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Chapter 11: Competition
Terms in this set (28)
A market leader has the largest market share and usually leads in price changes. A Market leader should look for ___ _____ or more ____.
new customers; more usage
Market leader protecting: while trying to expand total market size, the dominant firm must defend its current business. The most constructive response is ___ ___.
Defensive Marketing Strategies
1. Preemtive defense
2. Flank defense
3. Position defense
5. Mobile defense
6. Contraction defense.
Types of defense: give up on weaker markets and reassign resources to stronger ones
Types of defense: Leader stretches its domain over new territories through market broadening and diversification.
Types of defense: Can meet the attacker frontally and hit its flank. After FEDEX watched UPS take over delivery it invested heavily in ground delivery. Another form is to exercise economic or political clout, lowering prices.
Types of defense: Erect outposts to protect a weak front or support a possible counterattack (Instead of tide Proctor and gamble has brands like gain and cheer).
Types of defense: Occupying the most desirable place in the market in consumers minds (crest, pampers)
Types of defense: to attack first with guerrilla action across the market. Achieve broad market envelopment that signals competitors not to attack (bank of america has 18,500 ATMS and 6,100 retail branches) Introduce a stream of new products and announce them in advance.
1. Frontal Attack
2. Flank Attack
3. Encirclement Attack
4. Bypass Attack
5. Guerrilla Attack
Challenger strategies: Attacker matches its opponent's product, advertising, price and distribution. The principle of force says the side with the greater resources will win.
Challenger strategies: The challenger spots areas where the opponent is underperforming. The other strategy is to uncover market needs.
Challenger strategies: Attempts to capture a wide slice of territory by launching a grand offensive on several fronts
Challenger strategies: bypassing the enemy altogether to attack easier markets.
Challenger strategies: Small, intermittent attacks, conventional and unconventional, including selective price cuts, intense promotional blitzes and occasional legal action.
A leader in a small market. They achieve high volume and have little or no interest in larger firms.
Characteristics of the Product Life Cycle
PLC: Sales show a downward shift and profits erode
PLC: A slowdown in sales growth because the product has achieved acceptance by most buyers. Profits stabilize or decline.
PLC: A period of rapid market acceptance and substantial profit improvement
PLC: A period of slow sales growth as the product is introduced in the market. Profits are nonexistent because of the heavy expenses of product introduction.
A basic and distinctive mode of expression appearing in a field of human endeavor. Can last for generations and go in and out.
A currently accepted or popular style in a given field. The length is hard to predict.
Fashions that come quickly into public view and are adopted with great zeal and decline very fast. Acceptance cycle is short.
Ways to increase sales volume.
1) Expand number of users
2) Increase usage rate among users
Expand number of users
1) Convert nonusers
2) enter new market segments
3) Attract competitors customers
Increase usage rate among users
1) use product on more occasions
2) Use more of the product on each occasion
3) use the product in new ways.
Critique of Product life cycle (PLC)
PLC are too variable in shape and duration to be generalized. The PLC pattern is self-fulfilling result of marketing strategies. Focuses on whats happening to an overall product rather than the overall market.