management chee marketing Marketing Strategies EXERCISE 1 Read the text, and then decide whether the statements on the next page are TRUE or FALSE. ‘A company’s marketing strategies ~ sets of principles designed to achieve long-term objectives ~ obviously depend on its site and position inthe market, ther determining factor are the extent of the companys resources, the strategies ofits competitors, the behaviour ofthe consumer in the arget market, the sage i the product life-cycle ofthe produc it markets, and the overall macro-economic environment The alm ofa marke leader is obviously co remain th leader. The bestway to achieve this i to increase market share even futher. If his is noe possible, che leader will a least attemp to protec its current market share. A good idea isto ery to find ways to increase the cotal market. This wil benefit everyone inthe field, but the market leader more than its competitors. A market can be increased by finding new users fr a product, by stimulating more usage of a product, or by exploiting new wses, which can sometimes be uncovered by carzying out marker research wich existing customers To protect a market share, 2 compony can innovate in products, customer services, disrburion channel, cost reductions, and so on; ic can extend and stretch ics product lines ro leave less roum for competitors; and it can confront competitors directly in expensive sales promocion campaigns ‘Maret challengers can either attempt to attack the leader, or to increase cheir marker share by attacking various market followers. they chocse to attack che leader, market challengers can use most of the strategies also available to market leaders: product innovation, price reductions, cheaper or higher quality versions, improved services, distubution channel innovations, manufacturing cost reduction, intensive advertising, and s0 on. Market followers are in a difficult position. They ae usualy che favourite earge of marker challengers. They can reduce prices, improve produccs of services, and soon, but the marker leader and challenger will ually beable co retaliate suceesflly. A marker follower chac cakes on a larger company ina price wari eran co lose, given is lesser resources. I many markets, market followers fall in che middle of « Vshaped curve relating marker share and profcailcy. Small companies focusing on specialised narrow segmencs can make big profits. So can the market leader, with a high marker share and economies of scale. In between come the less profitable market followers, which are coo big ro focus on niches, but 100 small co benefic from ‘economies of sale One posit for followers ito imitate che leader products. The innovator has hene the cost of developing the new produc, distributing it, and making the market aware of its existence. The follower can clone this produce (copy s completely), depending on patenes and s on, oF mprove, adap or differentiate x. Whatever happens, fllowes have to keep thee manufacturing cst low and the quality of thei procucts and services high 62masanemens 30). smartening ‘Small companies that do not establish chetr own niche ~ @ segment of a segment — are in a vulnerable postion, If thei product does nor have a “unique telling proposition,” there is no reason for anyone to buy it. Consequently, a good strategy is to concentrate on a niche that is large enough to be profitable and thc is likely to grow, shat dosnt sem to interest the leader, and which the finn can serve efectwely. The niche could be a specialised product, a particular group of end-users, 9 scogrphical region, the tp end of 2 market, and 3.09. OF course unlest a nicher builds up immerse ‘customer goodwill, it is vulnerable to an attack by the market leader or another larger company CConsequentt, multiple niching ~ developing positon in two or more niches ~ is 9 much er seratesy | fa market leader succeeds in increasing the size of “TRUE/FALSE the total market, its competitors benefit 12, The sie of a market can be increased without TRUE/FALSE acracting any new consumers 3. Marker challengers generally aac the leader and marke follower ‘TRUE/FALSE 44. Maker challengers cannot use the same strategies as leaders. “TRUE/PALSE 5. Matket leaders generally win price wars “TRUEJPALSE 6 Market challengers can attack leaders by way of any “TRUEFALSE ofthe four Ps ofthe marketing mix 7. Market followers generally achieve cost reductions TRUEALSE through economies of ale. 8. The most profitable companies are logically those TRUEJFALSE swith mediom or igh marketshare. 9. Fora market nicher, product imitation can be ‘TRUEJFALSE a profitable as product innovation. 10. A markee cher is never safe from an attack by a larger company. ‘TRUEFALSE EXERCISE 2 Eight ofthe following nouns, all found in the text above, also exist unchanged as verbs. Which are they? What are the related verbs from the other ten nouns? aim design leader benefit distribution market challenger extent product clone follower reduction competitor incresse share consumer innovation target EXERCISE 3 Complete the following collocations from the text: Be vcesees sept (para) fe cesses veline (pata 3) 2. determining +--+ (par}) 5. les vor. para3) 5. ditnibution (pa04) 6 scale (par 6) [Now translate the highlighted expressions in the text into your own language. 6B