Mkts Strategy

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MARKET LEADER STRATEGIES 1. Expand total market 2. Defend market share 3. Expand market share

MARKET CHALLENGER STRATEGIES 1. Define strategic objective and opponents 2. Choosing an attack strategy

MARKET FOLLOWER STRATEGIES MARKET NICHE STRATEGIES ================ A. 1. MARKET LEADER STRATEGIES EXPAND TOTAL MARKET • New Users E.g.: perfume:--> non-users (mkt-penetration strat) --> men (new market strat) --> other countries (geo-expan strat) E.g.: J&J Baby shampoo: birthrate declining --> ads target adults --> leading brand • New uses Cereals: as snacks --> increase frequency of use OJ: “not for breakfast anymore” Du Pont nylon: parachute-->pantyhose-->blouses & shirts --> auto tires -->seat belts -->
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provoking antitrust action or anti-dumping charge b. economic cost -- beyond optimal MS ,i.e. inverted “U” curve WHY: legal costs, fight off competitors losing MS, PR problems, legal problems c. wrong marketing-mix strategy

Recent case: UPS strike reveals vulnerability - buyers want multiple vendors - unattractive mkt segments strategy: selectively decrease MS in weaker areas Conditions when MS and P go together: a. Unit costs fall with increased MS - real gains in economies of scale -cost/experience curves, Intel: significant improvements in both product and process innovations, and large capital investment in new plants b. Target Premium segment: - premium price covers cost of offering higher quality - MB/BMW strategy



Targets of attack: conditions for success 1. Mkt leader not in tune with mkt: vulnerable -- dissatisfied customers -- technology shifted Intel & Microsoft Vs IBM 2. firm its own size -- underfinanced, not doing job 3. small and regional firms -- underfinanced Attack strategies: 1. Frontal attack: • “head-on” attack: condition : the principleof force 3:1 advantage attacker matches opponent along all parts of MM Cases: Shampoo/conditioner mkt 1977 SCJohnson’s entry in shampoo mkt with Agree: • raided Colgate & others for exper executives • $14M promo blitz; 30M sample bottles of conditioner too • Results: 1978-MS=15%; 1979-MS=20% •

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