market follower strategy ppt
TRANSCRIPT
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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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