DEFENSIVE TACTICS- attempts to keep a competitor from taking away some of the companys present market share, under

onslaught of offensive tactics by the competitors. 1. Raise Structural Barriers- This involves the defense of a fortified position. This tends to be a weak defense because you become a sitting duck. It can lead to a siege situation in which time is on the side of the attacker, that is, as time goes by the defender gets weaker, while the attacker gets stronger. In a business context, this involves setting up fortifications such as barriers to market entry around a product, brand, product line, market, or market segment. This could include increasing brand equity, customer satisfaction, customer loyalty, or repeat purchase rate. It could also include exclusive distribution contracts, patent protection, market monopoly, or government protected monopoly status. It is best used in homogeneous markets where the defender has dominant market position and potential attackers have very limited resources. Fortify and Defend This strategy attempts to build barriers to entry for competitors. The purpose of defensive marketing strategies is to lower the inducement to attack. Firms frequently enter an industry because existing firms earn high profits. The higher the profits earned by incumbent firms, the higher the motivation to enter. Thus, the inducement to attack can be lowered by reducing the profit expectations of the entrant. This can be achieved by raising barriers to entry for new competitors. Erecting barriers usually hinders entry by new competitors because they will have to incur costs not born by existing competitors. The most common barriers to entry include economies of scale, product differentiation, capital requirements, switching costs, experience curve cost reductions, proprietary technology or patents, access to raw materials and other inputs, access to distribution channels, and location (Yannopoulos, 2007). Industries in which there are significant barriers to entry include the automobile, aerospace, and ship-building industries. Because of high barriers, entry is notoriously difficult in these industries. Fortification is based on the concept of the protected fort (Kotler, 1981). The idea is to have every area of the company or product protected leaving no weaknesses for the attacker to exploit (Kotler, 1981). Example. One example of market fortification is within General Foods coffee business. General Foods has entries in physical, price, and perceptual positions in the marketplace (Kotler, 1981). From decaffeinated coffees to premium brands, General Foods has complete coverage of the market. Because of such market domination, other competitors have few unserved or poorly served markets to attack (Kotler, 1981). 2. Increase Expected Retaliation- Companies often use signaling to announce their intention to take an action. Announcements can be made through interviews with the press, press releases, speeches, trade journals, newspapers, and other means. Such announcements may serve different objectives which are not necessarily mutually exclusive. They could signal commitment to the industry and therefore try to preempt or deter competitors. A defending firm can effectively keep potential entrants out of the industry by using the threat of retaliation. The higher the perceived probability of retaliation and its degree of severity, the lower the probability of attack by a challenger. Firms enhance their reputation for rigorous retaliation by the way they responded to past attacks, which signals their commitment to defend their market share. Other times, companies announce their intention to undersell their competitors. Future Shop, a large chain of consumer electronics in Canada, has publicly stated that it will not be undercut by competitors and that it will meet their prices. Announcements may be used to issue a threat that action will be taken if a competitor makes a certain move. For example, firms can announce that they will match a rivals prices, rebates, credit, or any other terms offered.

This involves countering an attack with an offense of your own. If you are attacked, retaliate with an attack on the aggressors weakest point. When attacked most market leaders will respond with a counterattack. Counterattacks can take many forms. In a counteroffensive, the leader can meet the attacker frontally or hit its flank or launch a pincer movement. An effective counterattack is to invade the attackers main territory so that it will have to pull back to defend the territory. A counterattack exploits the competitor's weaknesses where it may involve an attack on a defended terrain (Duro, 1987). This type of defense allows the attacker to move in and the defender capitalizes on the attackers mistakes (Duro, 1987). One method of counterattack is to aim the counterattack at the competitors source of cash (Kotler, 1981). 3. Reduce Inducement for Attacks4. Mobile Defense- This involves constantly shifting resources and developing new strategies and tactics. A mobile defense is intended to create a moving target that is hard to successfully attack, while simultaneously, equipping the defender with a flexible response mechanism should an attack occur. In business, this would entail introducing new products, introducing replacement products, modifying existing products, changing market segments, changing target markets, repositioning products, or changing promotional focus. This defense requires a very flexible organization with strong marketing, entrepreneurial, product development, and marketing research skills. In mobile defense, the leader stretches its domain over new territories that can serve as future centers for defense and offense through market broadening and market diversification. Market broadening involves shifting focus from the current product to underlying generic need Mobile defense occurs when there is a high degree of mobility in the defense which prevents the attacker from localizing and gaining forces for a battle (Duro, 1987). The basic idea of a mobile defense is to avoid holding unnecessary ground. Example. Petroleum companies get involved into oil, coal, nuclear and hydroelectric industries. Market diversification involves shifting into unrelated industries (Reynolds, Philips, cigarette companies, moved to produce beer, liquor, soft drinks and frozen industries) One example of mobile defense came in 1977 when the Japanese went beyond the narrow television receiver and produced video cassette recorders and tapes (Kotler, 1985). The Japanese did not limit their mobile defense to just products they also used mobile defense in their manufacturing strategy (Kotler 1985). Rather than keeping the manufacturing plants in Japan they also broadened their operations to off-shore facilities in Mexico and the Far East (kotler, 1985). Because of their mobility they have found lower labor costs, and new markets (kotler, 1985).