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Chapter 12

Chapter 12. Addressing Competition and Driving Growth. Learning Objectives. Why is it important for companies to grow the core of their business? How can market leaders expand the total market and defend market share? How should market challengers attack market leaders?

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Chapter 12

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  1. Chapter 12 Addressing Competition and Driving Growth

  2. Learning Objectives • Why is it important for companies to grow the core of their business? • 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? • What marketing strategies are appropriate at each stage of the product life cycle? • How should marketers adjust their strategies and tactics during slow economic growth?

  3. Growth strategies • Building your market share • Developing committed customers and stakeholders • Building a powerful brand • Innovating new products, services, and experiences • International expansion • Acquisitions, mergers, and alliances • Building an outstanding reputation for social responsibility • Partnering with government and NGOs

  4. Growing the Core Make the core of the brand as distinctive as possible Drive distribution through both existing and new channels Offer the core product in new formats or versions

  5. Competitive Strategiesfor Market Leaders • Expanding total market demand • Protecting market share • Increasing market share

  6. Expanding total market demand • New customers • More usage

  7. Protecting market share • Proactive marketing • Responsive anticipation • Creative anticipation

  8. Protecting market share • Defensive marketing

  9. Increasing market share • The cost of buying higher market share through acquisition may far exceed its revenue value Possibility of provoking antitrust action Economic cost Pursuing wrong marketing activities Increased market share effect on quality

  10. Figure 12.3Optimal Market Share

  11. Market-Challenger Strategies • Defining the strategic objective and opponent(s) • A market challenger can attack: • The market leader • Underfunded firms its own size • Small local and regional firms • The status quo

  12. Market-Challenger Strategies • Choosing a general attack strategy

  13. Market-Follower Strategies Cloner Imitator Adapter

  14. Market-Nicher Strategies • To be a leader in a small market • Firms with low shares of the total market can become highly profitable through smart niching

  15. Niche Specialist Roles End-user specialist Vertical-level specialist Customer-size specialist Channel specialist Job-shop specialist Geographic specialist

  16. Product Life-Cycle Marketing Strategies • A company’s positioning and differentiation strategy must change as its product, market, and competitors change over the PLC

  17. Figure 12.6Common Product Life-Cycle Patterns

  18. Figure 12.7Style, Fashion, And Fad Life Cycles

  19. Marketing Strategies: Introduction Stage • Pioneering advantages • Recall of brand name • Establishes product class attributes • Captures more uses in middle of market • Pioneering drawbacks • Imitators can surpass innovators • Once leadership is lost, it’s rarely regained

  20. Figure 12.8Long-Range Product Market Expansion Strategy

  21. Marketing Strategies: Growth Stage • To sustain rapid market share growth now: • Improve product quality and add new features • Add new models and flanker products • Enter new market segments • Increase distribution coverage and enter new distribution channels • Shift from awareness and trial communications to preference and loyalty communications • Lower prices to attract the next layer of price-sensitive buyers

  22. Marketing Strategies: Maturity Stage Market modification Product modification Marketing program modification

  23. Market Modification

  24. Marketing Strategies: Decline Stage • Eliminating Weak Products • Harvesting and Divesting

  25. Marketing in a Slow-Growth Economy • Explore upside of increasing investment • Get closer to customers • Review budget allocations • Put forth compelling value proposition • Fine-tune brand and product offerings

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