Transcript Chapter11.ppt

Chapter Questions
• How do marketers identify primary competitors?
• How should we analyze competition?
– strategies, objectives, strengths, and weaknesses
• How can market leaders expand the total market
and defend market share?
• How should market challengers attack market
leaders?
• How can market followers compete effectively?
11-1
Economic View of Competition
Pure Monopoly
Oligopoly
Monopolistic Competition
Pure Competition
11-2
Competition isn’t always bad!
Bill Cade’s crickets
Furniture industry
Satellite radio
WHEN?
11-3
Forces Determining Segment Attractiveness
11-4
Identifying Competitors
11-5
Analyzing Competitors
Share of market
Share of mind
Share of heart
11-6
Hypothetical Market Structure
10%
20%
Market Market
Nichers Follower
30%
Market
Challenger
40%
Market
Leader
11-7
Two ways to expand:
New customers
More usage
11-8
Optimal Market Share
11-9
Question
Why do profits often decrease
as market share expands?
11-10
Competitive Players
Market
Challengers
Market
Followers
Market
Nichers
11-11
Market Follower
11-12
Market Niche
11-13
Fast Food Study
• McDonald’s is the market leader
• The “lighting rod” of criticism
• 1986 Hardee’s tries lower fat, no one follows.
• April 1991 McDonald’s introduces McLean
• July KFC and Arbys’ low fat products
• 2000 Subway becomes niche player
(sandwiches)
11-14
Balancing Orientations
CompetitorCentered
CustomerCentered
11-15
Group Discussion
How do you attack a Category Leader?
Take a position:
1. The best way to challenge a leader is to
attack its strengths.
2. The best way to attack a leader is
to adopt a flanking strategy.
11-16