Phillip

Kevin Lane

Kotler Keller
Marketing Management 14e

a
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1
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Competiti
ve
Dynamics

Discussion Questions
1. How can market leaders expand the total
market and defend market share?
2. How should market challengers attack
market leaders?
3. How can market followers or niche compete
effectively?
4. What marketing strategies are appropriate
at each stage of the PLC?
5. How should marketers adjust their strategies
and tactics for an economic downturn or
recession?
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Market Members
Market
leader

Market
challenger

Market
nichers

Market follower

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Fi 1.1
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Hypothetical Market
Structure

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Staying Number One

1. Expand total market
demand
2. Protect current market
share
3. Increase market share
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Expanding Total Market

Demand
New Customers
More Usage
Replacement rate
New product uses

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Protect Current Market

Share
Offensive
Strategy

Proactive
Marketing

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Defensive
Strategy

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Six Types of Defense

Strategy

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Increase Market Share

Antitrust
action

Decreased
profitability
Pursue wrong
marketing
activity

Actual
quality
Perceived
quality

Lower overall
quality

2012
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2013
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Fi 1.3
1

Optimal Market Share

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Other Competitive
Strategies
Marketchallenger

Marketnicher

Market-follower
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Market-Challenger
Strategies
Define objectives and
opponent(s)
Choose general attack
strategy
Choose Specific attack
strategy

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Market-Challenger
Strategies
Objectives
and
General attack
Opponents

Attack:
Market leader
Weaker, similar size
firms
Smaller local or regional
firms

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strategies
Frontal attack
Flank attack
Encirclement attack
Bypass attack
Guerrilla attack

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Market-Follower Strategies
Counterfeit
er

Adapte
r

Imitator
Cloner
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Market-Nicher Strategies
Nichers Task
Create niches
Expand niches
Protect niches

Target small, profitable

segments
Achieve higher margins
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Product Life-Cycle
Strategies
Products have a
limited life
Sales pass through
stages
Profits rise, then
fall
Different strategies
needed
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1

Sales and Profit Life

Cycles

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Common Product LifeCycle Patterns

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Style, Fashion, and Fad

Life Cycles

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Product Life-Cycle Stages

Introduct
ion

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PLC: Introduction Stage

Slow sales growth, negative
profits

Marketing
Strategies:
Speed to
Market

1.Create awareness
2.Induce product trial
3.Secure retail
distribution.

Which is more profitable over

5 years?
6 months late, but on budget?
On time, but 50% over

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Order of Market Entry

Pioneer Advantage

First Mover
Advantage
Brand name
association
Define product
class
Customer inertia
Producer
advantages

Inventor
Product
pioneer
Market
pioneer

Imitator Advantage

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Long-Range Product
Market Expansion
Strategy

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PLC: Growth Stage

Rapid sales growth; New
competitors

Marketing Strategies:
1.Improve product quality; add new
features
2.Add new models and flanker
products
3.Enter new market segments
4.Focus advertising on preferences
5.Increase distribution coverage
6.Lower price; Attract price-sensitive

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PLC: Maturity Stage

Growth slows; Weak
competitors exit

Marketing Objectives:
1.Maximize profit
2.Defend market share

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PLC: Decline Stage

Slow sales growth, negative
profits

Product
Options:
1.Rejuvenate
2.Harvest
3.Divest

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Characteristics of the PLC

Introducti
on

Growth

Maturity

Decline

CHARACTERISTI
CS
Sales

Low

Rapidly
rising

Peak

Declining

Costs/customer

High

Average

Low

Low

Profits

Negative

Rising

High

Declining

Customers

Innovators

Early
Adopters

Middle
majority

Laggards

Competitors

Few

Increasing

Stable
number

Declining

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2
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e
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PLC

Objectives and
Strategies
Introducti Growth
Maturity

Decline

on

MARKETING OBJECTIVES
Awareness
and trial

Maximize
market share

Maximize
profits;
Defend share

Milk the
brand

Product

Basic

Extend;
Service,
warranty

Diversify
brands and
models

Phase out
the weak

Price

Charge
cost-plus

Price to
penetrate

Price to
match

Cut price

Distribution

Selective

Intensive

More
intensive

Go
selective

STRATEGIES

Communicatio

Awareness

Awareness w/ Stress brand

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Marketing in an Economic
Downturn
More Compelling Value
Proposition
Review Budget Allocations
Get Closer to
Customers
Increasing
Investments

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