SESSION - 5

DEALING

WITH THE COMPETITION

Trendy & high end designer lines :

Calvin Klein, Tommy Hilfiger & GAP

Traditional brands:
Western Wranglers & Urban Lee cooper

Levi Strauss
$7.1billion (1996) US Sales $4 billion (2003)

Classic 501
Popular & lower-priced private labels: JC Penneys Arizona & Hip/ youthful lines: American Eagle, Bugle Boy, JNCO, Lucky & Diesel
Redesigned strategy Premium Red Tab line upscale department stores like Nordstrom & Neiman Marcus

Sears Canyon River Blues

Signature brand discount stores like Wal-Mart

Entry Barriers Economies of scale product differences Brand identity Switching costs Capital requirements Access to distribution Absolute cost advantages Proprietary learning curve
Access to necessary inputs Proprietary low-cost product design

Rivalry Determinants Industry growth

New Entrants

Product differences Brand identity Switching costs Informational complexity Diversity of competitors Corporate stakes Exit barriers

Threat of New Entrants

Bargaining Power
of Suppliers Suppliers

Industry Competitors

Bargaining Power
of Buyers Buyers

Threat of Determinants of Supplier Power Differentiation of inputs Switching costs of suppliers and firms in the industry Presence of substitute inputs Supplier concentration Cost relative to total purchases in the industry Impact of inputs on cost or differentiation Threat of forward integration relative to threat of backward integration by firms in the industry Substitutes Intensity of Rivalry Determinants of Buyer Power

Bargaining Leverage Buyer concentration vs. firm concentration Buyer volume Buyer switching costs Substitute products Buyer information

Substitutes

Price Sensitivity Price/total purchases Product differences Brand identity Impact on quality/ performance

Source: Porter's 5 Forces - Elements of Industry Structure (source: Porter, 1985, p.6)

Determinants of Substitution Threat Relative price performance of substitutes Switching costs Buyer propensity to substitute

Porters 5 Forces model: Buyers bargaining power

Buyers are Powerful if: Example Buyers are concentrated - there are a few buyers Ministry of Defense purchases from with significant market share defense contractors Buyers purchase a significant proportion of Wal-Mart and Sears' large retail market output - distribution of purchases or if the provides power over manufacturers product is standardized Buyers possess a backward integration threat - can Large auto manufacturers' purchases of threaten to buy producing firm or rival tires Buyers are Weak if: Producers threaten forward integration - producer can take over own distribution/retailing Significant buyer switching costs - products not standardized and buyer cannot easily switch to another product Buyers are fragmented (many, different) - no buyer has any particular influence on product or price Example Movie-producing companies have integrated forward to acquire theaters like Rajshree, PVRs.

Buying of Medicines.
Confectioneries

Producers supply critical portions of buyers' input Intel's relationship with PC manufacturers - distribution of purchases

Porters 5 Forces model: Suppliers bargaining power

Suppliers are Powerful if: Forward integration threat by suppliers Example Chemical manufacturers started producing pharmaceutical products Drug industry's relationship to hospitals e.g. high cost surgical items

Suppliers concentrated Significant cost to switch suppliers

Suppliers are Weak if: Many competitive suppliers - product is standardized Purchase commodity products

Microsoft's relationship with PC manufacturers

Example Confectionery products like cookies, breads etc. Grocery store brand label products

Backward integration threat by purchasers Tea producers relationship to Tea estate companies Concentrated purchasers Garment industry relationship to major retail stores like Wal-Mart

Porters 5 Forces model: Barrier/ Threat to entry

Easy to Enter if there is: - Common technology Difficult to Enter if there is: - Patented or proprietary know-how

- Little brand loyalty

- Access to distribution channels - Low scale threshold (break even)

- Difficulty in brand switching

- Restricted distribution channels - High scale threshold

e.g. Confectionery.

- e.g. knowledge based industries.

Easy to Exit if there are:

- Salable assets - Low exit costs - Independent businesses e.g. exclusive distributors, ancillary manufacturers.

Difficult to Exit if there are:

- Specialized assets - High exit costs - Interrelated businesses e.g. Capital intensive industries.

Competitive analysis of Global Airline Industry

Rivalry within Airline Industry:
Competition is intense Several airlines are operating on the same route. Compete aggressively on offering like fares, frequent flyer membership privileges etc.

Threat of New Entrants:

Require capital investment but due to offerings like long-term bank loans on less interest to business sectors, increased the threat of new entrants.

Threat of Substitutes:
Options of cheaper travel means like trains etc. Domestic airlines have greater threats than the international carriers.

Bargaining power of Suppliers:

Limited suppliers i.e. Boeing and Airbus.

Bargaining power of Buyers:

Customers have higher bargaining power in the domestic airlines compared to the international routes.

Driving forces in the Porters 5 Forces Model

Directions of New Competition

Global competitors entering in new markets/ categories Online competitors seeking cost-effective ways to expand distribution

Intensity of new competitive forces

Brand extensions from strong mega brands leveraging their strengths to move into new categories

Private labeling and store

brands designed to provide

low-priced alternatives

Analyzing Competitors
Strategies Competitor Actions Objectives

Reaction Patterns

Strengths & Weaknesses

Analyzing Competitors cont

Company need to gather information about competitors strengths and weaknesses on three parameters: Share of market: competitors share of the target market. Share of mind: percentage of customers remember competitors features. Share of heart: percentage of customers prefer competitors features.

Competitor Analysis
Identifying Competitors Assessing Competitors
Determining Objectives
Identifying Strategies Assessing Strengths and Weaknesses Estimating Reaction Patterns

Selecting Competitors to Attack and to Avoid

Competitor Analysis
The Strength of the Competitors positioning What market share does each competitor have? (secondary sources) How strong is each competitors image? (primary sources- highly sensitivity) how is the financial performance of each competitor? (secondary sources) Is there any focus or areas of concentration of competitors? (published & primary sources highly sensitive data) How is each element of marketing mix deployed by competitors? (secondary & primary sources) How satisfied is competitors customer base? (primary sources- highly sensitive data) What are the loyalty levels exists for competitors? (primary sources- highly sensitive data) How satisfied are each distribution channels with the competitors (primary sourcesmoderately sensitive data)

The Strength of the Competitors offerings

The Strength of the Competitors resources Understanding the competitors strategies

Size of the resource base. Level of efficiency of production base Effectiveness of product development process support of R&D. What is the competitors strategic motive? What are their moves and reactions?

Kodaks products Instant cameras & instant film Photogra phic paper

Principal competitors Polaroid

Competitive environment for Eastman Kodak products in 1970s

Kodaks market position Intensity and bases of competition Likelihood of new entrants High Challenger to a well-established leader High & increasing with greater emphasis on innovation

Kodaks core strategy Penetration pricing to sell

cameras faster
than competitors Medium Sustaining share by emphasizing quality of Kodak paper & educating consumers Separate sales & service networkleveraging firms image and marketing capabilities in microfilm equipment area

Fuji Photo Film Co.

Leader but being

High the attack is due to stress on lower prices & quality Very high due to greater emphasis to innovation, cost & service

threatened by Fuji
& other Japanese companies

Office copiers

Xerox, IBM, 3M

Late entrant to highly competitive market- Xerox held 75% share

Very high

(from
Japanese firms)

Industry Competition
Number of Sellers & Degree of Differentiation Entry, Mobility, Exit barriers

Cost Structure
Degree of Vertical Integration Degree of Globalization

Industry Structure types

Absolute Monopoly: Due to patent protection, license, economies-of-scale: only one firm provides the product or service. (e.g. Pharmaceutical Co.s formulations) Differentiated Oligopoly: few firms produce specialized products- partially differentiated. (e.g. Zhandu & Dabur Chawanprash)

Pure Oligopoly: few firms produce the same product (e.g. BHEL & Cromptons - Switchgears division)
Oligopolistic: Small number of producers who often act together to control the supply of a particular good and its market price It is dominated by a few large suppliers who are

interdependent on each other, before making any pricing and investment decisions. e.g. OPEC (The Organization of the Petroleum Exporting Countries, twelve countries made up of Algeria, Angola, Ecuador, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, UAE
and Venezuela) is an example of Oligopolistic since few countries control the production of oil. Monopolistic competition: many firms offer differentiated product/ service. (e.g. Banking, Insurance, Mutual Fund Companies) Pure competition: numerous firms offer the same product/ service. (e.g. reaching a stage similar to pani-puri wallas)

Number of Sellers & Degree of Differentiation

Pure Monopoly: local cable network Oligopoly: Pure oligopoly like Oil, steel lower prices can only sustain market pie for long run; Differentiated oligopoly like autos, camera partially differentiated in quality, features, style & services. Monopolistic: Many competitors differentiate clearly on offers, concentrate on specific market segments and charge customized prices like restaurants, ethical drug manufacturers etc. Pure competition: Many competitors offers the same product/service to many customers like commodity markets.

Five Industry Structure types

Differentiated product
ONE

Undifferentiated product

Number of Sellers

1. Pure Monopoly

FEW

2. Differentiated 3. Pure Oligopoly Oligopoly

4. Monopolistic 5. Pure Competition Competition

MANY

Entry, Mobility & Exit barriers

Entry Barriers:
High capital requirements Economies-of-scale

Patents & license requirements

Scarce locations & raw materials Scarce distributors/ channels Reputation & trust factor

Mobility Barriers: heavy investment industries (infrastructure) are location

specific mobility is difficult compare to other industries.

Exit Barriers:
Legal obligations
Capital blockage/ investment Government restrictions Lack of alternative opportunities

Barriers and Profitability

Exit barriers Entry Barriers Low Low, stable Low returns High, stable High returns High Low, risky returns High, risky returns

Cost Structure
Heavy manufacturing high raw material costs. Confectionery & FMCG high

distribution & marketing costs.

Degree of Vertical Integration

Backward or Forward integration: Oil companies (Reliance Industries Ltd,

RIL) Oil exploration, Oil drilling, Oil

refining, Chemical manufacturer & service stations.

Degree of Globalization
Nature of business like Oil, Aircrafts,

Cameras, Steel companies etc need

to grow fast across geographies to share risk and achieve economies-of-

scale across markets maintain the

pace of technological inducements.

Analyzing competitors: Strategic Groups

High
Group A Narrow line Lower mfg. cost Very high service High price Group B Full line Low mfg. cost Good service Medium price
GE, Whirlpool & Sears Planet Health, Dialforhealth (Zydus), Apollo chains/ GM & Ford (Automobiles)/ Haldiram (Mixtures)

Quality

Group C Moderate line Medium mfg. cost Medium service Medium price
V-mart, Big Bazar

Confectionery shops (local), Mother Dairy (Milk variants)

Low

Group D Broad line Medium mfg. cost Low service Low price

High

Vertical Integration

Low

Blue Line Strategy*

*Prof. Chan Kim & Prof. Renee Mouborgne

Example: A highly competitive Industry

The American Wine Industry

What the industry offers?

Premium Wines
Strategic Groups

Budget Wines

Massive Choice

American Wine Industry

3rd largest in world: worth $20 billion Californian makes 66% - the rest is from Italy, France, Spain, Chile, Argentina, Australia Exploding number of new wines new vineyards in Oregon, Washington, New York Customer base stagnant 31st in the world in per capita consumption!

American Wine Industry

Top 8 producers had 75% of the market; 1600 had the remaining 25%

$ millions spent in marketing intense competition Sever price pressure

The dominant growth strategy was towards premium wines more complexity, better image, more prestigious vineyards, number of medals won at wine festivals.

Premium and Budget Wines

Offering Level vs. Wine Drinkers Expectations
Very high

High

Normal

Low

Very low

Nonexistent

What people said

It is too confusing and complex Wine descriptions and terminology The shopping experience (lack of fun) The lack of clear guidance on what to buy and drink Thus, non-influential for non customers (the large majority of the US population who were not wine drinkers)

Yellow Tail created a Blue Ocean

Premium
Creating a Blue Ocean

Budget

Yellow Tail Strategy

Eliminated: Complex terminology and distinctions, Above the line marketing

Reduced: Wine complexity and Wine range

Raised: Price versus Budget Wines, Simplicity of retail store environment, Enthusiasm of Sales People Created: Easy drinking, Ease of selection, Sense of fun and adventure

Yellow Tail Value Curve

Very high

High

Normal

Low

Very low

Nonexistent

Casella Wines: How they applied Blue Ocean Strategy?

Casella Wines, an Australian winery, looked at the demand from drinkers of beer, spirits and ready-to-drink cocktails (3 times the US consumers of Wine) Redefined the wine industry with fun and adventure, nontraditional wine that is easy to drink. Offered and positioned as Social drink accessible to everyone i.e. beer, cocktail and other drinkers of non-wine beverages. In 2 years, the fun and social drink (Yellow tail) emerged as the fastest growing brand in the history of Australian and US Wine industries. By Aug 2003, it was number 1 Red Wine in 730 ml bottle sold in US ahead of all the California labels with average annual sales of 4.5 million cases. Company found that, US drinkers reject wine because of complicated taste and is difficult to appreciate. Beer and ready-to-drink cocktails were much sweeter. They offered wine which was soft in taste and easily available like beer and ready-to-drink cocktails. They introduced primary flavors and fruits flavors which provide sweet taste and customer feel fresher and would like to enjoy another glass of wine without thinking.

Results
No 1 imported wine (outsells France and Italy) Fastest growing wine in the history of the USA industry: New consumers of wine

Jug drinkers trade up

Premium wine drinkers trade down

Industry criticizes them at first

New wine gives it a best buy for value; winning wine awards.

Summary
Conventional Logic
Industry Assumption Strategic Focus

Blue Ocean Logic

Industry condition can be shaped.

Industry conditions are given

Build competitive advantages to beat the competition.

Create an equity and buyer value to dominate and sustain the market.

Customers

Retain and expand the customer

Go for the mass of buyers Focus on key customer value

base through further segmentation

and customization. Focus on existing customer differences.

Summary
Conventional Logic
Assets & Capabilities

Blue Ocean Logic

Think free from a companys
existing assets and capabilities. Ask, what if we start anew? Think in terms of buyers solution even if that overrule the industry.

Think in terms of a companys

existing assets and capabilities. Build on what it has.

Product/ Service offerings

Think in terms of
products/services offered by the industry. Seek to maximize the

Seek to solve buyers major

problems/compromises in using the products/services of the industry.

value out of these offerings.

Four Actions to create a Blue Ocean

Raise What factors should be raised well beyond the industry standard?

Eliminate

Create What factors should be created that the industry has never offered?

What factors should be eliminated that the industry has taken for granted?

Reduce What factors should be reduced well below the industry standard?

Market Structure & Strategies

Microsoft (softwares), Gillette (razor blades), LG (consumer electronics) Kmart Wal-Mart, Nokia Motorola, Pepsi - Coca-Cola
Bigbazar Superbazar (Retail), GodrejWhirlpool (refrigerator), HMT-Titan

BMW, Tanisq, Kingfisher Airlines

Market nicher

Market Leader

Market Challenger

Market Follower

Expand Market Defend Market Share Expand Market Share

Attack leader

Imitate

Specialize

Competitive Positions
Competitive Positions
Firm with the Largest Market Share

Competitive Strategies
Expand Total Market Protect Market Share Expand Market Share Full Frontal Attack Indirect Attack

Market Leader

Market Challenger
Runner-Up Firms that Fight Hard to Increase Market Share

Runner-Up Firms that Want to Hold Their Share Without Rocking the Boat Firms that Serve Small Segments Not Being Pursued by Other Firms

Market Followers

Follow Closely Follow at a Distance By Customer, Market, Quality-Price, Service Multiple Niching

Market Nichers

Strategies for Market Leaders

Market Leadership

Expansion of the Overall market

Defending the Existing market share

Expansion of the Current market share

Targeting customer groups that currently are non-users Identifying new uses for product/service

Increasing usage rates

Strong market positioning Development & refinement of competitive advantages Continuous product & process innovation proactive Heavy promotions Strong customer relations Strong channel relations

Heavy

promotions Improved distribution Price incentives product portfolio expansion Mergers & Takeovers Geographic expansion Distribution expansion

Stage 1: Expansion of Overall Market

Strategy: Search for new users HONDAs Strategies for Indian Markets Year & Target Offer & promotional emphasis Strategy Customers
Honda increased its sales by targeting groups that Developed range of smalltraditionally had never economic-light weight bought motorcycles. motorcycles

1960s-1970s:

heavy advertising giving emphasis to convenience and style

1980s:
identified potential for selling motorcycles delivering a fashion symbol styling become relevant repositioning.

middle-aged executive market

Offer: Series of larger motorcycle. Supported by heavy advertising emphasis on youthful values.

Stage 2: Expansion of Overall Market

Strategy: New Uses
Company Du PontsNylon Initial uses Reformulated/ redefined uses

used as synthetic fibre for used for shirts, tyres, carpets, various parachutes industrial and engineering uses

Teflon lubricants and Oils

used as high American space programme

for applications in protection for fabrics, cloths and carpets.

performance lubricant for cooking and motor oils;

Stage 3: Expansion of Overall Market

Strategies: Greater usage levels (existing users increasing usage rates) * Procter & Gamble (P&G)

Head & Shoulders Shampoo

Basis of promotion: two applications were more

effective than one.

Preity Zinta Brand Ambassador

9 billion shampoo market

Procter & Gamble (P&G) Head & Shoulders Shampoo

3. Feeling her freshly washed hair Preity comments, "Itne soft baal, kya aap
1. The ad opens with a product shot of a Head & Shoulders shampoo bottle. 2. In the next scene, Preity Zinta is shown washing her hair with the shampoo.
5. ...Head & Shoulders smooth and silky se. Yeh dandruff hundred percent hataye aur moisturise bhi karen, baal rahe soft subah se raat tak." 8. At this the two suddenly wake up and smile sheepishly - "Head & Shoulders smooth and silky, dandruff free soft baal, subah se raat tak."

nahin chahte yeh ehsas din bhar rahe?"

4. Walking before the photographers, the actress showing off her hair. "Paaiye dandruff free soft baal, dono ek saath...

6. It is work time and the star's coactor too busy admiring the former's hair, fails to hear the director

7. Seeing the two actors carrying on with the scene, the director has to once again scream, "Cut" and give them a jolt.

saying, "Cut."

Strategies of Market Leader: 1. Expanding the total market

New customers: those who might have use it but occassionally (market-penetration strategy chocolates); those who had never used it (new market segment strategy filtered vs. instant coffee Nescafe); or new geographical locations (geographical-expansion strategy- McDonalds).

More or additional usage: soft drinks and snacks markets identify opportunities/ gaps in HHs schedule.

Strategies of Market Leader: 2. Defending the Market Share

Caterpillar become leader in the construction-equipment market by wider service, consistent performance and premium pricing being challenged by players like Komatsu, Hitachi and many others. Co. adopted following strategies: Consistent performance: high quality outputs every time, reliability & durability, identifying buyer considerations/ preferences etc. Extensive & efficient dealership network: larger penetration to serve buyer at all possible market points. Superior service: enhancing the concept of product/service over time both by capturing the market expectations and analyzing the market trends. Full-line strategy: provide wide range of products/ services to provide a one-stop shopping. Feedbacks: prompt responses at regular intervals to gauge the direction of performance.

Strategies of Market Leader: 2. Defending the Market Share

Defending market share
RESPONSIVE MARKETING
Concentrate on Stated/explicit needs and serve accordingly
e.g. pdt. categories like milk, commodities like sugar, salt etc.

cont

Satisfying
customer needs

CREATIVE MARKETING
Discovers & produces pdt./ service solutions, to which customer likely to response positively
e.g. Sony introduced many pdts. like Walkmans, VCRs, Videocameras, and CDs.

ANTICIPATED MARKETING
Predicting the future probable needs of the customers

e.g. HLLs toothpastes based on research on herbal, salts and other natural ingredients, & Nokia mobile phones etc.

Defense Strategies
Market leader uses the strategies to:

reduce the probability of present or

future attack. divert attacks to less threatening areas. lessen the intensity of competition.

Defense Strategies
(2) Flank defense

(3) Preemptive

defense

Attacker

(4) Counteroffensive defense

(1) Position defense Defender

(6) Contraction defense

(5) Mobile defense

Six Defensive Strategies

Position Defense: building superior brand power and making the name unique in the market. e.g. Nescaf. Flank Defense: to protect a weak front or use as counterattack. e.g. HLLs Surf Excel powder price hike from Rs. 19 to Rs. 20 to consolidate the position in detergent market specially against small players in the Indian marketprotect and leverage brand identity. Preemptive Defense: Attack before the competitor starts its offense. e.g. ICICI Banks ATM networks and core banking across branches keep their local and regional banks competition on check, and Microsofts preannouncement approach on new software launch in future force smaller firms to concentrate on other segments.

Six Defensive Strategies

cont

Counter-offensive Defense: Attack the competitor from front or protect the weak front (Flank attack). e.g. US Automobile companies often launch a counteroffensive attack against Japanese counterparts in their markets for the disturbances that had been created by them in US market. Mobile Defense: Market leader stretches/ leverage its strengths into new sales territories can serve for future centers for defense & offense market broadening like Reliance from Petroleum into Energy (using R&D for Oil, coal, hydroelectric and chemicals), and market diversification like ITC from Cigarettes into e-choupals, garments etc. Contraction Defense: When it is difficult to defend the old territories, leader go for planned contraction (strategic withdrawal) giving up weaker/ unprofitable territories and reassigning resources to stronger territories - like US companies relocating their operations from Europe to emerging economies like India & China.

Major Strategic ObjectivesMarket Challenger

Firms attack the leader to grab further market share - South Korean companies like LG (TV and AC markets), Hyundai, Samsung etc. Out-innovate the leader across the segments - Xerox took copier market from 3M by providing better copier solutions, later Canon grab share of Xerox by introducing desk copiers.

Attack Strategies
(4) Bypass attack (2) Flank attack Attacker (1) Frontal attack (3) Encirclement attack (5) Guerilla attack

Defender

Attacking Strategies
Frontal Attack: attacker concentrate on leaders product ranges, advertising, price & distribution like Pepsi-Coca Cola, HLL-P&G. Flank Attack: Hit competitors weak front at two strategic dimensions geographic and segmental. Geographical like IBMs rival Honeywell set-up sales branches in smaller cities, that were not targeted by IBM. Segmental like Japanese automobile co.s did against US auto makers by developing fuel-efficient cars.

Attacking Strategies

cont

Bypass Attack: Indirect assault strategy bypass the rival and attack the easier markets to broaden the resource base and share the risk. Can be done through:
Diversifying into unrelated product categories Diversifying into new geographical areas Launch new technologies to enhance existing products

e.g. Pepsi used bypass strategy against Coke by:

Purchasing the Orange juice giant Tropicana for $3.3 billion in 1998 which is double the market share of Coca Colas Minute Maid. Acquired The Quaker Oats Co. for $14 billion in 2000 Gatorade thirst quenchers (health drink) captured huge share from Coca Colas Powerade.

Attacking Strategies

cont

Encirclement Attack: Capture large proportion of leaders share by launching massive offensive attack on several fronts. Use when challenger commands superior resources/ coverage. Mohans against Kelloggs Cornflakes in India based on price points and distribution coverage from groceries to organised chains. Guerrilla Attack: Launching small and irregular attacks to make competitor tired to secure permanent foothold in the market by both conventional & unconventional means like price cuts, intensive promotions etc. e.g. small Generic players against the Ethical drug manufacturers.

Specific Attack Strategies

Price-discount Super Bazar vs. Big Bazar daily price offers across categories. Cheaper goods/ services (low quality) Nirma, SpiceJet & IndiGo. Value priced goods/services Nirmas Nima soap, Subhiksha, Air Deccan. Prestige goods (high quality-premium price) Samsung India launch Plasma TVs to attack the Sonys markets. Product proliferation (large pdt. variety more choice) Asian Paints against ICI paints. Product innovation 3M entered new markets through breakthrough technologies into their product ranges.

Specific Attack Strategies cont

Improved services ICICI Bank offers better ATM and core Banking coverage against HSBC in India. Distribution innovation Dell vs. other traditional rivals like Compaq, HP, and IBM.

Reduced Manufacturing cost US automobile co.s

operations in India to sustain their share in developed

markets like US, Europe.

Intensive advertising promotion Pepsi & Coca Cola
wars.

Market Follower Strategies

Four broad strategies adopted are: Counterfeiter: Duplicated leaders products and sell in the parallel or grey market like general generic drugs, Chinas toy manufacturers. Cloner: Use the leaders products, name, packaging with slight variations like electric fittings, pipe fittings at local markets. Imitator: copy few things but also maintains differentiation in packaging, promotions, & pricing like Domino Pizza vs. Pizza Hut. Adapter: Adapt with better offer or improved version of leaders products launch in the same or different markets Kissan vs. Maggis Tomato Ketchup.

Nichemanship
End-user specialist (price premiums earned by retailers like Pantaloons and similar others) Vertical-level specialist (chemical or drug companies) Customer-size specialist (M80 mopeds in rural India being neglected by big players) Specific-customer specialist (BHEL, Crompton Ltd) Geographic specialist (Wagh Wakri tea in Gujarat)

Nichemanship
Parker)

cont

Product or product-line specialist (Levis, Peter England,

Product-feature specialist (few Insurance Co. only cover

Marine insurance)

Job-shop specialist (customised) (Dell, 7-Elevens)

Quality-price specialist (HP, Apple high quality & high price computer systems & peripherals) Service specialist (Banks having -evening branches) Channel specialist (Nikes & Addidas exclusive outlets)

Balance b/w Customers & Competitors

Customer
+ Identify opportunities + Long-run profit + Emerging needs & groups

Competition
+ Fighter orientation + Alert against future moves + Exploit weaknesses - Reactive

Developing Competitive Marketing Strategies

Basic Competitive Strategies

Overall Cost Leadership

Focus Middle of the Road

Differentiation

Developing Competitive Marketing Strategies

Balancing Customer and Competitor Orientations

Customer-Centered No Competition-Centered No Yes

Product Orientation Competitor Orientation

Customer Orientation

Yes

Market Orientation

SWOT ANALYSIS