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Dealing with Competition

Tonette Viray

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• How do marketers identify primary competitors?

• How should we analyze competitors’ strategies, objectives, strengths, and weaknesses?

• How can market leaders expand the total market and defent market share?

Outline

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• How should market challengers attack market leaders?

• How can market followers or nichers compete effectively?

Outline

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5 Competitive Forces

Substitute

Buyers

New entrant

SuppliersSegment Rivalry

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Industry Concept of Competition

1. # of sellers and degree of differentiation 2. Entry, Mobility and Exit Barriers 3. Cost Structure4. Degree of Vertical Integration5. Degree of Globalization

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narrow linemoderate line

full linebroad

line

Strategic Groups

Base on Vertical Integration

high

low

quality

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Customer’s Rating of Competitor’s on key Success factors

Customer awareness

Product quality

Product AvailabilityTechnical

Assistance

Selling Staff

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3 Variables

Strengths & Weaknesses

Share of market

Share of heartShare of mind

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Hypothetical Market Structure

challengerfollower

nichers

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6 types of Defense Strategies

flank

contraction

Preemptive

Counteroffensive

mobile

Positiondefense

attacker

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Optimal Market Share

Probability might fall

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Other Competitive Strategies

Market Followers

Market challengers

Market Nichers

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Market Challengers Strategeties

Define Strategic Objectives and Opponents

Choose a General Attack

Choose a Specific Attack

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Frontal Attack

Flank Attack

Encirclement Attack

Bypass Attack

Guerrilla Attack

General Attack Strategies

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Specific Attack Strategies

Price discount

Product Innovation

Improved Services

Distribution innovation

Manufacturing cost reduction

advertising

Product Proliferation

Value Priced Goods

Value Priced Goods

Prestige Goods

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Counterfeiter

Cloner

Imitator

Adapter

Market Follower Strategies

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End user SpecialistVertical level Customer SizeSpecific CustomerGeographic Product lineJob-shopQuality Price

Niche Specialist Roles

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Service Specialist

Channel Specialist

Niche Specialist Roles

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Competitive Forces

Analyzing competitors

Competitive Strategies for Market

etcOther Competitive Strategies

Balancing Customer and Competitor Orientation

PLAYER as COMPETITION

Mind as Share of mind

Heart as Share of heart

Market as Share of Market

COMPETITIVE STRATEGIES

Shoot as Market Challenger

Pass as Market Nichers

Set Play as Market Followers

http://jeroldsaddi.blogspot.com/

Crafting the Brand Positioning

Jerold I. Saddi

May 3, 2012

http://jeroldsaddi.blogspot.com/

Intro

a. What are the industry concepts of competition?

b. How to analyze competitors?c. How to expand, protect and increase

market share?d. What are the other competitive

strategies?

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Industry Concept of Competition

No. of sellers and degree of differentiation

Entry, mobility, and exit barriersCostVertical integrationGlobalization

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Analyzing Competitors

2 tools on how to analyze competitors

1. Swot Analysis

2. Competitor Matrix

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Strengths and Weaknesses

…maybe attributed in buying a book.

Share of Market

Share of Mind

Share of Heart

Mine bomb

Profit

Shared heart

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Expanding Total Market Demand

a. Look for new customers

b. Increase product usage

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Protecting Market Share

Continuous Innovation

Proactive Marketing

Shield

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Defensive Marketing

…like playing a softball…

a. Position Defenseb. Flank Defensec. Pre-emptive Defensed. Counteroffensive Defensee. Mobile Defensef. Contraction Defense

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Increasing Market Share..like buying a condom..

Factors that need to be considered:

1. The possibility of provoking antitrust action

2. Economic cost

TRUST Condom

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3. The danger of pursuing the wrong marketing activities

4. The effect of increased market share on actual and perceived quality

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Other Competitive Strategies

a. Market Challengerb. Market Followersc. Market Nichers

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Market ChallengersStrategies:

a. Define the strategic objective and opponent(s)

i. Market Leader

ii. Own size

iii. Small local and regional firms

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Choosing a General Attack Strategy

a. Frontal Attackb. Flank Attackc. Encirclement Attackd. Bypass Attacke. Guerrilla Attacks

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Market-Follower Strategies

a. Counterfeiterb. Clonerc. Imitatord. Adapter

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Summary

SWOTCOMPETITOR

MATRIX

Mine bomb

Shared heart

Profit

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Crafting the Brand Positioning

Jerold I. Saddi

May 3, 2012