11-1

Chapter Questions

• How do marketers identify primary competitors?

• How should we analyze competition?

– strategies, objectives, strengths, and weaknesses

• How can market leaders expand the total market and defend market share?

• How should market challengers attack market leaders?

• How can market followers compete effectively?

11-2

Competition isn’t always bad!

Bill Cade’s crickets

Furniture industry

Satellite radio

WHEN?

11-3

Five Forces Determining Segment Structural Attractiveness

11-4

Identifying Competitors

11-5

Economic View of Competition

Pure Monopoly

Oligopoly

Monopolistic Competition

Pure Competition

11-6

Analyzing Competitors

Share of market

Share of mind

Share of heart

11-7

Hypothetical Market Structure

10%MarketNichers

20%Market

Follower

30%Market

Challenger

40%MarketLeader

11-8

Expanding the Total Market

New customers

More usage

11-9

Optimal Market Share

11-10

Question

Why can profits decrease

as market share expands?

11-11

Other Competitive Strategies

Market Challengers

Market Nichers

Market Followers

11-12

Fast Food Study

• McDonald’s is the market leader

• The “lighting rod” of criticism

• 1986 Hardee’s tries lower fat, no one follows.

• April 1991 McDonald’s introduces McLean

• July KFC and Arbys’ low fat products

• 2000 Subway becomes niche player (sandwiches)

11-13

Market Follower Strategies

Counterfeiter

Cloner

Imitator

Adapter

11-14

Market Niche Strategies

11-15

Balancing Orientations

Competitor-Centered

Customer-Centered

11-16

Group Discussion

How do you attack a Category Leader?

Take a position:

1. The best way to challenge a leader is to

attack its strengths.

2. The best way to attack a leader is

to adopt a flanking strategy.