Dealing with the competition

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Kotler on Marketing
Poor firms ignore their competitors; average firms copy their competitors; winning firms lead their competitors.

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Competitive Forces
Five Forces Determining Segment Structural Attractiveness

Threat of:
1. intense segment rivalry 2. new entrants 3. substitute products buyers growing bargaining power suppliers growing bargaining power
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Industry Concept of Competition:

Industry: Number of sellers Degree of product differentiation Presence or absence of entry Mobility Exit Barriers Cost Structure Degree of Vertical Integration Degree of Globalization
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Analyzing Competitors:
Strategies: A group of firms following the same strategy in a given target market is called a Strategic Group

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Objectives: Current Profitability Market Share Growth Cash Flow Technological Leadership Service Leadership

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Analyzing Competitors
A Competitors Expansion Plans

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Strengths and Weaknesses:

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Analyzing Competitors
Three Variables to Monitor When Analyzing Competitors:
Share of market Share of mind Share of heart

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Selecting Competitors
Strong versus Weak Close versus Distant Good versus Bad

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Competitive Strategies for Market Leaders:

Market Leader Market Challenger Market Follower Market Nichers

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Designing Competitive Strategies

Hypothetical Market Structure

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Designing Competitive Strategies

Market-Leader Strategies
Expanding the Total Market
New Users
Market-penetration strategy New-market segment strategy Geographical-expansion strategy

New Uses More Usage

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 Responsive Marketer Anticipative Marketer Creative Marketer

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Designing Competitive Strategies

Defense Strategies
Position Defense Flank Defense Preemptive Defense - SBI
Contraction Defense Planned contraction (Strategic withdrawal)

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 HUL Increased its ad-spend on Clinic and Sunsilk Emphasised the Pro-V content of Clinic in order to make Pantene look like a metoo product

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Designing Competitive Strategies

Market-Challenger Strategies
Defining the Strategic Objective and Opponent(s)
It can attack the market leader It can attack firms of its own size that are not doing the job and are underfinanced It can attack small local and regional firms

Choosing a General Attack Strategy

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Copyright 2003 Prentice-Hall, Inc.

Procter & Gamble

HUL 1964 Sunsilk 1971 Clinic 1987 Clinic Plus Clinic All Clear (Dandruff) Sunsilk 1987 1991 Clinic Active USP ( Provitamin B5)

1995 Pantene: Positioning on nourishment

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 Head & Shoulders (antidandruff shampoo Pantene Nourishment platform Attack Single Brand Approach Pantene contains Pantyl B Replenishes the scalps supply of ProVitamin B5
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1995 10 lakh samples Health Care booklet Pricing 6 ml 8 ml of Sunsilk 90ml Pantene bottle 100ml Sunsilk bottle

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Attack Strategies

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Frontal Attack Amul Flank Attack LG Sampoorna Encirclement From all sides Bypass Pepsi against Coke Aggressively rolling out Aquafina bottled water -1997 Purchase of Orange Juice giant Tropicana -1998 Purchase of Market leader Gatorade Quaker Oats 2000 Guerrilla Warfare

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Designing Competitive Strategies

Market-Follower Strategies
Four Broad Strategies:
Counterfeiter Cloner Imitator Adapter

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Designing Competitive Strategies

Market-Nicher Strategies
High margin versus high volume Nicher Specialist Roles
End-user specialist
Value-added reseller

Vertical-level specialist Customer-size specialist Specific-customer specialist Geographic specialist Product or product-line specialist
Copyright 2003 Prentice-Hall, Inc.

Product-feature specialist Quality-price specialist Service specialist Channel specialist

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