TKI 334 Marketing Management:

Marketing Strategy
Lecture 6
Ronald Sukwadi, ST,MM

Jurusan Teknik Industri

Universitas Katolik Indonesia Atma Jaya

Marketing Strategy
Example :

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Competitive Strategies

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Market Leader Companies

Toyota (autos) , Kodak (photography) ,

Microsoft (computer software) , Nikon
(cameras), Caterpillar (earth-moving
equipment)

These firms have the largest market share in

the relevant product market.
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Market leader strategies

Limit competitive pressures by alliances and

mergers.
Expand market demand.
Expand market share even if market size remains
constant.
Retain strength by reducing costs.
Defend current market share through good defensive
and offensive actions.
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Expanding
the
totalproducts
market
New users for
existing

Example : Johnson & Johnson baby shampoo for

adults.
New uses for existing products Example : Du Pont
discovered a new use of nylon. Nylon first used in
parachutes, then as a fiber for womens stockings,
automobile tires, and carpeting
More overall general usage of product. Example :
Michelin stimulated higher usage per occasion for
more tire replacement.

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Expanding
market
share

Win customers through expensive and innovative

initiatives
Win competitors
The Boston Consulting Group estimates that 64%
of recent US acquisitions have destroyed value for
the acquirers shareholders
Win loyalty of the customers

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Loyalty programmes
Relationship marketing
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Improving productivity

Improve costs

Reduce capital cost through Just in Time (JIT) and

Total Quality Management (TQM).
Reduce fixed costs
Reduce variable costs

Change product mix

Add value

Service agreements

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Defense Strategy
1. Position defence

Building fortifications around their markets.

Short-term strategy.

2. Flanking defence

When holding its overall position, the market leader needs to watch its weaker
flanks carefully. Ex: in Philippines, San Miguel launched Gold Eagle as Asia
Brewerys Beerhausen attacked.

3. Pre-emptive defence

Proactive striking at competitors before they can move against the company.

4. Counteroffensive defence

When attacked, the leader launches a counteroffensive defence.

5. Mobile defence

Leader proactively and aggressively defends its market and also explores new
market opportunities.

6. Contraction defence

Company gives up weaker positions and concentrates its resources on stronger

ones.

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Defense Strategy

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3.Preemptive defense
4. counteroffensive
defense
5. Mobile defense

5. Mobile
defense
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Strategy-

Attacker

Defender

6.
Constructio
n Defense

1.Position
defense

2.Flank positioning defense

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Market challenger strategies

They can attack the leader and competitors in

an aggressive bid for more market share.
They can operate in conjunction with
competitors and be market followers.

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Attack Strategies for Market Challenger

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1. Frontal attack
Choosing
an
attack
against
the
Attacks the competitors strengths rather than its weaknesses.
Strength and endurance are of paramount importance.
competitors(1)
If there are limited resources a frontal attack is pointless.

Example : Asia Breweri attacked San Miguels Pale Pissen with

matching the leaders strength at lower price 1/3 than regular

2. Flanking attack

Rather than attacking head on, the challenger seeks to identify and
attack the competitors weak points.
This strategy is used when there are limited resources.
Example : Yaohan expanded to China and avoid battling with Seibu
and Mitsokushi in Japan.

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3. Encirclementan
attackattack against the
Choosing
Encirclement entails attacking from all sides, so that the competitor
has to guard each side.
competitors(2)
Used when the attacker has superior resources and can rapidly break

the competitors hold on the market.

Ex : Walls India offers 8 different brands to attack specific segments
i.e. Split, Minimilk, Paddle Pop, Soda, Feast, Cornetto.

4. Bypass attack

Challenger bypasses the competitor and targets easier markets.

Often diversification into unrelated products or new geographic
areas. Ex : Pepsi against Coke in interior country province in China.

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5. Guerrilla attack
Choosing
an attack against the
Actions taken by smaller firms against larger ones.
competitors(3)
Continuous guerrilla campaigns can be expensive to

defend against and will inevitably lead to a strong

challenger wanting to beat the competitor.

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Market follower strategies

A market follower can gain many advantages by

piggy-backing upon the marketing efforts of the
market leader.

It can copy and improve upon the leaders products and

programmes normally at much lower costs.
Often highly profitable and the stability of the market
safeguards the profits for all players.
Price wars are avoided and there is no aggressive offensive
and subsequent retaliation.

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Market follower strategies

Cloner

Imitator

Replicates the leaders strategies

Copies some things from the leader but differentiates
itself with packaging, advertising, pricing, service.

Adapter

Builds upon the leaders products and marketing

programmes, often improving upon them.

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Market nicher strategies

Often regional bases, thriving in clusters.

Frequently affected by externalities activities that
are external to an organisation but affect its
performance. E.g. Silicone Valley in California and
the computer industry.
The key to successful niching is specialisation.
Example : Hard Rock Caf targets young trendies
and tourists.
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Market nicher strategies

End-use specialist

Vertical-level specialist

Produces specific product or product line. Ex : Firm producing only microscope or lens.

Quality-price specialist

Specific region or locality.

Product or feature specialist

Limits selling to one or a few large customers. Ex: Many small firms sell their entire output to
Matshusita in Keiretsu system.

Geographical specialist

Concentrates on selling to small, medium or large customers.

Specific-customer specialist

Specialises at some level of production or distribution cycle. Copper Firm produce raw copper,
copper component.

Customer-size specialist

Specialises in one type of end user customer. Ex : Law Firm specialist in Criminal

Operates at the low or high end of the market. Ex : HP specialize in high quality and highprice calculator

Service specialist

Offers services not available from other firms. Ex: Bank that takes loan request by phone.

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