Competitive strategies of marketing is very important for a market leader to grow increase market of any product of a company.
Usually a market leader has a largest market share.A Market Leader has 40% market share, Market Challenger has 30% market share, 20% of share is claimed by a Market Follower and 10% market share is hold by Market Nicher. Market leaders, usually lead in price changes,new product introductions,distribution coverage and promotional intensity.
Competitive strategies of marketing is divided into three parts- Expanding total market demand, Good offensive and defensive action, Increase the market share.
Expanding Market Share: Expanding market share strategie is divided into two parts- New customers and More usage.
(1) New customers:A company can search for new customers among three groups-Those who might use it but do not (Market-penetration strategy),those who have never used it(new market segment strategy),those who live elsewhere(geographical expansion strategy).Example:Starbucks produces and sells bottled Franppuccino coffee drinks and line of premium ice creams through its joint venture partnerships and offers a line of innovative premium tea produced by its wholly own subsidiary,Tazo tea company.
(2)More usage:Marketers can try to increase the amount,levels of frequency of consumption.They can sometimes boost the amount through packaging or product redesign.Increasing frequency of consumption require either identity additional opportunities to use the brand.Example: Pepto Bismol stomach remedies are in 40% of us households, but only 7% of people claim to have used them in previous 12 months.To expand usage and make the brand popular a holiday campaign linked it to party festivities and celebrations with the tagline"Eat,Drink and Be Covered",New ways to use the brand(to increasing frequency of consumption is to identity completely new and different applications.Food product companies have long advertised recipes that use their branded products in different ways).
Protecting Market Share:
Protecting market share is divided into two parts-proactive market share(responsive marketing,anticipative marketing,creative marketing) and defensive marketing(position defense,flank defense,preemptive defense,counter offensive defense,mobile defence,mobile defence,contraction defense).
Responsive marketer finds a stated needs and fills it, an Anticipative marketer looks ahead to needs customers may have in near future, a Creative marketer discovers solutions customers did not ask for but not ask for but to which they enthusiastically respond(creative marketers are proactive market driving firms).
(a)Position defense:position defense means occupying the most desireable in consumer's minds making the brand almost impregnable.
(b)Flank defense: The market leader should erect outposts to protect a weak front or support a possible counter attack.
(c)Preemptive defense:A more aggressive action, in this case first attacked the competitor.Another is to achieve broad market envelopment that signals competitors not to attack.
(d)Counter offensive defence:counter offensive is the exercise of economic or political clout.The leader may try to crush a competitor by subsidizing lower prices for vulnerable product with revenue from its more profitable products.
(e)Mobile defense:the leader stretches its domain over new territories through market broadening and market diversification.
(f)Contractive defense:Sometimes large companies can no longer defend all their territory.In planned contraction(also called strategic withdrawal),they give up weaker markets and resign resources to stronger one.
Increasing Market Share:
Increasing market share is depending to four factors-(a)The possibility of provoking antitrust action,(b)Economic cost,(c)the danger of pursuing the wrong marketing activities,(d)The effect of increased market share on actual and perceived quality.
(a) The possibility of provoking antitrust action:Frustrates competitors are likely to cry "monopoly" and seek legal action if a dominant firms makes further in roads.Example:Microsoft and Intel,they both are alway busy in their legal fight.
(b)Economic cost:that profitability might fall with market share gains after some level.
(c)The danger of pursuing the wrong marketing activities:new product activity,relative product quality,marketing expenditure.
(d)The effect of increased market share on actual and perceived quality:too many customers can put a strain on the firm's resources,hurting product value and serving delivery.