Warfare

Strategies
Leader & Challenger or
Follower
Leader typically pioneer/early entrants
Developed product-market in first place
Other Competitors will follow hence follower
Some may challenge the leader or other competitors &
hence Challenger
Marketing Objectives for
Share Leaders
Share maintenance
Retain current customers
Customers remain brand loyal/Repeat purchases
Stimulate selective demand among late adopters
Stimulate primary demand
Need for investment to finance growth
Firm maintains share in growth market only if sales
volume grows at market growth rate
Share maintenance strategies
of Leaders
Fortress or position defense strategy
Flanker Strategy
Confrontation Strategy
Market expansion strategy
Strategic withdrawal strategy
Fortress or Position Defense

To strengthen currently held strong position

Build an impregnable fortress
Improve customer satisfaction & loyalty
Simplify repeat purchase for current customers
Make offering more attractive for new customers
Actions to improve customer
satisfaction & loyalty
Better Q.C.
Capacity expansion
Continuous product improvement
Improve brand perception
Sales promotion
Sales force servicing existing accounts ( B to B)
Post sales service improvement
Actions to encourage &
Simplify Purchase
Reduce stock-out
Improve Inventory & Logistics
Integrate distribution channels
Customer contracts
Loyalty programmes
Flanker Strategy

When the market is fragmented

Follower will Focus where leader is not present
Offer differentiated product.
Leader to develop second brand
This strategy is used in conjunction with position
defense strategy.
Confrontation Strategy

Competitor attacks leader head on

Steal customers from leaders main market
Leader can proactively act through intelligence
Reactive Making product improvements, increase
promotion & lowering price
Price Penetration strategy at start
Development of next generation product
Market Expansion Strategy

Expanding into number of market segments

Capture large share of new customers
Specially in fragmented markets
Multiple product development & marketing
Develop line extensions, new brands,
Keep product same but vary other elements of mix
Withdrawal Strategy

Unable to defend in some segments

Reduce or abandon efforts insuch segments & focus on
potential segments
Growth Strategies for
followers or Challenger
Objectives ?
Whom to attack?
Frontal attack strategy
Leapfrog strategy
Flanking & Encirclement Strategy
Guerrilla Strategy
Objectives

A) Those with limited resources & competencies may

seek small but profitable business within a segment
This is niche strategy. E.g. J&J Baby Products
It is safe in major Market Storm

B) Large firms seek to displace leader or become

powerful within market
To attain share growth
E.g. Reliance Jio.
Whom to attack ?

A) Attack the leader in primary target market:

It is a frontal assault or leapfrog through development of superior
technology or product design.
Challenger must have superior resources & competencies to
convert into sustainable advantage
B) Attack another follower in primary target market:
It is a frontal assault but easier for challenger if not well
established as market leader with consumers
C) Attack one or more of small competitors with limited resources
It is an inefficient way of attaining share increase.
However several competitors can be targeted simultaneously to
good effect
Whom to attack ? Contd

D) Avoid direct attack on established competitor

In a fragmented market if leader is not fulfilling
customer needs then flanking or encirclement strategy
is used
Challenger develops differentiated product offerings
Frontal Attack Strategy
When to use ?
Where the market for product category is relatively
homogenous, with few untapped segments, at least one well
established player, when follower wants to achieve increased
market share then Head On.
When most existing customers do not have strong brand
preferences or loyalties
Challenger has greater resources & competences then leader.
E.g. Production technology, Promotional budgets, Sales team
Challenger has superior product offerings
Challenger should have sustainable advantage over leader.
E.g. Lower costs, differentiated offerings
Variables limit leaders ability to retaliate. E.g. Low price v/s
Brand image, ROI, Cash flow objectives, R&D and promotion
expenses
Leapfrog Strategy

When ?
Challenger has best chance of gaining market share for
current customers of leader when it offers attractively
differentiated offerings
To offer superior product based on advanced technology or
sophisticated design.
To offer new generation product. e,g Polaroid, Walkman
It inhibits quick retaliation by leader
Leader unable to change technology due to investment &
plant capacity e.g.2G, 3G, 4G, CDMA, Smartphone
To effective promote new products on benefits & justify
switching
Flank Attack Strategy

When ?
Market can be broken into 2 or more large segments
Leader & other competitors hold strong position in primary
market segment
Existing brands dont satisfy full needs of at least one segment
Challenger to concentrate on one large untapped segment
Develop product features tailored to needs of that segment.
E.g. Japanese Cars in US
Set appropriate promotional & pricing policies to build
selective demand.
Challenger can provide specially designed customer services &
distribution channels
Encirclement Strategy

It involves targeting several smaller untapped segments

in market simultaneously
To surround leaders brand with variety of offerings
aimed at several peripheral segments
It makes sense when market is fragmented into many
different segments or geographical regions with unique
needs
It involves developing line of products with features
tailored to meet needs of different segments.
E.g. Coke v/s Cadbury Schweppes
Guerrilla Attack Strategy
When ?
Well established competitors cover all major market segments
Challengers resources are limited
Flanking, Encirclement or Frontal attack not possible
Challenger makes series of surprise raids against established competitors.
To avoid massive retaliation challenger uses Guerrilla attacks sporadically, in
limited geographic areas where competitor is not strong
Various means used for attack :
Sales promotion efforts
Local advertising blitz
Legal action
Short term price reductions
Target specific customer groups within limited geographic area
To implement quickly
Difficult for large competitor to respond as they cant give discount to large
market share & its high cost
Other means : Direct mail, Internet campaign , PR etc