kotler mm14 ch11 dppt
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Kotler • KellerPhillip Kevin Lane
Marketing Management • 14e
Competitive Dynamics
Chapter 11
Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall Slide 3 of 31
Discussion Questions1. How can market leaders expand the total market
and defend market share?
2. How should market challengers attack market leaders?
3. How can market followers or niche compete effectively?
4. What marketing strategies are appropriate at each stage of the PLC?
5. How should marketers adjust their strategies and tactics for an economic downturn or recession?
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Market Members
Market leader
Market challenger
Market followerMarket nichers
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Figu
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11.1
Hypothetical Market Structure
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Staying Number One
1. Expand total market demand
2. Protect current market share
3. Increase market share
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Expanding Total Market Demand
New Customers
More Usage
Replacement rate
New product uses
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Protect Current Market Share
Proactive Marketing
Offensive Strategy Defensive Strategy
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Figu
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11.2 Six Types of Defense
Strategy
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Increase Market Share
Antitrust action
Pursue wrong marketing activity
Lower overall quality
Decreased profitability
2012 2013
“Actual” quality
“Perceived” quality
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Figu
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11.3
Optimal Market Share
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Other Competitive Strategies
Market-challenger
Market-follower
Market-nicher
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Market-Challenger Strategies
Define objectives and opponent(s)
Choose general attack strategy
Choose Specific attack strategy
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Market-Challenger Strategies
Attack:Market leaderWeaker, similar size firmsSmaller local or regional firms
Frontal attackFlank attackEncirclement attackBypass attackGuerrilla attack
Objectives and Opponents General attack strategies
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Market-Follower Strategies
Counterfeiter
ClonerImitator
Adapter
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Market-Nicher Strategies
Target small, profitable segmentsAchieve higher margins
Nichers TaskCreate nichesExpand nichesProtect niches
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Product Life-Cycle Strategies
• Products have a limited life
• Sales pass through stages
• Profits rise, then fall
• Different strategies needed
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Figu
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11.4 Sales and Profit Life
Cycles
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Figu
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11.5 Common Product Life-
Cycle Patterns
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Figu
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11.6 Style, Fashion, and Fad
Life Cycles
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Product Life-Cycle Stages
Introduction
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Slow sales growth, negative profits
PLC: Introduction Stage
Marketing Strategies:1.Create awareness
2.Induce product trial
3.Secure retail distribution.
Which is more profitable over 5 years?•6 months late, but on budget?•On time, but 50% over budget?
Speed to Market
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Order of Market Entry
First Mover Advantage
• Brand name association• Define product class • Customer inertia• Producer advantages
Imitator Advantage
InventorProduct pioneerMarket pioneer
Pioneer Advantage
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Figu
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11.7 Long-Range Product
Market Expansion Strategy
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PLC: Growth Stage
Rapid sales growth; New competitors
Marketing Strategies:1.Improve product quality; add new features
2.Add new models and flanker products
3.Enter new market segments
4.Focus advertising on preferences
5.Increase distribution coverage
6.Lower price; Attract price-sensitive buyers
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PLC: Maturity Stage
Growth slows; Weak competitors exit
Marketing Objectives:1.Maximize profit2.Defend market share
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PLC: Decline Stage
Slow sales growth, negative profits
Product Options:1.Rejuvenate
2.Harvest
3.Divest
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Tabl
e 11
.2
Characteristics of the PLCIntroduction Growth Maturity Decline
CHARACTERISTICS
Sales Low Rapidly rising Peak Declining
Costs/customer High Average Low Low
Profits Negative Rising High Declining
Customers Innovators Early Adopters Middle majority Laggards
Competitors Few Increasing Stable number Declining
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Tabl
e 11
.2
PLC Objectives and StrategiesIntroduction Growth Maturity Decline
MARKETING OBJECTIVES
Awareness and trial
Maximize market share
Maximize profits; Defend share
Milk the brand
STRATEGIES
Product Basic Extend; Service, warranty
Diversify brands and models
Phase out the weak
Price Charge cost-plus
Price to penetrate Price to match Cut price
Distribution Selective Intensive More intensive Go selective
Communications Awareness early adopters
Awareness w/ mass market
Stress brand benefits
Reduce to minimal
Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall Slide 31 of 31
Marketing in an Economic Downturn
Increasing Investments
Get Closer to Customers
Review Budget Allocations
More Compelling Value Proposition
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