Download - Kotler Compet
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2003 Prentice Hall, Inc. To accompanyA Framework for Marketing Management, 2ndEdition Slide 0 in Chapter 8
Chapter 8
Deal ing w ith the
Compet i t ionPowerPoint by Karen E. James
Louisiana State University - Shreveport
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2003 Prentice Hall, Inc. To accompanyA Framework for Marketing Management, 2ndEdition Slide 1 in Chapter 8
Objectives
Understand how a company
identifies its primary competitors
and ascertains their strategies.
Review how companies design
competitor intelligence systems.
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2003 Prentice Hall, Inc. To accompanyA Framework for Marketing Management, 2ndEdition Slide 2 in Chapter 8
Objectives
Learn how a company decides
whether to position itself as a
market leader, a challenger, a
follower, or a nicher.
Identify how a company canbalance a customer vs. competitor
orientation.
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2003 Prentice Hall, Inc. To accompanyA Framework for Marketing Management, 2ndEdition Slide 3 in Chapter 8
Market share
40%
30%
20%
Market leader
Challenger
Follower
Nichers:
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2003 Prentice Hall, Inc.
Competitor MyopiaThe Kodak story:
To accompanyA Framework for Marketing Management, 2ndEdition Slide 4 in Chapter 8
Presumed competitor.
Realcompetition
FUJI
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2003 Prentice Hall, Inc.
The Customer Myopia theLevis story.
To accompanyA Framework for Marketing Management, 2ndEdition Slide 5 in Chapter 8
Perceivedcompetition
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2003 Prentice Hall, Inc.
What LEVIS missed out!
To accompanyA Framework for Marketing Management, 2ndEdition Slide 6 in Chapter 8
Up-market fashion customers: Femalesegment.
Value- seekers.
Current Elliot
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2003 Prentice Hall, Inc. To accompanyA Framework for Marketing Management, 2ndEdition Slide 7 in Chapter 8
Competitive Markets
Porters Five Forces that Determine
Market Attractiveness:
Threat of intense segment r ivalry
Threat of new entrants
Threat of subst i tute products
Threat of buyers growing bargainingpower
Threat of suppliers growing bargainingpower
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2003 Prentice Hall, Inc. To accompanyA Framework for Marketing Management, 2ndEdition Slide 8 in Chapter 8
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2003 Prentice Hall, Inc. To accompanyA Framework for Marketing Management, 2ndEdition Slide 9 in Chapter 8
Competitive Markets
Failing to identify competitorscan lead to extinction
Internet businesses have led todis intermediat ionof middlemen
Competition can be identifiedusing the indust ryor marketapproach
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2003 Prentice Hall, Inc.
Pure Monopoly.
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2003 Prentice Hall, Inc. To accompanyA Framework for Marketing Management, 2ndEdition Slide 12 in Chapter 8
Competitive Markets
Industry Structures
Pure Monopo ly
Pure Ol igopo ly
Differentiated
Ol igopoly
Monopol is t ic
Compet i t ion
Pure Compet it ion
A few firms produce
essentially identical
commodities andlittle differentiation
exists
Lower costs are the
key to higher profits
Example:Petroleum
products .
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2003 Prentice Hall, Inc.
Pure Oligopoly
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2003 Prentice Hall, Inc. To accompanyA Framework for Marketing Management, 2ndEdition Slide 14 in Chapter 8
Competitive Markets
Industry Structures
Pure Monopo ly
Pure Ol igopo ly
Differentiated
Ol igopoly
Monopol is t ic
Compet i t ion
Pure Compet it ion
A few firms producepartiallydifferentiated items
Differentiation is bykey attributes
Premium price may
be charged
Example:Air l ineserv ices,Luxu ry cars
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2003 Prentice Hall, Inc.
Differentiated Oligopoly.
To accompanyA Framework for Marketing Management, 2ndEdition Slide 15 in Chapter 8
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2003 Prentice Hall, Inc. To accompanyA Framework for Marketing Management, 2ndEdition Slide 16 in Chapter 8
Competitive Markets
Industry Structures
Pure Monopoly
Pure Ol igopo ly
Differentiated
Ol igopoly
Monopol is t ic
Compet i t ion
Pure Compet it ion
Many firms
differentiate items in
whole or part Appropriate market
segmentation is key
to success
Example:Cosmet ics,
Beverages,
garments.
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2003 Prentice Hall, Inc.
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2003 Prentice Hall, Inc. To accompanyA Framework for Marketing Management, 2ndEdition Slide 18 in Chapter 8
Competitive Markets
Industry Structures
Pure Monopo ly
Pure Ol igopo ly
Differentiated
Ol igopoly
Monopol is t ic
Compet i t ion
Pure Compet it ion
Many competitors
offer the same
product Price is the same
due to lack of
differentiation
Example:farmers
selling milk, crops,
commodities.
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2003 Prentice Hall, Inc. To accompanyA Framework for Marketing Management, 2ndEdition Slide 19 in Chapter 8
Market Approach.
A broader group of competitors
will be identified using the
market app roach
Competi tor mapsplot buying
steps in purchasing and usingthe product, as well as direct and
indirect competitors
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2003 Prentice Hall, Inc. To accompanyA Framework for Marketing Management, 2ndEdition Slide 20 in Chapter 8
Designing Competitive Strategies
Major Strategies
Market-Leader
Market-
Chal lenger
Market-Fol lower
Market-Nicher
Expanding the
total market
Defending
market share
Expanding
market share
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2003 Prentice Hall, Inc. To accompanyA Framework for Marketing Management, 2ndEdition Slide 21 in Chapter 8
Designing Competitive Strategies
Expanding the Total Market:
Target ing Produ ct to New UsersMarket-penetration strategy
New-market strategy
Geographical-expansion strategyPromot ing New Uses o f Product
Encouraging Greater Produc t Use
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2003 Prentice Hall, Inc.
Creating novel coffee
based products
Targeting product to new users.
To accompanyA Framework for Marketing Management, 2ndEdition Slide 22 in Chapter 8
Undertaking retail
concentration
Highambience forlifestyle customers
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2003 Prentice Hall, Inc.
Promoting new uses of product:
To accompanyA Framework for Marketing Management, 2ndEdition Slide 23 in Chapter 8
Fat free food
for dieters
Fortified high
fiber food for
athletes.
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2003 Prentice Hall, Inc.
Encouraging greater product use.
To accompanyA Framework for Marketing Management, 2ndEdition Slide 24 in Chapter 8
Creating Jumbo
packs.
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2003 Prentice Hall, Inc. To accompanyA Framework for Marketing Management, 2ndEdition Slide 25 in Chapter 8
Designing Competitive Strategies
Positiondefense
Flank defense
Preemptivedefense
Counteroffensive
defense
Mobile defense
Contraction
defense
Defending Market Share
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2003 Prentice Hall, Inc.
Position Defense
Always be top on:
Share of the market.
Share of mind.
Share of heart.
To accompanyA Framework for Marketing Management, 2ndEdition Slide 26 in Chapter 8
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2003 Prentice Hall, Inc.
Flank defense:Vodka Wars.
To accompanyA Framework for Marketing Management, 2ndEdition Slide 27 in Chapter 8
Smirnoff vs
Wolfschmidt.
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Pre-emptive Defense
To accompanyA Framework for Marketing Management, 2ndEdition Slide 28 in Chapter 8
vs
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2003 Prentice Hall, Inc.
Counteroffensive defense.
To accompanyA Framework for Marketing Management, 2ndEdition Slide 29 in Chapter 8
vs
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2003 Prentice Hall, Inc.
Mobile defense:
To accompanyA Framework for Marketing Management, 2ndEdition Slide 30 in Chapter 8
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2003 Prentice Hall, Inc.
Contraction Defense
To accompanyA Framework for Marketing Management, 2ndEdition Slide 31 in Chapter 8
Offloads
and
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2003 Prentice Hall, Inc. To accompanyA Framework for Marketing Management, 2ndEdition Slide 32 in Chapter 8
Designing Competitive Strategies
Before Attempting to Expand
Market Share, Consider:
Probabi l ity o f invoking ant i t rust
act ion
Econom ic costs invo lved
Likelihood that market ing m ix
decis ion s w i l l inc rease pro f i ts
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2003 Prentice Hall, Inc. To accompanyA Framework for Marketing Management, 2ndEdition Slide 33 in Chapter 8
Designing Competitive Strategies
Major Strategies
Market-Leader
Market-
Chal lenger
Market-Fol lower
Market-Nicher
First define the
strategic goals
and opponent(s)
Choose general
attack strategy
Choose specific
attack strategy
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2003 Prentice Hall, Inc. To accompanyA Framework for Marketing Management, 2ndEdition Slide 34 in Chapter 8
Designing Competitive Strategies
General Attack Strategies:
Fron tal at tacks match competi t ion
Flank attacks serve unmet market
needs or underserved areas
Encirclement blitzes opponentBypassing opponent and attack ing
easier markets is also an op t ion
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2003 Prentice Hall, Inc.
Frontal attack:Airbus vs Boeing.
To accompanyA Framework for Marketing Management, 2ndEdition Slide 35 in Chapter 8
Vs
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2003 Prentice Hall, Inc.
Encirclement or Blitzattack:
To accompanyA Framework for Marketing Management, 2ndEdition Slide 37 in Chapter 8
Vs
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2003 Prentice Hall, Inc.
By-pass attack:Pepsi Vs Coca Cola.
To accompanyA Framework for Marketing Management, 2ndEdition Slide 38 in Chapter 8
Vs
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2003 Prentice Hall, Inc. To accompanyA Framework for Marketing Management, 2ndEdition Slide 39 in Chapter 8
Competitive Markets
Price-discount
Lower-price goods
Prestige goods
Improved services Product proliferation
Product
innovation
Distribution
innovation
Manufacturingcost reduction
Intensive advertising promotion
Specific Attack Strategies Include:
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2003 Prentice Hall, Inc. To accompanyA Framework for Marketing Management, 2ndEdition Slide 40 in Chapter 8
Designing Competitive Strategies
Major Strategies
Market-Leader
Market-
Chal lenger
Market-Fol lower
Market-Nicher
Imitation may bemore profitablethan innovation
Four broadstrategies:
Counterfei ter
Cloner
Imitator
Adapter
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2003 Prentice Hall, Inc.
Imitator
To accompanyA Framework for Marketing Management, 2ndEdition Slide 42 in Chapter 8
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2003 Prentice Hall, Inc.
Adapters
To accompanyA Framework for Marketing Management, 2ndEdition Slide 43 in Chapter 8
Samsung Galaxy tab I-Pad
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2003 Prentice Hall, Inc. To accompanyA Framework for Marketing Management, 2ndEdition Slide 44 in Chapter 8
Designing Competitive Strategies
Major Strategies
Market-Leader
Market-
Chal lenger
Market-Fol lower
Market-Nicher
Niche specialties:
End-user
Vertical-level
Customer-size
Speci f ic custom er
Geographic
Produc t /prod uct l ine
Produc t feature
Job-shop
Quali ty-price
Service
Channel
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