Strategy of challenger, leader, follower and nicher

INTRODUCTION
Marketing strategy is defined by David Aaker as a process that can allow an organization to concentrate its resources on the optimal opportunities with the goals of increasing sales and achieving a sustainable competitive advantage. Marketing strategy includes all basic and long-term activities in the field of marketing that deal with the analysis of the strategic initial situation of a company and the formulation, evaluation and selection of market-oriented strategies and therefore contribute to the goals of the company and its marketing objectives

Market leader strategy

Expanding the total market New user New uses More usage

Defending market share Position defence Flank defence Preemtive defense Counter offensive defence Mobile defense Contraction defensive

Stimulate selective demand among later adopters

Head-to-head positioning against competitors Develop a second brand or product line with features or price more appealing competitive offerings or potential to a specific segment of potential customers offerings. Make product modifications or improvements to match or beat superior' : competitive offerings (confrontatian strategy)

 Meet or beat lower prices or heavier promotional efforts by competitors when necessary to retain customers and when lower unit costs allow (confrontation strategy). When resources are limited relative to a competitor's, consider withdrawing from smaller or slower growing segments to focus product development and promotional efforts on higher potential segments threatened by competitor (contraction or strategic Differentiated positioning against Develop multiple-line extensions or brand offerings targeted to the needs, competitive offerings or various potential user applications or geographical segments (market expansion strategy). Build unique distribution channels to more effectively reach specific
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segment! of potential customers (market expansion strategy). Design multiple advertising and/or sales promotion campaigns targeted at specific segments of potential customers (market expansion strategy

Retain current customers

Maintaining/improving satisfaction and loyality
Increase attention to quality control as output expands.and loyalty. Continue product modification and improvement efforts to increase customer benefits and/or reduce costs. Focus advertising on stimulation of selective demand; stress product's superior features and benefits; reminder advertising.

 Increase sales force's servicing of current accounts; consider formation of national or key account representatives to major customers; consider replacing independent manufacturer's reps with company salespeople where appropriate. Expand post sale service capabilities; develop or expand own service force, or develop training programs for distributors' and dealers' service , expand parts inventory; develop customer service hotline or website

Encouraging/simplifying repeat purchase

Expand production capacity in advance of increasing demand to avoid stockouts Improve inventory control and logistics systems to reduce delivery times. Continue to build distribution channels; use periodic trade promotions to gain more extensive retail coverage and maintain shelf-facings; strengthen relationships with strongest distributors/dealers.

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Consider requirements customer:

negotiating long-term contracts with major

Consider developing automatic reorder systems or logistical alliances

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Reducing attractiveness switching

Develop a second brand or product line with features or price more appealing to a specific segment of current customers Develop multiple-line extensions or brand offerings targeted to the needs of several user segments within the market Meet or beat lower prices or heavier promotional efforts by competitors-or try to preempt such efforts by potential competitors-when necessary to retain customers and when lower unit costs allow

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Market challenger
A market challenger must first define its strategic objective It can attack the market leader It can attack firms of its own size It can attack firms smaller in size

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Attack strategy
Frontal attack Flank attack Encirclement attack By pass attack Guerilla warfare

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Head to head positioning

Develop products with features and/or performance levels superior to those of the target against competitor's offering competitor Draw on superior product design, process engineering, and supplier relationships to achieve lower unit costs. Set prices below target competitor's for comparable level of quality or performance, but only if low-cost position is achieved. Outspend the target competitor on promotion aimed at stimulating selective demand: Comparative advertising appeals directed at gaining a more favorable positioning than the target competitor's brand enjoys among customers in the mass market.
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Sales promotions to encourage trial if

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offering's quality or performance Outspend the target competitor on trade promotion to attain more extensive retail coverage, better shelf space, and/or representation by the best distributors/dealers Outperform the target competitor on customer service Develop superior production scheduling, inventory control, and logistics systems to minimize delivery times and stockout. Develop superior post sale service capabilities. Build a more extensive company service force, or provide better training programs for distributor/dealer service people than those of target competitor

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Technological differentiation

Develop a new generation of products based on different technology that offers superior performance or additional benefits desired by current and potential customers offering in its primary in the mass market (leapfrog strategy).

Build awareness, preference, and replacement demand through heavy introductory promotion: Comparative advertising stressing product's superiority

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 Sales promotions to stimulate trial or encourage switching. Extensive, well-trained sales force; heavy use of product demonstrations in sales presentations. Build adequate distribution through trade promotions and dealer training programs

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Differentiated positioning
Develop a differentiated brand or product line with unique features or prices that is focused on untapped or more appealing to a major segment of potential customers whose needs are not met underdeveloped segments. by existing offerings (flanking strategy). Develop multiple line extensions or brand offerings with features or prices targeted to the unique needs and preferences of several smaller potential applications or regional segments (encirclement strategy).

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Design advertising, personal selling, and/or sales promotion campaigns that address ,(, specific interests and concerns of potential customers in one or multiple underdeveloped segments to stimulate selective demand. Design service programs to reduce the perceived risks of trial and/or solve the unique problems faced by potential customers in one or multiple underdeveloped segments (e.g., systems engineering, installation, operator training, extended warranties, service hotline, or website).

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Choosing a specific strategy

Price discount Lower price goods Prestige goods Product proliferation Product innovation Improved service Distribution innovation Manufacturing-cost reduction Intensive price promotion

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Market follower strategy

Market Follower strategy is a strategy of product imitation. The innovator bears the expense of developing the new product, bringing in the technology, breaking entry barriers and educating the market. However, another firm can come along and copy or improve on the new product. Although it probably will not overtake the leader, the follower can achieve high profits because it did not bear any of the innovation
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expense. Many companies prefer to follow rather than challenge the market leader. Many runner-up companies do not challenge the market leader The four follower strategies are as given below: 1. Counterfeiter: Copies the leaders product and packages and sells it on the black market. E.g.pirated music/ movie CDs 2. Cloner: Copies the leaders products as it is as well as name, packaging with slight variations.

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3. Imitator: Copies some of the things from leaders product but maintains difference in packaging, and other factors. 4.Adaptor: Launches improved products over that of the innovators

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Market nichers
Nichers are small firms that target small markets of little or no interest to larger firms. But, these firms can be highly profitable through smart niching. In a study of hundreds of business units, the Strategic Planning Institute found that return on investment average 27 in small markets, but only 11% in larger markets. (E.R. Linneman and L.J. Stanton, Making Niche MarketingWork, McGraw-Hill, 1991) The niche specializations include: End user segments: Specialising on

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particular end user segments Vertical segments: Concentrated at a level in the production-distribution value chain Customer size segments: Selling either to small, medium size or large customers Specific customer servicing: Selling to some major customers. Even only one or two customers. Geographic segments: Selling only in certain localities not served well by broad market firms

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Specific products: Selling only one product line or product line. Giving a big choice to choose to the buyers. Specific product features: Specializing and offering a particular product feature Job shop production: Customized manufacture for individual customers. Quality segment: Operating at low- or high- quality segments. Price segment: Operating at low- or highprice segments

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High service segment: Offering features not offered by other firms Channel segment: Serving only one or two distribution channels

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BIBLIOGRAPHY
smartamarketing.wordpress.com www.wikipedia.com books.google.co.in www.management101.info/marketing_str ategies

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