MARKETING MANAGEMENT 12th edition 11 Dealing with Competition Kotler Keller

Chapter Questions 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 defend market share? How should market challengers attack market leaders? How can market followers or nichers compete effectively?

Competition in the Jeans Market

Figure 1.1 Five Forces Determining Segment Structural Attractiveness

Identifying Competitors

Industry Concept of Competition Number of sellers and degree of differentiation Entry, mobility, and exit barriers Cost structure Degree of vertical integration Degree of globalization

Industry Concept of Competition Pure Monopoly Oligopoly Monopolistic Competition Pure Competition

Figure 11.2 Competitor Map

Figure 11.4 A Competitor’s Expansion Plans

Analyzing Competitors Share of market Share of mind Share of heart

Table 11.2

Figure 11.5 Hypothetical Market Structure 10% Market Nichers 20% Market Follower 30% Market Challenger 40% Market Leader

Expanding the Total Market New customers More usage

Figure 11.6 Six Types of Defense Strategies

Figure 11.7 Optimal Market Share

Factors Relevant to Pursuing Increased Market Share Possibility of provoking antitrust action Economic cost Pursuing the wrong marketing-mix strategy The effect of increased market share on actual and perceived quality

Other Competitive Strategies Market Challengers Market Nichers Market Followers

Market Challenger Strategies Define the strategic objective and opponents Choose a general attack strategy Choose a specific attack strategy

General Attack Strategies Frontal Attack Flank Attack Encirclement Attack Bypass Attack Guerrilla Warfare

Pepsi buys Gatorade in a Bypass Strategy

Specific Attack Strategies Price discounts Lower-priced goods Value-priced goods Prestige goods Product proliferation Product innovation Improved services Distribution innovation Manufacturing-cost reduction Intensive advertising promotion

Samsung Attacks Using Innovation

Market Follower Strategies Counterfeiter Cloner Imitator Adapter

Market Nicher Strategies

Balancing Orientations Competitor- Centered Customer- Centered

Marketing Debate How do you attack a Category Leader? Take a position: The best way to challenge a leader is to attack its strengths. 2. The best way to attack a leader is to avoid a head-on assault and to adopt a flanking strategy.

Marketing Discussion Pick an industry. Classify firms according to the four different roles they might play. How would you characterize the nature of competition? Do the firms follow the principles described in this chapter?