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11 Competitive Dynamics

2. 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?

3. Figure 1.1 Five Forces Determining Segment Structural Attractiveness (Michael Porter’s)
Potential Entrants (Threat of Mobility
Suppliers (Supplier power)
Industry Competitors (Segment rivalry)
Buyers (Buyer power)
Substitutes (Threat of substitutes)

4. 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

5. Industry Concept of Competition
Pure monopoly
Oligopoly
Monopolistic competition
Pure competition

6. Market Concept of Competition
Substitutes
Secondary Competitors
Primary Competitors
The product (and its value proposition)

7. Analyzing Competitors
Share of market
Share of mind
Share of heart

8. Selecting Competitors
Strong versus Weak
Close versus Distant
“Good” versus “Bad”

9. Competitive Strategies for Market Leaders: Expanding the Total Market
New customers
More usage

10. Figure 11.6 Six Types of Defense Strategies
Defender
Flank
Preemptive
Counteroffensive
Mobile
Contraction

11. 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

12. Other Competitive Strategies
Market challengers
Market followers
Market nichers

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

14. General Attack Strategies (1)
Frontal attack

15. General Attack Strategies (2)
Flank attack: an enemy’s weak spots are natural targets.

16. General Attack Strategies (3)
Encirclement attack: a grand offensive attack on several fronts.

17. General Attack Strategies (4)
Bypass attack: bypassing the enemy and attacking easier markets to broaden one’s resource base (by diversifying into unrelated products/ geographical markets, and leapfrogging into new technologies)

18. General Attack Strategies (5)
Guerrilla warfare: consists of small, intermittent attacks to harass and demoralize the opponent and eventually secure permanent footholds.
Suitable for smaller firms against a larger one.

19. 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

20. Market Follower Strategies
Counterfeiter
Cloner
Imitator
Adaptor

21. Market Nicher Strategies
A leader in small market
End-user specialist
Vertical-level specialist
Customer-size specialist
Specific-customer specialist
Geographic specialist
Product or product-line specialist
Product-feature specialist
Job-shop specialist
Quality-price specialist
Service specialist
Channel specialist

22. Marketing in an Economic Downturn
Invest
Get close to customers
Review budgets
Use a compelling value proposition
Fine-tune offerings
Despite reduced funding for marketing programs and intense pressure to justify them as cost effective, some marketers survived—or even thrived—in the recession. This slide lists five guidelines to improve the odds for success during an economic downturn.

23. Balancing Orientations
Competitor-centered
Customer-centered
We were going to obsess over our customers and not our competitors. We watch our competitors, learn from them, see the things that they were doing for customers and copy those things as much as we can. But we were never going to obsess over them.