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MARKETING MANAGEMENT 1

11 Dealing with Competition Keep your enemies close to you


Dr.Md.Ridhwanul Haq

Chapter Questions

How do marketers identify primary competitors? How should we analyze competitors strategies, objectives, strengths, and weaknesses? How can market leaders expand the total market and defend market share? How should market challengers attack market leaders? How can market followers or nichers compete effectively?

BHO6505: Marketing Management 1. 2006 Semester 1, by Lachlan.McKerrow@vu.edu.au

Figure 1.1 Five Forces Determining Segment Structural Attractiveness

BHO6505: Marketing Management 1. 2006 Semester 1, by Lachlan.McKerrow@vu.edu.au

Know thyself and I say know


your limitations first
Threat of Intense segment rivalry Threat of new entrants Threat of substitute product Threat of growing bargaining power Threat of suppliers growing bargaining power

BHO6505: Marketing Management 1. 2006 Semester 1, by Lachlan.McKerrow@vu.edu.au

Industry Concept of Competition:

Number of sellers and degree of differentiation (Monopoly to pure competition) Entry, mobility, and exit barriers Cost structure Degree of globalization

BHO6505: Marketing Management 1. 2006 Semester 1, by Lachlan.McKerrow@vu.edu.au

Analysing Competitors
Identifying competitors Analysing competitors: Strategic group Understanding competitors objectives Strength and Weaknesses

Share of market (competitors share of the target market) Share of mind (When customers utter competitors name) Share of heart (When customers want to buy competitors product)

Selecting Competitors
BHO6505: Marketing Management 1. 2006 Semester 1, by Lachlan.McKerrow@vu.edu.au

Dimensions of competitors
Strong VS Week (TV Channels) Close VS Distant (Channel I vs ntv vs ESPN) Good VS Bad (Follow/ not follow industry culture). Anti dumping

strategy. Self sponsoring TV channels)

BHO6505: Marketing Management 1. 2006 Semester 1, by Lachlan.McKerrow@vu.edu.au

Competitive Strategies for Market Leaders (Private schools in Dhaka)

10% 20% Market Market Nichers Follower

30% Market Challenger

40% Market Leader

Figure 11.5 : Hypothetical Market Structure


BHO6505: Marketing Management 1. 2006 Semester 1, by Lachlan.McKerrow@vu.edu.au

Expanding the total market


a) Getting new customers( Market penetration/new market
segment/geographic expansion strategy) b) Increasing more usage (Increasing volume/frequency of product usage) 3 times intake

Defending market Share: So, need


continuous innovation of new offer. (Have your client channels
like SODA??!!)

BHO6505: Marketing Management 1. 2006 Semester 1, by Lachlan.McKerrow@vu.edu.au

Figure 11.6 Six Types of Defense Strategies

BHO6505: Marketing Management 1. 2006 Semester 1, by Lachlan.McKerrow@vu.edu.au

Leaders defending strategies

Position defense: Grab maximum share with current


image (MUM water)

Flank defense: Offering maximum product line so that


competitors face difficulties to enter in to industry. (Square)

Pre emptive defense: Offer unique feature for getting


maximum market share (Halal soap)

Counter offensive defense: With out wasting of time


defend (leader vs leader)

Mobile defense: When leader moves to other domain. Otobi now for Kloset Contraction defense: Strategic withdrawal (Starship vs
danish)

BHO6505: Marketing Management 1. 2006 Semester 1, by Lachlan.McKerrow@vu.edu.au

Other Competitive Strategies


Market challengers Market followers Market nichers

BHO6505: Marketing Management 1. 2006 Semester 1, by Lachlan.McKerrow@vu.edu.au

Market Challenger Strategies


Define the strategic objective and opponents Choose a general attack strategy a) frontal with promotional b) flank: geographic segmentation PRAN for rural market Choose a specific attack strategy

BHO6505: Marketing Management 1. 2006 Semester 1, by Lachlan.McKerrow@vu.edu.au

General Attack Strategies


Frontal Attack Flank Attack

Encirclement Attack (By offering


aggressive promotion)

Bypass Attack
offering new product b4 leader (Pepsi blue)

Guerrilla Warfare
PRAN for Coke in BD
BHO6505: Marketing Management 1. 2006 Semester 1, by Lachlan.McKerrow@vu.edu.au

Pepsi buys Gatorade in a Bypass Strategy

BHO6505: Marketing Management 1. 2006 Semester 1, by Lachlan.McKerrow@vu.edu.au

Specific Attack Strategies


Price discounts (Ibn Sina) Lower-priced goods Value-priced goods Prestige goods

Product innovation Improved services Distribution innovation Manufacturing-cost reduction Intensive advertising promotion

BHO6505: Marketing Management 1. 2006 Semester 1, by Lachlan.McKerrow@vu.edu.au

Samsung Attacks Using Innovation

BHO6505: Marketing Management 1. 2006 Semester 1, by Lachlan.McKerrow@vu.edu.au

Market Follower Strategies


Counterfeiter Cloner

Imitator Adaptor

BHO6505: Marketing Management 1. 2006 Semester 1, by Lachlan.McKerrow@vu.edu.au

Balancing Orientations
Competitor-centered Customer-centered Keeping balance is the job.

BHO6505: Marketing Management 1. 2006 Semester 1, by Lachlan.McKerrow@vu.edu.au

Nicher

Product specialization: Hamdard (Ruh Afza) &


Thank U..

BHO6505: Marketing Management 1. 2006 Semester 1, by Lachlan.McKerrow@vu.edu.au