Chapter-12
Competitive Dynamics
Prepared By:
Nayeema Sultana
Senior Lecturer, Department of Business
Administration, EWU
Figure 11.1
Hypothetical Market Structure
Source: Published in ‘The Daily Star’, August 19, 2020
Competitive strategies for Market
Leader
Expanding Total Market Demand
⚫ New Customers –
A company can search for new customers from 3 groups—
i. Those who might use it but do not ( Market Penetration)
ii. Those who have never used it (New market segment)
iii. Those who live elsewhere ( geographical expansion strategy)
Expanding Total Market Demand
• More Usage–
1. Attractive packaging
ii. New ways to use the brand
Protecting Market Share
⚫ Proactive Marketing---- discovering solutions customers did
not ask for.
Protecting Market Share
Defensive Marketing --- reduce the probability of
attack
i. Position defense- occupying most desirable place
in consumers’ mind
ii. Flank defense- erect outposts to protect or support a
counterattack
[Link] defense– Guerilla attack 1st across
the market
[Link] defense – Meet and hit
attacker frontally
v. Mobile defense – stretches business to new
territories.
vi. Contraction defense – giving up weaker markets &
reassign resources to stronger one.
Market Challenger Strategies
Defining strategic objective & opponents
⚫ Decide whom to attack.
-- can attack market leader
-- can attack firm of its own size
-- can attack small firms.
Choosing a general attack strategy
i. Frontal Attack – Apex with Bata
ii. Flank Attack- Pepsi, 7up, Mirinda, Dew by Pepsico.
iii. Encirclement Attack-
iv. Bypass Attack—
v. Guerrilla Attack—
Selecting a specific attack strategy
Market Follower Strategies
⚫ i. Counterfeiter – DUPLICATES the
leader’s products & packages & sells in
the BLACK MARKET.
ii. Cloner – Emulates the leader’s products
& packages with SLIGHT VARIATION.
iii. Imitator– COPIES something from the
leader but DIFFERENTIATES on
packaging, advertising, pricing or location.
iv. Adapter – Takes leaders products and
ADAPTS them.
Market Nicher Strategies
⚫ Creating Niches
⚫ Expanding Niches
⚫ Protecting Niches
Product Life Cycle Marketing
Strategies
Marketing strategies:
Introduction stage
⚫ Offer a basic product
⚫ Decide when to enter the market
⚫ Secure distribution at retail store
⚫ Inform customers and induce trial
Marketing strategies:
Growth stage
⚫ Improves product quality
⚫ Adds new features
⚫ Adds new models
⚫ Enters new market segments
⚫ Increases its distribution coverage
⚫ Lowers price to attract the buyers
Marketing strategies:
Maturity stage
⚫ Market modification :
✔ Increase the number of customers
✔ Increase product usage
⚫ Product modification:
✔ Quality improvement
✔ Feature improvement
✔ Bring new product
⚫ Marketing program modification:
✔ Modify price
✔ Modify distribution
✔ Modify communication
Marketing strategies:
Decline stage
⚫ Reduce the number of products
⚫ Withdraw from small segments
⚫ Withdraw weaker trade channel
⚫ Cut marketing budget
⚫ Reduce price further