Chapter

12
Addressing
Competition and
Driving Growth

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Learning Objectives
1. Why is it important for companies to grow the core of
their business?
2. How can market leaders expand the total market and
defend market share?
3. How should market challengers attack market
leaders?
4. How can market followers or nichers compete
effectively?
5. What marketing strategies are appropriate at each
stage of the product life cycle?
6. How should marketers adjust their strategies and
tactics during slow economic growth?
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 Growth strategies
• Building your market • International expansion
share • Acquisitions, mergers,
• Developing committed and alliances
customers and • Building an outstanding
stakeholders reputation for social
• Building a powerful brand responsibility
• Innovating new products, • Partnering with
services, and government and NGOs
experiences

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Why Is It Important For Companies To Grow The Core
Of Their Business?

Growing the Core

Make the core of the brand as
distinctive as possible

Drive distribution through both

existing and new channels

Offer the core product in new formats

or versions

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How Can Market Leaders Expand The Total Market And Defend Market
Share?
Competitive Strategies for Market Leaders
• Expanding total market
demand

• Protecting market share

• Increasing market share

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Expanding total market demand
• New customers
• More usage

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 Protecting market share

• Proactive marketing
– Responsive anticipation
– Creative anticipation

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 Protecting market share
• Defensive marketing

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 Increasing market share
• The cost of buying higher market share
through acquisition may far exceed its
revenue value
Possibility of provoking
Economic cost
antitrust action

Pursuing wrong Increased market share

marketing activities effect on quality

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 Figure 12.3
Optimal Market Share

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How Should Market Challengers Attack Market Leaders?
MARKET-CHALLENGER STRATEGIES
• Defining the strategic objective and
opponent(s)

A market challenger can attack:

 The market leader
 Underfunded firms its own size
 Small local and regional firms
 The status quo

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 MARKET-CHALLENGER
STRATEGIES
• Choosing a general attack strategy

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 How Can Market Followers Compete
Effectively?
Market-Follower Strategies
Cloner

Imitator

Adapter

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How Can Market Nichers Compete Effectively?
MARKET- NICHER STRATEGIES
• To be a leader in a
small market
– Firms with low shares
of the total market
can become highly
profitable through
smart niching

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 Niche Specialist Roles

Vertical-
End-user
level
specialist
specialist

Customer-
Channel size
specialist specialist

Job-shop Geographic
specialist specialist

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What Marketing Strategies Are Appropriate At Each Stage
Of The Product Life Cycle?
PRODUCT LIFE-CYCLE MARKETING STRATEGIES
• A company’s
positioning and
differentiation
strategy must change
as its product,
market, and
competitors change
over the PLC

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 Figure 12.6
Common Product Life-Cycle
Patterns

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 Figure 12.7
Style, Fashion, And Fad Life Cycles

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 Marketing Strategies: Introduction
Stage
• Pioneering advantages
– Recall of brand name
– Establishes product class attributes
– Captures more uses in middle of market
• Pioneering drawbacks
– Imitators can surpass innovators
– Once leadership is lost, it’s rarely regained

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 Figure 12.8
Long-Range Product Market Expansion Strategy

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Marketing Strategies: Growth Stage
• To sustain rapid market share growth now:
– Improve product quality and add new features
– Add new models and flanker products
– Enter new market segments
– Increase distribution coverage and enter new
distribution channels
– Shift from awareness and trial communications to
preference and loyalty communications
– Lower prices to attract the next layer of price-sensitive
buyers

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Marketing Strategies: Maturity Stage

Market modification

Product modification

Marketing program
modification

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Market Modification

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Marketing Strategies: Decline Stage
• Eliminating Weak
Products

• Harvesting and
Divesting

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How Should Marketers Adjust Their Strategies And Tactics During
Slow Economic Growth?

Marketing in a Slow-Growth
Economy
 Explore upside of increasing investment
 Get closer to customers
 Review budget allocations
 Put forth compelling value proposition
 Fine-tune brand and product offerings

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Copyright © 2016 Pearson Education Ltd. 12-26