Strategies for Dealing with Competition

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					                                                                   10/12/2008




                           Chapter 9
                   g
            Crafting the Brand 
              Positioning and 
                  Dealing with 
                  Competition
                                                             9-1




Chapter Questions
 How can a firm choose and communicate an effective 
 positioning?
 How are brands and offerings differentiated?
 H      fi  id if  i   i                       i      d 
 How can a firm identify its primary competitors and 
 analyze their strategies, objectives, strengths, and 
 weaknesses?
 How can market leaders, challengers, followers, and 
 nichers compete effectively?



                                                             9-2




Positioning
 The act of designing the company’s offering and image to 
 occupy a distinctive place in the minds of the target 
 market.
 Result is the creation of a customer‐focused value 
 proposition:
   A cogent reason why the target market should buy the 
   product.
   See Table 9.1 for example.
 Category membership—the products or sets of products 
 with which a brand competes and which function as close 
 substitutes.
 Need to understand consumer behavior and the 
 consideration sets consumers use in making brand choices.
 Starbucks: the “:third place”
                                                             9-3




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                                                                  10/12/2008




Points‐of‐Parity and Points‐of‐
Difference
Points‐of‐difference         Points‐of‐parity (POPs)
 (PODs)                       Associations that aren’t 
 Attributes or benefits       necessarily unique to the 
 that consumers strongly      brand but may in fact be 
 associate with a brand,      shared with other 
 positively evaluate, and     brands.
 believe they couldn’t find      Category points‐of‐parity 
 to the same extent with a       (Travel agent)
 competitive brand.              Competitive points‐of‐
                                   parity – “good enough” on 
                                   certain dimensions
                                                            9-4




Establishing Category Membership
  Announcing category benefits
  Comparing to exemplars
  Relying on the product descriptor

Key Criteria for Points‐of‐
Key Criteria for Points of
Difference
Desirability Criteria         Deliverability Criteria
 Relevance                     Feasibility
 Distinctiveness               Communicability
 Believability                 Sustainability

                                                            9-5




Product Differentiation
  Form                          Durability
  Features                      Reliability
  Customization                 Repairability
  Performance quality           Style
  Conformance quality           Design




                                                            9-6




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 Service Differentiation
  Ordering ease
  Delivery
  Installation
  Customer training
  Customer consulting
  Maintenance and repair
  Returns



                                 9-7




 Other Dimensions of 
 Differentiation
  Personnel
  Channel
  Image




                                 9-8




Figure 9.1: Five Forces that 
Determine Marketing Attractiveness




                                 9-9




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Industry and Market Views of 
Competition
 Industry—a group of firms that offers a product or 
 class of products that are close substitutes for each 
 other.
 Classified by:
   Number of sellers
   Degree of product differentiation
   Presence or absence of entry, mobility, and exit barriers
   Cost structure
   Degree of vertical integration
   Degree of globalization

                                                               9-10




Competitor Analysis
                         Figure 9.3:
      Strategic Groups in the Major Appliance Industry
        Strategies * Objectives * Strengths * Weaknesses
        Share of market * Share of mind * Share of heart




         Leader * Challenger * Follower * Nicher




Market‐Leader Strategies
 Expanding the total market – market opportunity 
 matrix.
 Defending market share: later
 E     di      k  h
 Expanding market share




                                                               9-12




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Market‐Leader Strategy:
Defending Market Share




                                                 9-13




Other Competitive Strategies
 Market‐challenger strategies
 Market‐follower strategies
 Market‐nicher strategies




                                                 9-14




Market‐Challenger Strategies
 Define the strategic objective and opponents.
 Decide who to attack:
   Market leader
      k         l h          d    f
   Market equals that are underperforming
   Small local and regional firms




                                                 9-15




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Attack Strategies




                                                9-16




Market‐Follower Strategies
 Counterfeiter
 Cloner 
 Imitator 
 Adapter



Specialized Niche Roles, Table 9.3 

                                                9-17




Balancing Customer and 
Competitor Orientations
Competitor‐centered       Customer‐centered 
 company                   company
 Looks at what             Focuses more on 
 competitors are doing     customer developments 
 and then formulates       in formulating its 
 competitive reactions.    strategies.




                                                9-18




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