Download - 13-Classification of Firms on Market Share
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Classification of firms based on the rolesplayed in the target market
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Classification of firms based on the roles played in
the target market
40%
30%
20%
10%
Market Leader
Market Challenger
Market Follower
Market Nichers
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Characteristics: Market Leaders
Mostly one market leader.
Largest Market share in the relevant product market.
Leads the other firms in the price changes, new-product
introductions, distribution coverage, and promotional
intensity.
Unless the firm enjoys legal monopoly, it must maintain
constant vigilance.
A new product innovation by follower may loose the marketshare of leader.
Leader spends conservatively and challenger spends
liberally.
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Market Challengers
Second, third or lower rank in the industry.
Opt for two postures- attack the leader in an
aggressive bid for further market share. Or peacefulco-existence.
Set high aspiration , leveraging their resources, while
market leader runs the business as usual.
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Characteristics: Market followers
Achieve high profits as it did not bear any of the
innovation expense.
Prefer to follow rather than to challenge the market
leaderOffers similar offers to buyers, copying the leader.
Market share show high stability.
Should hold the current customers and win a fairshare of new customers.
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Market Nicher
Leader in a small market or niche.
Avoid competing with large firms by targeting small
markets.
Companies with low shares of total market can behighly profitable through smart niching.
Market nicher knows the target customers so well
that it meets their needs better than other firms
selling casually.
Niche marketer a high price, achieves high margin,
whereas the mass marketer achieves high volume.
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Market Leader Strategy
1.Expanding the total Market.
New Customers
More Usage
New and Different applications
2.Defending the Market Share
Continuous innovations.
A leader leads the industry in new products,
customer services, distribution effectiveness and costcutting.
Six defense strategies.
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Six defense strategies of a Market leader
Position Defense
Flank Defense
Pre-emptive Defense
Counter offensive defense
Mobile defense
Contraction Defense
3.Expanding the market share
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Market Challenger Strategies
1.Defining the strategic Objective and OpponentsWhom to attack?
Attack market leader.
Attack firms of its own size.
Attack small local and regional firms.
2. Choosing a general attack strategy
Frontal Attack
Flank Attack (geographical or segmental)Encirclement Attack
Bypass Attack
Guerrilla Warfare
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Attack Strategies
Company
Competitor
Guerrilla
attack1.Frontal attack
2.Flank Attack
4.Bypass Attack
3.Encirclement attack
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Market FollowerStrategies
Counterfeiter
Cloner
Imitator
Adaptor
Market-Nicher StrategiesThree tasks Creating Niches, Expanding Niches and
Protecting Niches.Multiple niching preferable to single niching.
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Balancing Customer and Competition
Orientation
Competitor-centered company
Customer- centered company
Market- centered company
A company need to be market oriented ,paying balanced
attention to both customers and competitors.
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Read: pg 239
Responsive MarketerAnticipative Marketer
Creative Marketer