equips the learner with the necessary information to recall later on. Reminding customers of
their previous happiness will encourage them to stick with the product and discourage them
from switching to a competitor's offering.
4. Consumer Sales Promotion: Sales promotion that is directed at customers is referred to as
'consumer sales promotion.' Its goal is to entice people to purchase more products. Samples,
discounts, demonstrations, sweepstakes, cash return offers, premiums, and other consumer
promotion methods are the most common.
Consumer Sales Promotion Tools are available in a variety of forms.
Samples
In the world of sales marketing, samples are one of the most effective instruments. Samples
are described as offers to customers of a limited amount of a product in exchange for their
participation in a trial Programme. In order to pique consumers' interest in the goods, free
samples are provided to them. Consumers can verify the quality of a product by obtaining
samples from the manufacturer.
Consumers' homes are visited by representatives who deliver samples. Also available for
delivery by mail or in-person distribution at the retail location. There are situations when
sample products are bundled with another item.
The practice of sampling is successful, but it is quite expensive to produce a large number of
samples of a product. Aside from that, providing samples to consumers incurs additional
costs.
When it comes to a well-established product or a product that is not significantly superior in
some manner to rival items, sampling is not warranted.
a product having a low turnover rate, a product with a small profit margin, or a product that is
very delicate, perishable, or bulky
1. Sending out letters to a select number of frequent clients, inviting them to a product
demonstration and launch.

Coupons
A coupon is a voucher that entitles purchasers to a discount when they purchase a
certain product from the seller. Coupons are typically included with the purchase of a
goods. You may use them either to save money on certain products or to get money
back in your bank account.
Coupons are intended to introduce a new product to the public.
the purpose of promoting the sale of a well-known product
to provide a thing in vast quantities for sale
to persuade customers to switch brands; and to encourage customers to make
recurrent purchases.
Coupons are utilised for consumer convenience items such as snacks and beverages.
They can be distributed door to door, through the mail, or incorporated inside parcels
of various sizes. Coupons may be included in magazine or newspaper adverts from
time to time.
Demonstration / Presentation of a concept
The need for demonstration is necessary when the product is sophisticated and of a
technological nature.
Customers are instructed on how to utilise the product in the most effective manner.
Customers are more likely to purchase things if they are demonstrated to them.
Demonstrations are offered at no cost to attendees.
Contests
Contests are promotional events that provide people the opportunity to win something
of value, such as cash, vacations, or merchandise. Competitions are held in order to
attract new clients. As part of the introduction of a new product, they ask prospects to
describe their motivations for purchasing the product.
Buyer purchases merchandise and sends proof of purchase together with entry form to
be entered in contest. Buyers complete all required fields on entry forms. The best is
chosen by a team of judges, and the consumers who purchase them are awarded
rewards.
Offer of a cash refund
Cash refund offers are reductions in the price of the goods that are permitted. The
manufacturer makes an offer to reimburse a portion of the purchase price of a product
to consumers who turn in evidence of purchase to the company making the offer.
Furthermore, if the consumer is dissatisfied with the goods, he or she will be entitled
to a refund of the entire purchase price or a portion of it. The promise of a cash refund
is clearly indicated on the package.
Premium Premium refers to things that are given out for free or at a reduced cost as an
inducement to purchase a product. A premium may be included in the product, placed
outside of it, or sent to the recipient through mail. The reusable box itself acts as a
bonus item for the customer.
Premiums are frequently provided for consumer goods such as soap, toothpaste, and
other such items. Premiums are available in a variety of forms, including direct
premiums, reusable container free in mail premiums, self-liquidating premiums,
trading stamps, and so on.
Direct premiums can be found both within and outside of the package. After the
product has been re-used, the reusable container can be re-used again. A free in-mail
premium indicates that a premium item will be provided to the recipient via the mail.
A self-liquidating premium is the extra amount that is supplied at the standard price in
addition to the base price. A trading stamp is a piece of paper that is handed to
customers by the vendor. These can be redeemed at any of the stamp redemption
locations.
'Price reduction' offer
During the slump season, goods are sold at a discount. The reduction of pricing
encourages the selling of products.
Sweepstakes for the general public
Consumers are invited to enter a sweepstakes by submitting their names for
consideration in a drawing. The names of customers are included in a list of contest
winners who received prizes. The winners are chosen from a hat, and they are
awarded rewards.
Allowances for buybacks
Acknowledgements are given to buyers based on the amount of money they have
spent before. This means that purchase allowances are paid for subsequent purchases
based on the number of products purchased in the prior transaction.
Promotional actions directed towards trade partners or channel members such as
distributors, wholesalers, or retailers are referred to as trade promotion. 5.
Promotional activities directed at consumers are referred to as consumer promotion.
Basic to trade promotion is the creation of "push" in the channels so that they may sell
the producers' items with a high level of excitement and motivation. It is done out by
the manufacturers through the provision of different incentives to trade partners in
order to motivate them to contribute to the development of their own brands.
Methods of promoting international trade
The following is a quick description of the trade promotion method:
Dealer premiums: A dealer premium is one of the strategies used to promote a product
or service. Certain rewards are sometimes provided to shops in exchange for their
business. Certain units of the items are provided free of charge to merchants in
exchange for their maintaining huge inventories of goods. Besides dealer premiums,
additional sales promotion activities such as contests and giveaways may also be
implemented.
Advertising material: The marketing of items via advertising also aids in the
promotion of commerce. Many manufacturers of goods give advertising material to
their dealers, such as sign boards, banners, and other materials, which may be seen
largely for Pepsi, Coca-Cola, and other similar products.
Store demonstrations: Store demonstrations are also beneficial in the promotion of
commerce. Sales representatives from the manufacturer do a customised presentation
of their goods for the benefit of dealers and consumers under this programme.
In this case, both dealers and consumers are implicated. Rapid expansion of trading
activity is made possible as a result of this factor.
Special displays: Special displays regarding the items may also aid in the promotion
of trade operations by drawing attention to them. Special displays and exhibits of the
company's products may be staged during trade shows or exhibitions in order to raise
awareness of the items.
Special discounts on items: Special discounts on products assist to promote the
trading system by encouraging people to buy more of them. In order to encourage
retailers to participate in the campaign, a manufacturer may give special discounts on
products purchased by the merchants.
Special discounts boost the profit margin of the dealer, who is so compelled to raise
the number of units sold of the product.
Push money: Push money is also useful in the advertising of a company's products or
services. Dealers may be compensated a specified amount of money in order to
increase the number of sales of the manufacturer's products. When there is fierce
rivalry in the market, a monetary reward is offered to those who successfully promote
the product to purchasers.
6. When to Run Sales Promotions: Sales promotions are a wonderful approach for
your company to incentivise potential clients to make a purchase. You run the danger
of losing more clients than you gain if you opt to invest in a sales campaign without
properly comprehending the factors that influence its effectiveness. This article will
discuss the five important characteristics of a successful sales campaign, as well as
how you may use these factors to alter your company.
When done right, sales promotions have the potential to completely revolutionise a
company. Consider the following example of digital coupons: An online poll
conducted by Mobile Commerce Daily found that over ninety-six percent of mobile
device users will use their smart devices to seek for digital coupons in 2015. Online
coupons also have a redemption rate that is ten times higher than that of conventional
coupons.
Through the use of digital coupons, users may take advantage of discounts and special
offers without having to deal with the overabundance of traditional paper mailers.
Consumers can simply search and redeem offers from hundreds of websites on an as-
needed basis, reducing the need for large 'coupon folders' or wallets and purses loaded
with coupons and other promotional materials. As an example of sales promotions
that create a high return for a small expenditure, digital coupons are a wonderful
choice. By 2016, 44.5 percent of firms are predicted to invest in digital coupons for
marketing objectives.
Marketing Constraints
Sales marketing strategies that make use of digital coupons are typically considered to
be successful for a variety of reasons. As described by the American Marketing
Association, a sales promotion is "marketing pressure exerted for a predefined, short
length of time using media and non-media to stimulate trial, boost customer demand,
or enhance product quality." While this description encompasses the basic features of
sales promotion, the reality is that sales promotion encompasses all of these specifics
and much more.
 Consumers who provide evidence of purchase to the manufacturer are referred to as
proof of purchase consumers.
A self-liquidating premium is the extra amount that is supplied at the standard price in
addition to the base price. A trading stamp is a piece of paper that is handed to customers by
the vendor. These can be redeemed at any of the stamp redemption locations.
'Price reduction' offer
During the slump season, goods are sold at a discount. The reduction of pricing encourages
the selling of products.
Sweepstakes for the general public
Consumers are invited to enter a sweepstakes by submitting their names for consideration in a
drawing. The names of customers are included in a list of contest winners who received
prizes. The winners are chosen from a hat, and they are awarded rewards.
Allowances for buybacks
Acknowledgements are given to buyers based on the amount of money they have spent
before. This means that purchase allowances are paid for subsequent purchases based on the
number of products purchased in the prior transaction.
5. Promotion through channels / trade promotion:
Trade promotion is defined as promotional efforts that are directed towards trade partners or
channel members, such as distributors, wholesalers, or retailers, and that are intended to
increase sales. Basic to trade promotion is the creation of "push" in the channels so that they
may sell the producers' items with a high level of excitement and motivation. It is done out by
the manufacturers through the provision of different incentives to trade partners in order to
motivate them to contribute to the development of their own brands.
Methods of promoting international trade
The following is a quick description of the trade promotion method:
Dealer commissions:
Dealer premiums are one of the ways of trade promotion that are available. Certain rewards
are sometimes provided to shops in exchange for their business. Certain units of the items are
provided free of charge to merchants in exchange for their maintaining huge inventories of
goods. Besides dealer premiums, additional sales promotion activities such as contests and
giveaways may also be implemented.
Material for advertising purposes:
The advertising of items also contributes to the growth of the commerce industry. Many
manufacturers of goods give advertising material to their dealers, such as sign boards,
banners, and other materials, which may be seen largely for Pepsi, Coca-Cola, and other
similar products.
Store demonstrations: Store demonstrations are also beneficial in the promotion of
commerce. Sales representatives from the manufacturer do a customized presentation of their
goods for the benefit of dealers and consumers under this Programme.
In this case, both dealers and consumers are implicated. Rapid expansion of trading activity is
made possible as a result of this factor.
Special displays: Special displays regarding the items may also aid in the promotion of trade
operations by drawing attention to them. Special displays and demonstrations of the
company's products are displayed during trade shows or exhibits. Special discounts on items:
Special discounts on products assist to promote the trading system by encouraging people to
buy more of them. In order to encourage retailers to participate in the campaign, a
manufacturer may give special discounts on products purchased by the merchants.
Special discounts boost the profit margin of the dealer, who is so compelled to raise the
number of units sold of the product.
Push money: Push money is also useful in the advertising of a company's products or
services. Dealers may be compensated a specified amount of money in order to increase the
number of sales of the manufacturer's products. When there is fierce rivalry in the market, a
monetary reward is offered to those who successfully promote the product to purchasers.

6. When to Run Sales Promotions: Sales promotions are a wonderful approach for your
company to incentivize potential clients to make a purchase. You run the danger of losing
more clients than you gain if you opt to invest in a sales campaign without properly
comprehending the factors that influence its effectiveness. This article will discuss the five
important characteristics of a successful sales campaign, as well as how you may use these
factors to alter your company.
When done right, sales promotions have the potential to completely revolutionize a company.
Consider the following example of digital coupons: An online poll conducted by Mobile
Commerce Daily found that over ninety-six percent of mobile device users will use their
smart devices to seek for digital coupons in 2015. Online coupons also have a redemption
rate that is ten times higher than that of conventional coupons.
Through the use of digital coupons, users may take advantage of discounts and special offers
without having to deal with the overabundance of traditional paper mailers. Consumers can
simply search and redeem offers from hundreds of websites on an as-needed basis, reducing
the need for large 'coupon folders' or wallets and purses loaded with coupons and other
promotional materials. As an example of sales promotions that create a high return for a small
expenditure, digital coupons are a wonderful choice. By 2016, 44.5 percent of firms are
predicted to invest in digital coupons for marketing objectives.
Marketing Constraints
Sales marketing strategies that make use of digital coupons are typically considered to be
successful for a variety of reasons. As described by the American Marketing Association, a
sales promotion is "marketing pressure exerted for a predefined, short length of time using
media and non-media to stimulate trial, boost customer demand, or enhance product quality."
While this description encompasses the basic aspects of sales promotion, the reality is that
sales promotion is all about offering incentives to customers. Sales promotion, in its most
basic form, provides potential consumers with an additional incentive (or reasons) to consider
doing business with you and your organization.
The idea behind this is that if customers are willing to take that first step of faith and try your
product—whether through limited trial periods, discounts, special offers, free shipping,
branded gifts, loyalty programmers, or the aforementioned digital coupons—they will be
satisfied enough with the results to be willing to invest even more money in the future. Sales
promotions enable businesses of different shapes and sizes to get their foot in the door, with
the common objective of increasing both short- and long-term sales statistics in the process.
What is it that makes sales promotions successful?
Having said that, not every sales promotion is a success. There are a variety of reasons why
certain marketing campaigns fail to pique the interest of prospective customers. The failure of
a campaign can sometimes be linked to a poor product or service, but more often than not the
campaign itself is to blame for the failure. Your sales promotion plan should comprise the
following five components in order to successfully persuade clients to conduct business with
your organization: 1.
A Targeted Audience is someone who has been identified.
Customer loyalty may result in spending upwards of ten times the amount of money spent by
normal consumers over the course of a lifetime. It is always tough to find individuals who
will eventually become brand supporters, which is why marketing campaigns are so difficult
to execute. The majority of marketers feel that, by casting a wide enough net, they would be
able to discover such folks just by using percentages as a guiding principle.
Indeed, if sufficient prospects are engaged, a proportion of those prospects will almost
certainly go through the sales funnel and become paying customers, with a lesser proportion
of those paying customers becoming loyal customers.
The problem with this way of thinking is that it is incredibly inefficient, with only a small
proportion of prospects and leads "paying off" enough to offset the original investment in the
business. Businesses may make better use of their limited marketing resources if they know
who they're marketing to in advance of time. Businesses may use this technique to target
people who are most likely to become loyal clients while avoiding spending resources on
those who will not become loyal.
A similar statement may be made about sales promotion campaigns. In order to choose the
most appropriate target audience for your campaign, you must first have a better
understanding of the clients you currently have on hand. Customer demographic data may be
collected with a simple survey or questionnaire (or by having one incorporated directly into
your website). In order to persuade clients to take the time to provide personal information,
provide them with an incentive up front.
Once you have a better understanding of the types of individuals who will be using your
product or service, you can narrow down the types of problems that your product or service is
intended to answer. With these two considerations in mind, you should direct your sales
promotion efforts on individuals who are most likely to be truly interested in your product or
service.
Measurable Objectives
There is no doubting the significance of creating objectives for oneself. Those who set and
documented explicit goals, according to research conducted by the Harvard MBA school,
earned on average ten times more than those who did not set and record clear goals. When
creating a sales promotion campaign, your objectives must be more precise than just "raising
revenue."
So, what is your plan of action? Consider what the most essential goal of your promotion
should be, and then write it down. Are you attempting to attract new clients, or are you more
concerned about maintaining existing customers? You could be interested in increasing the
frequency with which your consumers make purchases, or you might be interested in
increasing the average amount they spend on each purchase. Are you aiming to improve the
amount of business that your firm receives during slower seasons or periods of economic
uncertainty?

5.4 IMPACT OF SALES PROMOTION IN COMPETATIVE MARKETING

Publicizing certain things through web adverts, seasonal catalogues, sales flyers, magazines,
and/or other print media, whether or not the item is discounted.
Providing targeted clients with special price discounts for a short period of time is another
option.
Promotion of specific targeted products to specific targeted consumers for a predetermined
duration, with or without discounting the item. Providing discounted price on a specific
targeted item for a specific targeted client for a short timeframe.
 The efficacy of these efforts can be difficult to assess, particularly if your system is unable to
identify which promotion the item was purchased under at the time of purchase.
Any small or middle-market firm can benefit from the following five techniques: 1.
Consider the following: 1. Compare the sales and gross margins of the advertised item or
client before the promotional period, during the promotional period, and after the promotional
period. The most accurate approach to achieve this is to determine the average number of
sales each day for each of the time periods under consideration. Did you see an increase in
your average daily sales throughout the promotional period? Are sales per day previous to the
promotional period and sales per day following the promotional period comparable? Does it
appear that the campaign just dragged in future sales that would have otherwise been
obtained at regular margins as a result of the promotional period?
Or did the promotion result in a genuine "lift" in sales and profit margins?
2. Contrast the total average order size and the number of lines per order during promotional
periods with the same metrics during non-promotional periods to see which is superior. Did
the campaign result in an increase in your average order size or an increase in the number of
lines per order? These metrics should be compared to the ones you used in your 3. Compare
the total sales per day of all goods during promotional times (including the items that were
not advertised) to the total sales per day of all items during non-promotional periods. Does it
seem as though your overall sales were affected by the promotions, perhaps as a result of the
additional buzz that the promotional activity generated in the marketplace? (Keep in mind to
take seasonality into account if relevant.)
In step four, you'll compare the outcomes of the numerous promotions against one another.
Rank the campaigns that resulted in the greatest increase in sales and gross profit for your
firm. Compare this year's results to those from previous years to see whether the trends are
positive or whether some promotional initiatives are becoming stale. Promotions that are
becoming less successful should be pulled or redesigned.
5 Whenever feasible, compare the increased gross margins achieved by each promotion to the
underlying additional cost of each promotion in order to calculate the overall net profit
generated by each Programme. Was there a net beneficial impact on earnings as a result of
the promotion?
The evaluations listed above are straightforward, yet they are highly useful indicators of the
efficiency of your advertising actions. Many small and medium market organizations, on the
other hand, do not conduct such analyses because of the time-consuming effort required to
gather and assemble the data. Today's business intelligence solutions can make the
underlying data required to perform such an evaluation more readily available to those who
are doing it. In Grand Metrics BI, for example, these evaluations have been pre-built and are
ready to use, making the entire procedure as simple as a single click of the mouse.
Consider evaluating the success of your company's sales promotion efforts – you might be
surprised by the results! The regular fine-tuning of such actions will almost certainly increase
the profitability of your firm.
8.Development of a Sales Promotion Budget:
The allocation of monetary resources to sales promotion is dictated by the promotional
strategy used by the company in question.
In the majority of situations, first the overall amount of money to be spent on promotion is
established, and then the amount of money to be allocated for various activities. Before
selecting how much money should be spent on sales promotion, management should consider
a variety of important elements, including the type of product, its stage in the PLC, the
market environment, the amount of competition activity, and so on. All of these elements,
used alone or in combination, have the potential to have a considerable impact on the
promotional expenditure. In order to distribute cash for sales promotion, there are five main
approaches that are usually employed.
The percentage of sales made using a particular method
The approach of allocating funding based on a proportion of sales is arguably the most often
used by businesses. In this strategy, the budget is calculated by taking a fixed percentage of
sales and dividing it by the number of employees. The sales figure used might be from the
previous year or it could be an average of several prior years' worth of sales. It is also
possible that this proportion is dependent on the anticipated sales for the year under
consideration.
Method of calculating the unit of sale
This strategy is widely utilized by organizations that deal in high-priced products, mainly
consumer durable goods such as automobile makers, refrigerators, washing machines,
microwave ovens, entertainment gadgets, and many more items accessible in the sector. Do
they have a favorable comparison? Instead of the rupee worth of sales, as was the case with
the prior technique, the physical volume of either past or predicted sales is used as the
foundation. Following that, the number of units is multiplied by a predetermined amount of
money to arrive at the budget amount. In the case of sales promotion, the manufacturer could
set out Rs. 2000/- per unit as a budgetary allocation.
The competitive parity approach is a type of competitive parity.
Many marketers match or base their sales promotion budget on the budgets of their biggest
rivals, which is a common practice. According to the rationale attributed to this strategy, the
collective brains of the firms in the industry most likely create promotion budgets that are
near to ideal, and any deviation from industry standards may result in a promotion war
amongst the companies involved.
Method based on what you can afford
When utilising this technique to budget allocation, the amount that remains after all other
appropriate allocations have been made is set aside for sales promotion activities. When
releasing a new product, this strategy is typically adopted by small businesses or by other
businesses of various sizes. It is essentially a budget that is based on availability and is
therefore extremely basic. There appears to be little recognition of the fact that, in a
competitive market environment, sales marketing is critical to mainframe sales in a variety of
ways.
The goal and the technique of accomplishing the objective
As previously said, the entire promotional strategy determines the amount of money that will
be spent on promotions. The technique that is driven by strategy is known as the objective
end task method approach. This is also the most often used approach for determining the
budget for sales marketing. The promotion manager begins by doing an in-depth analysis of
the market, the product, the competition, and consumer behavior in order to establish
acceptable promotion objectives for the organization. These objectives may be related to
raising short-term sales, launching a new product, stimulating trial, improving distribution,
and so on, all within a set time frame. The following step is to calculate the amount of money
that would be required to complete each work involved in reaching the desired results. If the
expenditures exceed the funds available, either the marketing objectives must be changed or
extra funds must be made available from the contingency reserve or by cutting the budgets of
other promotional activities to cover the difference.

5.5 SUMMARY

 What is Competitive advertising and how it effects the organisation internally as well as
externally.
 While comparative advertising has several good effects on both consumers and
companies, advertisers should consider certain negative consequences while
undertaking comparison campaigns.
 The efficacy of these efforts can be difficult to assess, particularly if your system is
unable to identify which promotion the item was purchased under at the time of
purchase.
 The 'where are we now' situation analysis or audit is a method for a corporation to
determine its own strengths and weaknesses in relation to external opportunities and
dangers. As a result, it is a method of assisting management in choosing a position in
that environment based on existing facts.
 Consumer Sales Promotion: Sales promotion that is directed at customers is referred
to as 'consumer sales promotion.' Its goal is to entice people to purchase more
products. Samples, discounts, demonstrations, sweepstakes, cash return offers,
premiums, and other consumer promotion methods are the most common.
5.6 KEYWORDS

 Stabilization - Stabilizing is causing something to become stable. If your presence

is stabilizing, or even settling, to a person, you are probably a good influence on
them.

 Demonstrations – the act of showing someone how to do something, or how

something works.

 Competitive - Competition is something that people who are competitive like doing
– finding out who knows the most, who runs the quickest, who can eat the hottest
dogs, and so on. Some people are fiercely competitive in all aspects of their lives.
You'll recognize them by their continual comparisons with others and their attempts
to learn about what others have and accomplish - all in the name of ensuring that they
remain "ahead of the game." Competitive can be used to describe any type of contest,
such as a competitive sandcastle-building competition.

 Programme - Program is a British English spelling variant of program; both refer to

an outline in a prescribed order or an agenda, such as a program at a theater. Since
the 20th century program has also referred to computer code, and in this case both the
British and American spellings are the same.

 Influence - the capacity to have an effect on the character, development, or behavior

of someone or something, or the effect itself.

5.7 LEARNING ACTIVITY

3. Define internal situation analysis

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4. Explain sales promotion

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5.8 UNIT END QUESTIONS

A. Descriptive Questions

Short Questions:

6. Be aware of what the purpose of comparison advertising is?

7. Understand why comparative advertising might be a dangerous strategy?
8. Recognize the power of the Federal Trade Commission in regard to advertising?
9. What is sales promotion?
10. Impact of sales promotion in competitive market

Long Questions:

8. the line of action that can be done in the case that a product makes misleading
representations about itself

9. How the phrase 'honesty is the best policy' applies to comparative advertising
10. Give The best explanation of comparative advertising
11. Objectives of sales promotion.
12. Competitive market and sales promotion.

B. Multiple Choice Questions

11. What is the best explanation of comparative advertising?

11.1 Comparing different products in your product line to help consumers make the
best decision
11.2 Consumer advocacy groups comparing products and publishing the results.
11.3 A company either directly or indirectly comparing its product against one or
more competing products.
11.4 There is no such advertising because it's illegal

12. which of the following statement is true about comparative advertisement

a. Comparative advertising is highly effective in Arabic countries.
b.? The FCC is the only federal agency that has any regulatory power over
comparative advertising.
c. Comparative advertising is often used for products experiencing strong growth.
d. Comparative advertising is regulated by the FTC in the United States.
 13. Violations that ethical advertisers strive to avoid comprise which of the following?

13.1 Testimonial from under knowledge people.

13.2 False statement
13.3 Misleading and exaggerated claims
13.4 Avoiding the message
14. 46................ suggest to the consumer that he or she can avoid some negative
experience through the purchase and use of a product or through a change in
behaviour.
a) Responsibility appeal
b) Fear appeals
c) Sex appeals
d) Family appeals

5.The sales promotion strategy which concentrates on the middlemen and consumers is
known as______________

a) Pull Strategy

b) Combination strategy

c) Sale force Strategy

d) Push Strategy

Answers

1-c, 2-d, 3-c, 4-b, 5-b

5.9 REFERENCES

References book

 Cravens, D.W. Strategic Marketing, Homewood Illinois, Richard D. Irwin, 1987.

 Kayak, E and Slavitt, R. Comparative Marketing Systems, New York, Praeger,
1984.
 Kotler, Philip. Marketing M a n a g e m e n t : Analysis, P l a n n i n g ,
I m p l e m e n t a t i o n a n d C o n t r o l , New Delhi, Prentice Hall of India, 1997.
 Porter, M . E . Competitive a d v a n t a g e : Creating, S u s t a i n i n g , S u p e r i o r
P er fo rm an ce , N e w
  York, Free Press, 1985.

o 5. Porter, M.E. Competitive S t r a t e g y : Techniques f o r A n a l y s i n g

I n d u s t r i e s C o m p e t i t o r s , New York, Free Press, 1980
Textbook references
 Advertising Management – concepts and cases Mahendran Mohan.
 Marketing Management – Philip Kotler
 Branding – Geoffrey Randol
 Strategic Brand Management – Caperer
 Advertising and Sales Promotion Management – Salutat, V.V.Ratra
 Principles and Practice of Marketing – C.B. Memoria and R.L.Joshi
 Advertising and Salesmanship – P.Saravanavel.H.J. Bernardin, Human Resource
Management, Tata McGraw Hill, New Delhi, 2004.

Website
 https://www.quora.com/What-is-the-most-useful-promotional-tool-in-marketing-
publicity-sales-promotion-advertising-or-all-of-the-above
 https://www.vocabulary.com/dictionary/competitive
 https://www.sarpublisher.com/advertising-mcq-questions-and-answers-part-3/