Phillip Kevin Lane

Kotler • Keller
Marketing Management • 14e
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Competitive
Dynamics
Discussion Questions
1. How can market leaders expand the total market
and defend market share?
2. How should market challengers attack market
leaders?
3. How can market followers or niche compete
effectively?
4. What marketing strategies are appropriate at each
stage of the PLC?
5. How should marketers adjust their strategies and
tactics for an economic downturn or recession?
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 Market Members

Market leader
Market challenger

Market follower
Market nichers

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 .1
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g u r e Hypothetical Market Structure
Fi

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Staying Number One

1. Expand total market demand

2. Protect current market share

3. Increase market share

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Expanding Total Market Demand

New Customers

More Usage

Replacement rate

New product uses

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Protect Current Market Share

Offensive Strategy Defensive Strategy

Proactive Marketing

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 Increase Market Share

Antitrust action

Decreased profitability
Lower overall quality
“Actual” quality
Pursue wrong “Perceived” quality
marketing activity

2012 2013
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 .3
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Fi

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Other Competitive Strategies

Market-challenger

Market-nicher

Market-follower
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Market-Challenger Strategies
Define objectives and opponent(s)

Choose general attack strategy

Choose Specific attack strategy

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 Market-Challenger Strategies
Objectives and Opponents General attack strategies
Frontal attack
Flank attack
Encirclement attack
Bypass attack
Guerrilla attack
Attack:
Market leader
Weaker, similar size firms
Smaller local or regional firms

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Market-Follower Strategies
Counterfeiter Adapter

Imitator
Cloner
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 Market-Nicher Strategies
Nichers Task
Create niches
Expand niches
Protect niches

Target small, profitable segments

Achieve higher margins

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Product Life-Cycle Strategies

• Products have a limited life

• Sales pass through stages

• Profits rise, then fall

• Different strategies needed

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Patterns

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g u Style, Fashion, and Fad Life
Cycles

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Product Life-Cycle Stages

Introduction

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 PLC: Introduction Stage
Slow sales growth, negative profits

Marketing Strategies:
1.Create awareness
2.Induce product trial Speed to Market

3.Secure retail distribution.

Which is more profitable over 5

years?
•6 months late, but on budget?
Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall •On time, but 50% over budget? Slide 23 of 31
 Order of Market Entry
Pioneer Advantage
Inventor
Product pioneer
Market pioneer
First Mover Advantage
• Brand name association
• Define product class
• Customer inertia
• Producer advantages

Imitator Advantage
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g Long-Range Product Market
Expansion Strategy

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 PLC: Growth Stage
Rapid sales growth; New competitors

Marketing Strategies:
1.Improve product quality; add new features
2.Add new models and flanker products
3.Enter new market segments
4.Focus advertising on preferences
5.Increase distribution coverage
6.Lower price; Attract price-sensitive buyers

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 PLC: Maturity Stage
Growth slows; Weak competitors exit

Marketing Objectives:
1.Maximize profit
2.Defend market share

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PLC: Decline Stage
Slow sales growth, negative profits

Product Options:
1.Rejuvenate
2.Harvest
3.Divest

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Characteristics of the PLC
Introduction Growth Maturity Decline
CHARACTERISTICS

Sales Low Rapidly rising Peak Declining

Costs/customer High Average Low Low

Profits Negative Rising High Declining

Customers Innovators Early Adopters Middle majority Laggards

Competitors Few Increasing Stable number Declining

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 1 .2
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T a PLC Objectives and Strategies
Introduction Growth Maturity Decline
MARKETING OBJECTIVES
Awareness Maximize Maximize profits; Milk the
and trial market share Defend share brand
STRATEGIES
Extend; Service, Diversify brands Phase out
Product Basic
warranty and models the weak
Charge cost- Price to
Price Price to match Cut price
plus penetrate
Distribution Selective Intensive More intensive Go selective
Awareness Awareness w/ Stress brand Reduce to
Communications
early adopters mass market benefits minimal

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Marketing in an Economic Downturn

More Compelling Value Proposition

Review Budget Allocations

Get Closer to Customers

Increasing Investments

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