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Lecture Notes On Strategic Marketing Management

This document discusses strategies for gaining and defending market position. To gain market position, companies can use steal-share strategies like differentiation or similarity to attract competitors' customers. They can also use market growth strategies to attract new customers or market innovation strategies to define new categories. To defend market position, companies can choose not to act, reposition current offerings, or extend their product line vertically or horizontally. Core competencies provide competitive advantages through expertise in areas like innovation, operations, and brand building.

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Alan Garin
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2K views

Lecture Notes On Strategic Marketing Management

This document discusses strategies for gaining and defending market position. To gain market position, companies can use steal-share strategies like differentiation or similarity to attract competitors' customers. They can also use market growth strategies to attract new customers or market innovation strategies to define new categories. To defend market position, companies can choose not to act, reposition current offerings, or extend their product line vertically or horizontally. Core competencies provide competitive advantages through expertise in areas like innovation, operations, and brand building.

Uploaded by

Alan Garin
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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Strategic Marketing Management

FINALS PERIOD LECTURE

I. MANAGING GROWTH
A. Gaining and Defending Market Positions
B. Managing Sales Growth
C. Managing New Products
D. Managing Product Line

November 23, 2019

GAINING AND DEFENDING MARKET POSITION

MANAGING MARKET POSITION QUESTIONS:


1. How to GAIN market position?
2. How to DEFEND the current market position?

GAINING MARKET POSITION STRATEGIES:


1. Steal-Share Strategy (Selective Demand Strategy)
a. refers to a company’s activities aimed at attracting customers from its competitors rather than trying to attract
customers who are new to the product category.
b. NARROW (e.g. PEPSI vs. COKE)
c. BROAD (e.g. RC Cola vs all other competitors)
d. TYPES:
i. Differentiation Strategy – demonstrating the superiority of the company’s offerings over the
competitor.
ii. Similarity Strategy (“me too”) – establishing multiple points of parity by showing that the company’s
offerings and that of its competitor is actually identical.

2. Market Growth Strategy (Primary Demand Simulation)


• aims to attract customers who are NEW to the category.
• aimed at growing the entire category, hence, typically benefits all companies competing in that category.
• typically adopted during the early stages of an offering’s life cycle when the overall market growth is high and
competition is not yet an issue.
3. Market Innovation Strategy (Blue Ocean Strategy)
• similar to a market growth strategy
• defines an entirely new category in which direct competitors are absent
• often leads to PIONEERING NEW MARKETS
• PIONEERS (FIRST-MOVERS) – refers to the first company to establish its presence in a particular domain.

• TYPES OF PIONEERS:
a. Technology pioneer – the company that first introduces new technology.
b. Product pioneer – the company that is first to commercially introduce an entirely new product.
c. Business model pioneer – the company that is first to introduce a new business model.
d. Market pioneer – the company that first introduces a given offering to a particular target market.

• BENEFITS OF PIONEERING:
a. preference formation – opportunity to shape customer preferences, creating close association with its
brand and underlying customer need. (e.g. google, xerox, twitter, ebay)
b. switching cost – opportunity to build loyalty by creating switching costs.
▪ TYPES OF SWITCHING COSTS:
i. functional – loss of the unique feature of the pioneer’s offering.
ii. monetary – cost of replacing current offering or penalty for breaking a contract.
iii. psychological – cost of learning the functionality of a competitor’s offering.
c. resource advantage – the pioneer can benefit from pre-empting scarce resources such as raw materials,
human resources, geographical locations, and collaborator networks. (e.g. exclusive access to strategic
raw materials)
d. barriers to entry – opportunity to create technological barriers to prevent competitors from entering the
market. (e.g. exclusive right to a particular invention or design)
e. learning curve – allows to heighten production effectiveness and efficiency as its cumulative output
increases over time.

• DISAVANTAGES OF BEING A PIONEER:


a. Free-riding – (e.g. FEDEX built on DHL’s idea to start overnight deliveries in the U.S.)
b. Incumbent inertia – Being a market leader leads to complacency, thus leaving technological and market
opportunities open to competitors. (e.g. Barnes & Nobles vs. Amazon.com, Ford vs. General Motors)
c. Market Uncertainty – (e.g. introduction of sugar-free drinks by Royal Crown vs. Coca-cola and Pepsi)
DEFENDING MARKET POSITION STRATEGIES:

DEFENSIVE MARKET STRATEGIES:


I. NOT TAKING ACTION – reflects the company’s belief that these actions will either have no material impact on
the company’s market position or that the competitive threat is not sustainable.

II. REPOSITIONING ITS CURRENT MARKET OFFERINGS:


a. (CURRENT Customers) – Enhancing the value of the current offering by increasing benefits and/or
reducing costs.
i. Increase BENEFITS:
• functional benefits – improving performance
• monetary benefits – adding monetary rewards
• psychological benefits – enhancing offering’s image
ii. Decreasing COSTS – reducing costs of the offering.

b. (NEW Customers) –
i. VERTICAL REPOSITIONING – refers to a scenario in which the company modifies the value
proposition of an offering by moving it into a different price tier (either UPSCALE or DOWN
SCALE).
ii. HORIZONTAL REPOSITIONIN – altering the benefits without necessarily moving into a different
price tier.

III. EXTENDING THE PRODUCT LINE:


a. VERTICAL EXTENSION – new offerings differentiated by both benefits and price. (e.g. economy car vs.
luxury cars)
i. FIGHTING BRAND – a popular downscale strategy that is introduced to shield the core offering
from low-priced competitors.
ii. SANDWICH STRATEGY – involves introduction of both down-scale offering and upscale
repositioning of the core brand.
iii. GOOD-BETTER-BEST STRATEGY – introducing both upscale and low-scale and up-scale offerings
plus resulting in 3 product lines.

b. HORIZONTAL EXTENSION – offerings that are primarily differentiated by functionality rather than the
price.

CORE COMPETENCIES: A COMPETITIVE ADVANTAGE


These involves expertise in an area essential to the company’s business model allowing it to create market value.
KEY AREAS:
1. Business innovation – proficiency in managing business processes, such as identifying
2. Operations management – expertise in manufacturing and supply-chain management.
3. Technology development
4. Product development
5. Service management
6. Brand building:

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