Lectures "Marketing management - Chapter 11: Dealing with competition" provides students with the knowledge: Industry analysis, competitor analysis, competitive strategies by market position, product life cycle strategies. Invite you to refer to the disclosures.
CHAPTER 11 DEALING WITH COMPETITION Nguyen Tien Dung, MBA Email: dung.nguyentien3@hust.edu.vn Chapter Questions How marketers identify primary competitors? How should we analyze competitors’ strategies, objectives, strengths, and weaknesses? How can market leaders expand the total market and defend market share? How should market challengers attack market leaders? How can market followers or nichers compete effectively? © Nguyễn Tiến Dũng Main Contents Industry Analysis Competitor Analysis Competitive Strategies by Market Position Product Life Cycle Strategies © Nguyễn Tiến Dũng Industry Analysis ● To identify opportunities and threats associated with the doing business in the industry ● To determine profitability and risks when doing business in the industry ● Tool: Five-force model by Michael Porter © Nguyễn Tiến Dũng Five-Force Model by Michael Porter © Nguyễn Tiến Dũng Five Forces Determining Segment Structural Attractiveness ● Industry competitors ● Potential entrant ● Suppliers ● Buyers ● Substitutes © Nguyễn Tiến Dũng Industry Concept of Competition ● Number of sellers and degree of differentiation ● Entry, mobility, and exit barriers ● Cost structure ● Degree of vertical integration ● Degree of globalization © Nguyễn Tiến Dũng Strengths and Weaknesses ● Share of market ● Share of mind ● Share of heart © Nguyễn Tiến Dũng Steps in Benchmarking ● Determine which functions or processes to benchmark ● Identify the key performance variables to measure ● Identify the best-in-class companies ● Measure the performance of best-in-class companies ● Measure the company’s performance ● Specify programs and actions to close the gap ● Implement and monitor results © Nguyễn Tiến Dũng Competitor Analysis ● 2.1 Identifying competitors ● 2.2 Identifying competitors’ strategies and objectives ● 2.3 Evaluating competitors’ strengths and weaknesses ● 2.4 Selecting competitors to attack and avoid © Nguyễn Tiến Dũng 10 Specific Attack Strategies ● Price discounts ● Improved services ● Lower-priced goods ● Distribution innovation ● Value-priced goods ● Manufacturing-cost ● Prestige goods reduction ● Intensive advertising promotion ● Product proliferation ● Product innovation © Nguyễn Tiến Dũng 28 3.3 Competitive Strategies for Market Followers ● Counterfeiter ● Cloner ● Imitator ● Adapter: Telepizza vs Domino Pizza © Nguyễn Tiến Dũng 29 Adapter: Telepizza ● Telepizza adapted Domino’s pizza delivery concept to Spain with much success © Nguyễn Tiến Dũng 30 3.4 Competitive Strategies for Market Nichers ● High margin strategy ● High volume strategy ● Single versus multiple niching strategies © Nguyễn Tiến Dũng 31 Niche Specialist Roles ● End-User Specialist ● Product-Line Specialist ● Vertical-Level Specialist ● Job-Shop Specialist ● Customer-Size ● Quality-Price Specialist Specialist ● Specific-Customer Specialist ● Geographic Specialist ● Service-Specialist © Nguyễn Tiến Dũng ● Channel Specialist 32 Examples ● ITW ● Zippo ● Digicel © Nguyễn Tiến Dũng 33 Nicher Strategies: The Case of Zippo Zippo has expanded its brand meaning to encompass “all flamerelated products” to ensure its long-term growth prospects © Nguyễn Tiến Dũng 34 3.5 Balancing Customer and Competitor Orientations ● A competitor-centered company focuses more on competitors’ action and sets strategies and plans to react competitors’ programs ● A customer-centered company focuses more on customer developments to setting up strategies © Nguyễn Tiến Dũng 35 Product Life-Cycle Marketing Strategies © Nguyễn Tiến Dũng 36 Special Types of PLCs © Nguyễn Tiến Dũng 37 Evidence of PLC ● New consumer durables show a distinct takeoff, after which sales increase by roughly 45 percent a year, but they also show a distinct slowdown, when sales decline by roughly 15 percent a year ● Slowdown occurs at 34 percent penetration on average, well before most households own a new product ● The growth stage lasts a little over eight years and does not seem to shorten over time ● Informational cascades exist, meaning people are more likely to adopt over time if others already have, instead of by making careful product evaluations One implication is that product categories with large sales increases at takeoff tend to have larger sales declines at slowdown © Nguyễn Tiến Dũng 38 © Nguyễn Tiến Dũng 39 © Nguyễn Tiến Dũng 40 Marketing Strategies: Decline Stage © Nguyễn Tiến Dũng 41 Special Patterns of PLCs © Nguyễn Tiến Dũng 42 ... defense ● Expanding market share © Nguyễn Tiến Dũng 21 Six Types of Defense Strategies © Nguyễn Tiến Dũng 22 Counter-offensive Strategy: FedEx vs UPS © Nguyễn Tiến Dũng 23 Market Leaders: Ariat Combining... into strategy © Nguyễn Tiến Dũng 16 2.3 Evaluating Competitors’ Strengths and Weaknesses © Nguyễn Tiến Dũng 17 Share of mind, Share of heart, and Share of market © Nguyễn Tiến Dũng 18 2.4 Selecting... when doing business in the industry ● Tool: Five-force model by Michael Porter © Nguyễn Tiến Dũng Five-Force Model by Michael Porter © Nguyễn Tiến Dũng Five Forces Determining Segment Structural