11

Dealing with Competition

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?

2
Five Forces Determining Segment
Structural Attractiveness

3
Identifying Competitors

Competitor Myopia

4
Industry Concept of Competition

 Number of sellers and degree of differentiation

 Entry, mobility, and exit barriers
 Cost structure
 Degree of vertical integration
 Degree of globalization

5
Number of sellers and degree of
differentiation

Pure
Pure Monopoly
Monopoly

Oligopoly
Oligopoly

Monopolistic
Monopolistic Competition
Competition

Pure
Pure Competition
Competition

6
 • Market Concept of Competition

Competitor Map

7
Analyzing Competitors

 Strategies
 Objectives
 Strengths and Weaknesses

8
Customer Ratings of Competitors on Key
Success Factors

Customer Product Product Technical Selling

Awareness Quality Availability Assistance Staff
Competitor A E E P P G
Competitor B G G E G E
Competitor C F P G F F

Note : E - Excellent; G - Good; F – Fair; P - Poor

9
Considering Variables in Analyzing Competitors

Share of market

Share of mind

Share of heart
10
Market Share, Mind Share, and Heart Share

11
Selecting Competitors

 Strong versus Weak

 Close versus Distant
 Good versus Bad

12
Hypothetical Market Structure

10% 20% 30% 40%

Market Market Market Market
Nichers Follower Challenger Leader

13
Expanding the Total Market by
Market Leader

New customers

More usage

14
Six Types of Defense Strategies

15
Other Competitive Strategies

Market
Challengers

Market Market
Followers Nichers

16
 Market Challenger Strategies

 Define the strategic objective and opponents

 Choose a general attack strategy
 Choose a specific attack strategy

17
General Attack Strategies

Frontal Attack Flank Attack

Encirclement
Bypass Attack
Attack

Guerrilla Warfare
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 Specific Attack Strategies

 Price discounts  Product innovation

 Lower-priced goods  Improved services
 Value-priced goods  Distribution innovation
 Prestige goods  Manufacturing-cost
 Product proliferation reduction
 Intensive advertising
promotion

19
Market Follower Strategies

Counterfeiter

Cloner

Imitator

Adapter

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