market follower strategy ppt

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MARKET FOLLOWER STRATEGY

Presented by: Sreelakshmi NairAnjali

Shipra

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The Concept Theodore Levitt argues that a strategy of a

product imitation might be as profitable as a strategy of product innovation.

“Innovative Imitation”-the innovator bears the expense of the product.

Achieve high profits. Creates a image of the product.

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“Conscious parallelism” are common in capital intensive and homogeneous product industry.

Product differentiation is low Price sensitivity runs high Offers similar to buyers by copying from

leaders Must know how to retain old customers

acquire new ones

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ClassificationCOUNTERFEITER

CLONER

IMITATOR

ADAPTER

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COUNTERFEITERThe best example of counterfeiting is selling

the originals via piracy.Also known as Black market follower

strategy. Music firms, Apple and Rolex watches have

been plagued by counterfeiter problem.

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Cloner:Emulates the leader’s products, name and

packaging with slight variation.Example: if you get watches from RADO as

RADA and bags from GUCCI as GUCCA then that is

cloning.

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Imitator:Imitation is the best form of flattery which

can cause the Leader a huge dent in the profit margins.

They make use of the hard earned brand equity and give a product with same characteristics at low price.

They offer a product with compromised quality.

Imitation jewellery is the best and largest example of imitation.

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Adapter: It is often termed as white collared market

strategy.They have similar products but try to adapt

from closest competition.They can soon become Market Leaders as

they can adapt, learn and improve. Cars like Alto, Zen are adapters and adapt

the best qualities from each other by changing the style of the automobiles.

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Advantages Can achieve higher profits since it did not

bear the innovation expenseCan sell the product in cheaper price and

attract more customers.Since customers are already aware of the

product the cost of educating the market is not required

Knowledge about the segment of the customers who use the product are available.

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Disadvantages Reward of all the work given to the market

leader It takes time to overtake the leaderThe follower is often a major target of attack

by challengers, it must keep its manufacturing costs low and its product quality and services high.

Little innovation is needed to improve the product which can lead to increase in manufacturing cost.

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