Hypothetical market structureMarket leader- 40%Market challenger- 30%Market follower-20 %Market nichers 10%

Five Forces Determining Segment Structural AttractivenessIndustry competitors- size of the industryPotential entrant- existing and new comersSuppliers- no. of suppliers of the products in

the marketBuyers- no. of customersSubstitutes- no. of similar products available

for consumers.

Industry Concept of Competition

Number of sellers and degree of differentiation

Entry, mobility, and exit barriersCost structureDegree of vertical integration- the degree

to which a firm owns its upstream suppliers and its downstream buyers

Degree of globalization

Strengths and Weaknesses for players in the marketShare of marketShare of mindShare of heart

Steps in Benchmarking the performance of various players in the marketDetermine which functions or processes to

benchmarkIdentify the key performance variables to

measureIdentify the best-in-class companiesMeasure the performance of best-in-class

companiesMeasure the company’s performanceSpecify programs and actions to close the gapImplement and monitor results

1.Competitive strategies for market leaders To stay no one, the firm must find 1. Ways to expand market2. Protect its current share through good defensive and

offensive actions3. It shd increase mkt share even if mkt size remains constant

Expanding the total market- when the total market expands, the dominant firms usually gains the most.

1. New customers2. More usage-(package redesigning and product redesign) Additional opportunities to use the brand New ways to use the brand(eg honey)

1.Competitive strategies for market leadersProtect its current shareProactive mktng or offensive marketingA pro active firms are:-1. Ready to take risks and make mistakes2. Have a vision of the future and of investing in it3. Have the capabilities to innovate4. Are flexible and non bureaucratic5. Have many managers who think proactively. Defensive marketing1. Position defense2. Flank defense3. Pre emptive defense or guerella defense4. Counteroffensive defense5. Mobile defense

1.Competitive strategies for market leaders

Increasing market share.The possibility of attracting legal action for violating the

competition act or antitrust law.Economic costThe danger of pursuing the wrong marketing activitiesThe effect of increased mkt share on actual and perceived

quality

2.Market Challenger StrategiesDefine the strategic objective and opponents-1. It can attack the mkt leader2. It can attack firms’s its own size that are not doing the job

and are underfinanced3. It can attack small local and regional firms.Choose a general attack strategy1. Frontal attack2. Flank attack3. Encirclement attack4. Bypass attack-1. diversifying into unrelated products 2. diversifying into new geographical

markets1. 3.leapfrogging into new technologies2. Guerrila attackChoose a specific attack strategy-

Market Challenger strategies Specific Attack Strategies

Price discountsLower-priced

goodsValue-priced goodsPrestige goodsProduct innovation

Improved servicesDistribution

innovationManufacturing-

cost reductionIntensive

advertising promotion

Market Follower StrategiesCounterfeiter- they duplicates the leader’s

product and packages and sell it on the black mkt or through disreputable dealers

Cloner- they emulate the leaders products, name and packaging with slight variations

Imitator- copies some things from the leader but differentiates on packaging, advertising ,pricing or location.

Adapter- they takes the leader’s products and adapts or improves them

Niche Specialist Roles

End-User SpecialistVertical-Level

SpecialistCustomer-Size

SpecialistSpecific-Customer

SpecialistGeographic

Specialist

Product-Line Specialist

Job-Shop SpecialistQuality-Price

SpecialistService-SpecialistChannel Specialist

TimeProductDevelop-ment

Introduction

Profits

Sales

Growth Maturity Decline

Sales andProfits

Sales and Profits Over the Product’s Lifetime

PLC characteristicsA product has a life cycle is to assert four things1. Product have a ltd life2. Product sales pass through distinct stages, each posing

different challenges, opportunities and problems to the seller

3. Profits rise and fall at different stages of the PLC4. Products require different mktng,f financial, purchasing and

HR strategies in each life cycle stage

Product life cycles stages

1. Introduction2. Growth3. Maturity 4. decline

SalesSales

CostsCosts

ProfitsProfits

Marketing ObjectivesMarketing Objectives

ProductProduct

PricePrice

LowLow

High cost per customerHigh cost per customer

NegativeNegative

Create product awareness and trialCreate product awareness and trial

Offer a basic productOffer a basic product

Use cost-plus formulaUse cost-plus formula

DistributionDistribution Build selective distributionBuild selective distribution

PromotionPromotion Heavy to entice product trialHeavy to entice product trial

Summary of Characteristics, Objectives, & Strategies

SalesSales

CostsCosts

ProfitsProfits

Marketing ObjectivesMarketing Objectives

ProductProduct

PricePrice

Rapidly risingRapidly rising

Average cost per customerAverage cost per customer

RisingRising

Maximize market shareMaximize market share

Offer extension, service, warrantyOffer extension, service, warranty

Penetration strategyPenetration strategy

DistributionDistribution Build intensive distributionBuild intensive distribution

PromotionPromotion Reduce to take advantage of demandReduce to take advantage of demand

Summary of Characteristics, Objectives, & Strategies

SalesSales

CostsCosts

ProfitsProfits

Marketing ObjectivesMarketing Objectives

ProductProduct

PricePrice

PeakPeak

Low cost per customerLow cost per customer

HighHigh

Maximize profits while defending market shareMaximize profits while defending market share

Diversify brand and models Diversify brand and models

Match or best competitorsMatch or best competitors

DistributionDistribution Build more intensive distributionBuild more intensive distribution

PromotionPromotion Increase to encourage brand switchingIncrease to encourage brand switching

Summary of Characteristics, Objectives, & Strategies

SalesSales

CostsCosts

ProfitsProfits

Marketing ObjectivesMarketing Objectives

ProductProduct

PricePrice

DecliningDeclining

Low cost per customerLow cost per customer

DecliningDeclining

Reduce expenditures and milk the brandReduce expenditures and milk the brand

Phase out weak itemsPhase out weak items

Cut priceCut price

DistributionDistribution Selective: phase out unprofitable outletsSelective: phase out unprofitable outlets

PromotionPromotion Reduce to minimum levelReduce to minimum level

Summary of Characteristics, Objectives, & Strategies

Mktng Strategies :introduction stage As this stage is the stage where the new product is rolled out, so sales

are slow in this stage. Strategies for this stage are:-1. Inform potential customers2. Induce product trial3. Secure distribution in retail outlets4. Focus on buyers who are more ready to buy5. Prices tend to be higher bcoz cost are high.6. They shd decide when to enter the market.7. High expenditures on IMC programme Companies that plan to introduce their product first can be rewarding ,

and expensive To enter little late is profitable if the firm brings in superior

technology , quality, brand strength. The pioneer has the advantage of brand recall if they satisfies he

customers. Pioneers can enjoy higher rates of repeat purchase

Marketing strategies for Growth stage

During the growth stage, the firm uses several strategies to sustain rapid market growth.

Improves product quality and adds new features and improved styling.

Adds new models and flanker products(i.e., products of different sizes, flavors, and so forth that protect the main product).

It enters new market segments It increases its distribution coverage and

enters new distribution channels. It shifts from product- awareness advertising

to product- preference advertising. It lowers price to attract the next layer of price

– sensitive buyers.

Marketing strategies for Maturity stageThree potentially useful ways to change the course for a

brand are market, product, and marketing program modification.

Market Modification Sales volume = no. of brand users * usage rate per

user. Expand the no. of brand users Convert nonusers Enter new market segments Attract competitors’ customers Increase the

usage rate among users Have consumers use the product on more occasions. Have consumers use more of the product on each

occasion Have consumers use the product in new ways.Product modification Trying to stimulate sales by modifying the

product’s characteristics through

Marketing strategies for Maturity stage contd.

Quality improvement: Aims at increasing the product’s functional performance. Eg: Aashirvaad, Annapoorna, Pillsbury, NaturefreshFeature improvement Aims at adding new features, such as size, weight,

materials, additives, and accessories, that expand the product’s performance, versatility, safety, or convenience.

Style improvement Aims at increasing the product’s esthetics appeal. Eg; New car models, New Coke

Decline StageIncrease investmentResolve uncertainties - stable investmentSelective nichesDivestingTo establish a system for identifying weak

products.Some firms’ abandon declining markets earlier

than others.