kotler mm14 ch11 dppt

Kotler • KellerPhillip Kevin Lane

Marketing Management • 14e

Competitive Dynamics

Chapter 11

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Discussion Questions1. 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 followerMarket nichers

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11.1

Hypothetical Market Structure

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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

Proactive Marketing

Offensive Strategy Defensive Strategy

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11.2 Six Types of Defense

Strategy

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Increase Market Share

Antitrust action

Pursue wrong marketing activity

Lower overall quality

Decreased profitability

2012 2013

“Actual” quality

“Perceived” quality

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11.3

Optimal Market Share

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Other Competitive Strategies

Market-challenger

Market-follower

Market-nicher

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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

Attack:Market leaderWeaker, similar size firmsSmaller local or regional firms

Frontal attackFlank attackEncirclement attackBypass attackGuerrilla attack

Objectives and Opponents General attack strategies

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Market-Follower Strategies

Counterfeiter

ClonerImitator

Adapter

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Market-Nicher Strategies

Target small, profitable segmentsAchieve higher margins

Nichers TaskCreate nichesExpand nichesProtect niches

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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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11.4 Sales and Profit Life

Cycles

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11.5 Common Product Life-

Cycle Patterns

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11.6 Style, Fashion, and Fad

Life Cycles

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Product Life-Cycle Stages

Introduction

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Slow sales growth, negative profits

PLC: Introduction Stage

Marketing Strategies:1.Create awareness

2.Induce product trial

3.Secure retail distribution.

Which is more profitable over 5 years?•6 months late, but on budget?•On time, but 50% over budget?

Speed to Market

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Order of Market Entry

First Mover Advantage

• Brand name association• Define product class • Customer inertia• Producer advantages

Imitator Advantage

InventorProduct pioneerMarket pioneer

Pioneer Advantage

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11.7 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 profit2.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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Tabl

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Characteristics of the PLCIntroduction 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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Tabl

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PLC Objectives and StrategiesIntroduction Growth Maturity Decline

MARKETING OBJECTIVES

Awareness and trial

Maximize market share

Maximize profits; Defend share

Milk the brand

STRATEGIES

Product Basic Extend; Service, warranty

Diversify brands and models

Phase out the weak

Price Charge cost-plus

Price to penetrate Price to match Cut price

Distribution Selective Intensive More intensive Go selective

Communications Awareness early adopters

Awareness w/ mass market

Stress brand benefits

Reduce to minimal

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Marketing in an Economic Downturn

Increasing Investments

Get Closer to Customers

Review Budget Allocations

More Compelling Value Proposition