UNDERSTANDING

COMPETITION AND Session 7

GROWTH STRATEGIES 1
Potential Market: It is the set of consumers with the sufficient level of
interest in a market offer.
Available Market: Set of consumers who have interest, income and
access to a particular offer.
Target Market: Part of available market the company has decided to
pursue.
Penetrated Market: Set of consumers who are actually buying the
product.

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Marketing plan
The central instrument for directing and coordinating the
marketing effort
The marketing plan operates at two levels: strategic and
tactical.
 The strategic marketing plan lays out the target markets and
the firm’s value proposition, based on an analysis of the best
market opportunities.
The tactical marketing plan specifies the marketing tactics,
including product features, promotion, merchandising, pricing,
sales channels, and service.

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Strategic Planning, Implementation, and Control
Processes

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 Corporate and division strategic
planning
1. Defining the corporate mission

2. Establishing strategic business units

3. Assigning resources to each strategic business unit

4. Assessing growth opportunities

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 Establishing Strategic Business Units
A single business or collection of
related businesses, that can be
planned separately.
Has its own set of competitors.
Has a leader responsible for strategic
planning and profitability.

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Assigning Resources to Each SBU
Management must decide how to allocate corporate resources to each SBU

 Portfolio-planning models (BCG, Ansoff and GE)

 Shareholder/market value analysis

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 Assessing Growth Opportunities
Assessing Growth Opportunities Includes Planning New Businesses, Downsizing, And Terminating Older
Businesses.

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ANSOFF MATRIX (PRODUCT MARKET
EXPANSION GRID)

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 Assessing Growth Opportunities
Intensive Growth: The company first considers whether it could gain more market share with its current
products in their current markets, using a market-penetration strategy.
Integrative Growth: A business can increase sales and profits through backward, forward, or horizontal
integration within its industry. (Product Development)
Diversification Growth: Diversification growth makes sense when good opportunities exist outside the
present businesses. The industry is highly attractive and the company has the right mix of business
strengths to succeed
Downsizing and Divesting Older Businesses: Companies must carefully prune, harvest, or divest tired
old businesses to release needed resources for other uses and reduce costs

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BCG MATRIX

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GE MATRIX

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 Growth strategies
• Building your market share • International expansion
• Developing committed customers • Acquisitions, mergers, and alliances
and stakeholders • Building an outstanding reputation for
• Building a powerful brand
social responsibility.
• Innovating new products,
• Partnering with government and NGOs
services, and experiences

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Growing the Core: By DAVID TAYLOR

Make the core of the brand as distinctive

as possible

Drive distribution through both existing

and new channels

Offer the core product in new formats or

versions

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 Competitive Strategiesfor Market Leaders
To be the market leader:
1. Expanding total market demand
2. Protecting market share
3. Increasing market share

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 1. Expanding total market demand
New customers: A company can search for new users among three groups:
a) Those who might use it but do not (market-penetration strategy)
b) Those who have never used it (new-market segment strategy)
c) Those who live elsewhere (geographical-expansion strategy).

More usage: . Marketers can try to increase the amount, level, or frequency of
consumption.
a) Identifying additional opportunities to use the brand in the same basic way
b) Identifying completely new and different ways to use the brand.

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 2. Protecting market share
A) Proactive Marketing

 Responsive Marketing: Find stated need and fill it

 Anticipative Marketing: looks ahead to needs
customer may want in future.
 Creative Marketing discover solutions that customers
never asked for but to which they enthusiastically
responded.

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 3. Increasing market share
The cost of buying higher market share through acquisition may far exceed its revenue value

Possibility of provoking
Economic cost
antitrust action

Pursuing wrong marketing Increased market share

activities effect on quality

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MARKET-CHALLENGER
STRATEGIES
Defining the strategic objective and opponent(s)

A market challenger can attack:

 The market leader
Small local and regional firms
 The status quo
MARKET-CHALLENGER
STRATEGIES
Choosing a general attack strategy
1. Frontal Attack: In a pure frontal attack, the attacker matches its opponent’s product,
advertising, price, and distribution. The principle of force says the side with the greater
resources will win. (Dominos and Pizza Hut, AMUL KOOL)
2. Flank Attack: A flanking strategy is another name for identifying shifts that cause gaps to
develop in the market, then rushing to fill the gaps. LG Sampoorna TV
3. Encirclement Attack: Encirclement attempts to capture a wide slice of territory by
launching a grand offensive on several fronts. It makes sense when the challenger commands
superior resources. Ecommerce Price war, HUL and P&G.
4. Bypassing: Bypassing the enemy altogether to attack easier markets. Offers three lines of
approach: diversifying into unrelated products, diversifying into new geographical markets, and
leapfrogging into new technologies. (Pepsi Aquafina)
5. Guerilla Attack: Guerrilla attacks consist of small, intermittent attacks, conventional and
unconventional, including selective price cuts, intense promotional blitzes, and occasional legal
action, to harass the opponent and eventually secure permanent footholds. (Amazon and
Flipkart)

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Market-Follower Strategies
1.Cloner—The cloner emulates the leader’s products,
Cloner name, and packaging with slight variations.
2. Imitator—The imitator copies some things from the
leader but differentiates on packaging, advertising, pricing,
or location. The leader doesn’t mind as long as the imitator
Imitator doesn’t attack aggressively.
3. Adapter—The adapter takes the leader’s products and
adapts or improves them. The adapter may choose to sell
to different markets, but often it grows into a future
Adapter challenger, as many Japanese firms have done after
improving products developed elsewhere.
PRODUCT LIFE-CYCLE
MARKETING STRATEGIES
A company’s positioning and
differentiation strategy must change
as its product, market, and
competitors change over the PLC
Marketing Strategies: Introduction Stage

Pioneering advantages
 Recall of brand name
 Induce brand trials
 Secure distribution in retail outlets.
 Captures more uses in middle of market
 Imitators can surpass innovators
 Once leadership is lost, it’s rarely regained
 Marketing Strategies: Growth Stage
To sustain rapid market share growth now:
Improve product quality and add new features
Add new models and flanker products
Enter new market segments
Increase distribution coverage and enter new distribution
channels
Shift from awareness and trial communications to preference
and loyalty communications
Lower prices to attract the next layer of price-sensitive buyers
Marketing Strategies: Maturity
Stage
Market modification

Product modification

Marketing program
modification
Market Modification
Marketing Strategies: Decline
Stage
Eliminating Weak Products

Harvesting and Divesting