strategies_for_share_leaders

strategies_for_share_leaders - Situational Variables...

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Unformatted text preview: Situational Variables Primary Objective Market characteristics Compet itors' characteristics Finn‘s characteristics —-—v-.--——_.__._.__..__ —.—.—_...._._... Share Maintenance Strategies Fortress or Position Defense Increase satisfac- tion, loyalty, and repeat purchase among current customers by building on existing Strengths; appeal to late adopters with same attributes and benefits offered to early adopters. Relativeiy homoge- neous market with respect to customer needs and purchase criteria; strong preference for leader's product among largeSt seg- ment of customers. Current and poten- tial competitors have relatively lim- ited resources and competencies. Current product of- fenng eniors high awareness and W W1 0‘ current and 90‘0"" tial custa'nefi.‘ firm has nurturing and nab resources and commm equal to or arm M any cufltfi‘t 0! PO" tential competitor Flanker Protect against loss ‘ of specific segments of current customers by developing a second entry that covers a weakness in original offering; improve ability to attract new cus- tomers with specific needs or purchase criteria different from those of early adopters. Two or more major market segments with distinct needs or purchase criteria. One or more current or potential competitors with sufficient resources and competencies to effectively implement a differentiation strategy. Current product offering perceived as weak on at least one attribute by a maior segment of current or potential customers; firm has sufficient R50 and marketing resources to introduce and thw ......___ Confrontation Protect against loss of share among cur- rent customers by meeting or beating a head-to-head com- petitive offering; improve ability to win new customers who might other- wise be attracted to competitor‘s offering. Relatively homoge- nous market with respect to cus- tomers' needs and purchase criteria; little preference for, or loyalty toward, leader’s product among largest seg- ment of customers. One or more cur- rent or potential competitors with sufficient resources and competencies to effectively imple- ment a head-to- head strategy. Current product of- fering suffers low awareness, prefer- ence. andlor loyalty among major seg- ment of current or potential customers; firm has Rap and Market Expansion Increase ability to attract new customers by developing new product offerings or line extensions aimed at a variety of new applica— tions and user segments; improve ability to retain current customers as market fragments. Relatively hetero- geneous market with respect to customers' needs and purchase cri- teria: multiple product uses re— quiring different product or service attributes. Current and potential com- petitors have relatively limited resources and competencies, particularly with respect to R&D and marketing. No current offerings in one or more potential applications segments; firm has marketing and MD resources and competencies I ‘imflion 0' r’t’iiegic *‘ lthdraw“ 5”. Age i'x lineWcus. virus in selected illiy‘i’i qrgmh sag mi-nts by focusing offerings and resources on those segments; withdraw from smailer or slower-growing segments to conserve resources. [._ Relatively hetero. geneous market with respect to cus- tomers' needs, purchase criteria, and growth poten- tial; multiple prod- uct uses requiring different product or service attributes. One or more cur- rent or potential competitors with sufficient resources and competencies to present a strong challenge in one or more growth segments. Current product offering suffers low awareness. preference. and/or loyalty among I current or potential customers in one or more major growth “filming resources equal to or segments; firm". Md (“Murcia greater than any MD and markemg 99"“ ‘0 0' greater Current or resources and than my current or Patential compflendes 3” potential competitor, competitor. limited relative to those of 0"" f” more competltors' _ Wm_g_’mflh_wyifiiuwflvw WWW.” --""‘J"_r HIBIT 9.4 Strategic (Ihulcei fur Share hum-n In Growth Marian Finlan mama—'5’er Flmlm stratmmflowfl‘w COMPETITOR OR ' POTENTIAL COMPETITOFI POSSible mantequ r“. .... __ Mai“ Obimlves Capture repeat/replacement purchases 1m cun'ent canton-ten 0‘ the leader p rmance IE I5 5 - t ado VG uperlor to those 0* he or other target competitor by ° Head-to-head positioning against - DeVelop products with features and/0r :aompetrtor's offering in primary competitor. rget market. . Draw on superior product design, process engineering. and supplier relationships to achieve lower unit costs. e level of quality or performance hm - Set prices below target it only if low-cost position i get competit dvertising appea ompetitor's for comparabl or on promotion aimed at stimulating selective demand ls directed at gaining a more favorable positionin I brand enjoys among customers in the mass market 9th“ age trial if offering's quality or performance is “meme” better than target competitor's or induce brand switching. More extensive andlor better-trained salesforce than target COMpetitDl-*5_ ade promotion to attain more extensive retail e best distributorsldealers. 0 Outspend the tar Comparative a the target competitor's Sales promotions to encour ' Outspend the target compet coverage, better shelf space, andlor representation by th e target competitor on custo n scheduling, d stockouts. bilities. Build a more extensive comm-my sen-u stributorldealer service people than 0 Outperform th mer service: Develop superior productio inventory control, and logistics systems to minimize delivery times an Develop superior postsale service capa force or provide better training programs for di those of target competitor. o Tunnelogicai differentiation 0 Develop a new generation of products based on different technology that offers sum from target competitor’s offering performance or additional benefits desired by current and potential customers in the m in its primary target market. market (leapfrog strategy). 0 Build awareness, preference, promotion: Comparative a Sales promotions to stim Extensive. well-trained salesforce; presentations. «- Build adequate distribution through trade promotions and dealer training programs and replacement demand through heavy introductory dvertising stressing product’s superiority. ulate trial or encourage switching. heavy use of product demonstrations in sales Stimulate selective demand among Ia ter adopters by - Head-tomcat! positioning against target competitor’s offering in established market segments. - See preceding actions. DEW-"OP a differential!“ brand 01' product line with unique features or prices that is more 0 Differentiated positioning focused - on untapped or underdeveloped appealing to a ma’ ' for segment of potential customers ' ' “gym-nu, ofieri n95 (flanking “rang”. whose needs are not met by existing or s or prices targeted to the 0 Develop multiple line extensions or brand offerings with feature ations or regional unique needs and preferences of sev eral smaller ent' ‘ segments (encirciement strategy), pm la. app“: ° Dessg' n adve ' ' ' ific mag-ring: Personal filling. andlor sales promotion campaign SP“ac I and concerns of potential customers in one or multipl segments to stimulate selective demand ° Build unique distributio ' _ n channels to more eff ' ' rs in 0”“ mump'e underdm‘wed segments ectwely reach potential custome - Desi 5e - ’ 9“ Nice programs to reduce the perceived risks of trial an problems faced . systems engineer? “Tent”. cuflmflers in one or multiple under "19. lI'lstallation. Operator training. extended warranties. se or Web site). 5 that address e underdevel dlor solve EXH'B'T 9-8 Strategic Choices for Challengers in Growth Markets CHALLENGER ' ' Encirciementstratemr . P. Kotlcr and R. Singh Achfol. “Marketing Warfal'c in the 1930 '8," humal of Business Strategy, Winter 1981. Reprinted \1 Ission. EXHIBIT 9.9 Marketing Objectives and Strategies for Challengers ill (3 Situational Variables Frontal Attack Primary Objective Capture substan- tial repeat} replacement pur~ chases from target competi- tor's current customers; attract new customers among later adopters by offer- ing lower price or more attractive features. Market characteristics Relatively homo— geneous market with respect to customers' needs and purchase cri- teria: relatively little preference or loyalty for ex- isting brands; no positive network effects. Target competitor has relatively lim« ited resources and competencies. particularly in marketing and R&D; would prob- ably be vulnerable to direct attack. Competitors' Characteristics Firm has stronger resources and competencies in R&D and market- ing and/or lower operating costs than target competitor. Firm’s characteristics Share-G rowth Strategies Leapfrog induce current cus- tomers in mass market to replace their current brand with supe- rior new offering; attract new cus- tomers by providing en— hanced benefits. Relatively homo- geneous market with respect to customers' needs and purchase cri- teria, but some needs or criteria not currently met by existing brands. One or more cur- rent competitors have relatively strong resources and competencies in marketing, but relatively unso- phisticated technology and limited R810 competencies. Firm has propri— etary technology superior to that of competitors; firm has necessary mar- keting and production re- sources to stimulate and meet primary de- mand for new generation of Flank Attack Attract substantial share of new cus- tomers in one or more major seg- ments where customers’ needs are different from those of early adopters in the mass market. Two or more major segments with distinct needs and purchase cri- teria; needs of customers in at least one segment not currently met by existing brands. Target competitor has relatively strong resources and competencies. particularly in marketing and R810; would prob- ably be able to withstand direct attack. Firm's resources and competencies are limited, but sufficient to effec- tively penetrate and serve at least one major market segment. ruwth Markets Encirclement Attract a sub- stantial share of new customers in a variety of smaller, special- ized segments where cus- tomers' needs or preferences dif- fer from those of early adopters in the mass market. Relatively het- erogeneous market with a number of small, specialized seg- ments; needs and preferences of customers in some segments not currently satisfied by com- peting brands. One or more competitors have relatively strong marketing, R&D resources and competencies, and/or lower costs; could probably with- stand a direct attack. Firm has market- ing, R&D, and production re- sources and competencies necessary to serve multiple smaller seg- ments; firm has decentralized and adaptable management “RR. R Guerrilla AM Capture a mom share of “pew replacement pm chases in severe“ market segmems or territories; at tract a share of new customers in _a number 0i exiSt. "‘9 sengnts. Relatively hetero— QEDEOUS market with a number of larger segments; needs and prefer- ences of customers in most segments currently satisfied by Competing brands. A number of corn. petitors have relatively strong marketing. RM) resources and competencies. andlor lower costs could probably withstand a diner! attack. Firm has relatively limited marketing- R&D, andlor PW dudion mow?es and competenm firm has decentra" ized and adaptable ma” agement structure- pmdUCtS- structure. ...
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This note was uploaded on 09/07/2011 for the course BMGT 457 taught by Professor Staff during the Spring '08 term at Maryland.

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strategies_for_share_leaders - Situational Variables...

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