COMPETITIVE STRATEGIES

COMPETITIVE STRATEGIES

How to Manage Brands?

1. Market position & Role of Competition

2. PLC

Market position can be;

A. Market Leader
B. Market Challenger
C. Market Follower
D. Market Nicher
COMPETITIVE STRATEGIES

A. What should Leaders do?

1. Expand the Total Market Demand

2. Protect its Current MS
3. Increase its MS
COMPETITIVE STRATEGIES

A. What should Leaders do?

1. EXPAND THE TOTAL MARKET DEMAND

(a) Get New Customers

• Who can use but do not use: Market Penetration Strategy (Comfit)
• Who have never used: New Segment Strategy
• Who lives elsewhere: Expansion Strategy (Increase footprint)
(eg. Fair & Lovely, Perfumes, Baby Shampoo)

(b) Find Avenues for More Usage

Increase amount of usage: Packaging or Product redesigning

(eg. Maggi Noodles, Parle-G)
Increase Frequency of Usage: Additional opportunity/Occasion to use or
New way to use
(eg. Cereals, Tooth paste, Nylon, Teflon, Asian Paints, Gillette Cartridges,
Condensed milk, Cadbury, Good Night)
COMPETITIVE STRATEGIES

A. What should Leaders do?

2. PROTECT IT’S CURRENT MS

(a) Proactive Marketing

Continuous innovation in products, services, process efficiency, cost saving

(ITC, Marico, HUL, NESTLE)

Market driven v/s Market driving: Responsive v/s Anticipative v/s Creative
(Sony, Nokia, Apple, Google, GoPro)

Risk averse v/s Risk taking

 COMPETITIVE STRATEGIES

A. What should Leaders do?

2. PROTECT IT’S CURRENT MS

(b) Defensive Marketing

(i) Position Defense: occupying the most desirable market space in consumers
mind
(eg. Maruti, TCS, Marico, Taj, Nescafe, Maggi Noodles, Amul, Google,
Mercedes Benz)

(ii) Flanking Defense: setting outposts to protect a weak front or handle a counter
attack
(eg. Wheel, Tide, Cadbury, Big Bazar, Shoppers Stop, Mercedes Benz )

(iii) Pre-emptive Defense: attack first through guerrilla action or announce

introduction of an array of new products in advance
(eg. Sony, Asian Paints, Titan watches)
 COMPETITIVE STRATEGIES

A. What should Leaders do?

2. PROTECT IT’S CURRENT MS

(b) Defensive Marketing

(iv) Counter Offensive Defense: meet the attacker frontally through price cuts,
promotional blitzkrieg, product upgrades, economic or political clout
(eg. Ariel, Surf, Lay Chips, Airtel, LG, Fogg, Audi, ITC, Amul, Reliance)

(v) Mobile Defense: thro’ Market Broadening & Market Diversification

(eg. Mercedes, Reliance, ITC, Tata, UB Group)

(vi) Contraction Defense: thro’ strategic withdrawal when capability is low and
competition is high
(Coca Cola withdrew from India in the 70’s, Tanishq in Kerala, Tata Motors in
passenger vehicle segment?, Tata Selling its soaps & detergents to HUL,
Maruti 800 pull out, Rationalizing Hero CD 100 )
COMPETITIVE STRATEGIES

A. What should Leaders do?

3. INCREASE MS

Focus
Perseverance

Pitfalls;

Invite attention from legal / regulatory body

Diminishing profitability: saturation
Obsessed in wrong marketing activities (4Ps)
Erosion of product value and services: customer dissatisfaction
COMPETITIVE STRATEGIES

B. What should Market Challenger do?

1. Whom to Attack and with what Strategic Objectives

2. Choosing an Attack Strategy to deliver the Strategic Objectives

 COMPETITIVE STRATEGIES

B. What should Market Challenger do?

1. Whom to Attack and with what Strategic Objectives

(a) Attack the Market Leader to gain Market Leadership or move ahead of
other challengers (eg. Itchguard, Nirma, Ujala, Fogg, Micromax)

(b) Attack firms its own size to gain MS (Toyota-Honda, BMW-AUDI, Britannia-ITC)

(c) Attack smaller firms garner MS (Kalyan Gold v/s traditional jewelers)
COMPETITIVE STRATEGIES

B. What should Market Challenger do?

2. Choosing an Attack Strategy to deliver the Strategic Objectives

(i) Frontal Attack: Attacker matches its opponent’s 4Ps

(eg. HT v/s TOI, Pepsi v/s Coke, P&G v/s HUL, Maruti v/s Hyudai)

(ii) Flank Attack: Finding gaps and filling it: Segmental or Geographic
(eg. Xerox-Cannon, Toyota-GM, Apple-Micromax, HP-Dell, Titan-HMT)

(iii) Encirclement Attack: Launching offensive on many fronts

(eg. Yahoo-Google, Boutiques-Branded apparels, Seiko’s over 2000 models,
Amazon-Netflix, Android-iOS)
 COMPETITIVE STRATEGIES

B. What should Market Challenger do?

2. Choosing an Attack Strategy to deliver the Strategic Objectives

(iv) Bypass Attack: by passing the opponent thro’ diversifying into

unrelated products, new geographical areas or new breakthrough technology
(eg. Pepsi taking over Tropicana or bringing in Aquafina or getting Fritolay,
Google)

(v) Guerrilla Attack: intermittent, limited and selective attacks (small local Cos.)
(eg. Mysore sandal, Gharri Soap, Balaji Chips, Haldiram)
COMPETITIVE STRATEGIES

C. What should Market Follower do?

(i) Counterfeiter: Duplicates the leader’s product (routes thro’ black market)
(eg. Books, CDs, Softwares, Computer chips, Rado watches, Apple phones)

(ii) Cloner: Similar to the leader’s product in branding, look, packaging with
minor variations.
(eg. Parel-G, Glukon-D, Raxona, Luxe Delux, Indya Cements, Ujwala)

(iii) Imitator: Copies the leader’s product but makes differentiation in the 4Ps
(eg. Mamamia pizzas, MNC v/s India pharma Cos, MaskaChaska-50:50)

(iv) Adapter: Adapts or improves on the leader’s product

(eg. NDDS, Japanese electronics & Autos, Technology adoption)
COMPETITIVE STRATEGIES

C. What should Market Nichers do?

Philosophy of being a leader in a small market than a follower in a big market

Provides high value

Skimming pricing
Good insights into target customer’s needs and wants
Low volumes
Low manufacturing cost
R&D, Innovation and New Product launches

Multiple niching is needed for survival

Strategy for established market

Short PLC

(eg. Fashion, Genzyme, Luxury goods)

COMPETITIVE STRATEGIES

IN SUMMARY

The attack can comprise of;

Price or Discounts
New products or Improved products & services
Wider variety of offerings
Innovative promotions
Efficient channel management
Breakthrough technology
Efficiency or scale in manufacturing
Entry into newer geographical areas
Strength in R&D
Dynamic innovation
PRODUCT LIFE CYCLE (PLC)
PRODUCT LIFE CYCLE (PLC)

Pattern
Introduction Growth Maturity Decline
Sales Low Rapidly rising Peak Dropping
Expn. to Sales High Average Low Low
Profits -Ve Rising High Reducing
Competition Few More entry Stable- start of Less players
reduction in no.
Customers Few- Increasing- Stable- Reducing-
Innovators Early Adopters / Late Majority Laggards
Early Majority
PRODUCT LIFE CYCLE (PLC)

Marketing Objectives
Introduction Growth Maturity Decline
Create Awareness, Invest and Maximize Maximize Profit and Reducing Expn. and
Trial & Availability MS Defend MS Harvest or Divest

4P Strategies
Introduction Growth Maturity Decline
Product Basic Extension & Diversify brand Phase out weak
Services and product products
Price Skimming Penetrative/ Match Cut
Competitive competitors
Distribution Selective Intensive Intensive and Selective
Extensive/Wide
Promotion Awareness & Awareness and Emphasis on Minimal and
Trial among interest in the brand difference Selective to
early adopters mass market & benefits and retain loyalists
& dealers go for switching
PRODUCT LIFE CYCLE (PLC)

CONSUMER BEHAVIOUR (Types)

Early Early Late

Innovators Adopters Majority Majority Laggards
2.5% 13.5% 34% 34% 16%

Percentage of Adopters by Category Sequence