Marketing Strategy Essay Sample
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- Category: competition
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Marketing Strategy Essay Sample
When more than one company offers the same kind of product, each company only receives a percentage of all sales of that kind of product. This percentage is called a “market share,” and any effort to take some of the market share away from one company and bring it to another is called an offensive marketing plan. (See also Flanking Marketing) In the above case of the motorcycle business of the mid-to-late 20th century, the Harley Davidson Company saw its market share declining while its competitors, like the Japanese company Honda and the Italian company Ducati, started to control more of the market, especially in the United States. Harley used an offensive marketing strategy to convince consumers that its competitor’s motorcycles were inferior while simultaneously romanticizing the unique features of Harley’s motorcycles. This proactive, image-driven campaign was designed to not only grow Harley Davidson’s business, but also shrink the business of its competitors. Defensive Strategy
Defensive strategy is a reactive strategy. It is a developed to protect market share, position and profitability. It is a strategy that can be used to keep up top position in local and existing market. An example for this could be if a company highlights its USP and advantages of its products and services to prove its better than competition. This is also done by introducing new products and services in the market which is better than what competition has to offer. This strategy is predominantly useful for a market which is well established in the market but is merely looking at pushing competition away to hold top position or monopoly in some situations as the case might be. This strategy will never include attracting customer attention for the first time. It is to keep the reputation intact which has been built in the market. This methodology is most successful to keep up the customer’s confidence which no new competitor can disturb.
HOW IS DEFENSIVE STRATEGY USEFUL ?
Every action has an equal and opposite reaction
Newton’s law of motion applies perfectly well in the situation of defensive marketing strategy. Marketing in general is seen as a reaction to particular situation in most cases, and more commonly in defensive marketing. Companies are not threatened until a new product comes into competition in the market. Defensive strategy can be used to weaken competition by using techniques that will capture customer interest. This strategy comes to life only where there is existence of competition. Example: A company uses advertising techniques to highlight a specific feature of its product, by doing which the competitor’s product will seem inferior in comparison. One of the best in this category was the MAC vs. PC campaign by apple which highlighted its own features in comparisons to other PCs of DELL and IBM, which obviously put down competition and created a success factor.
Guard your Fort
Defensive strategy can be used protect the territory of a market acquired by competitions product. Companies constantly come up with new effects to hold up their position and ward of competition. By using defensive strategy it is possible to stop competition from eating into your market share. Companies often safeguard their boundaries by dropping prices or exceptionally improving product feature which competition can’t provide. Example:
A typical example of this was the price war between Wal-Mart and Amazon. Wal-Mart marked down the price of its best sellers books. Instantly amazon matched its price followed by Wal-Mart dropping prices once again and every time amazon matched the price Wal-Mart dropped it further
Sharpen your vision
This can be done keeping a constant vigil on what in your own market. This will include a thorough research on the competition capabilities and assumption on how far their efforts can get them. Keeping a constant tab on competitor’s innovations is a good point of view. Companies place products in competition to what has newly been introduced in the market to slash down other from becoming stronger. This counter move will also require faster flow of information and efficiency to build superior features or technology which would be more professional. Example:
Companies like apple and Samsung continuously upgrade product technology to keep up their market share so that it is not taken away by competition and each time there is an upgrade more customer buy the upgraded version
Attack, analyze and improves
Companies constantly challenge themselves to analyze their position and rebuild on their strength. This can be done with techniques such as market surveys and deep analysis on why the competitor’s product might be more successful. The drop and increase of sale often leads to a situation where companies start analyzing their position and competitor’s product strength. As a defense plan companies establish something that makes them strongest to revise the situations Example:
A classic and well noticed example to this was in when Tylenol (Johnson and Johnson product) faced threats from other products in the market for pain relief. Tylenol revamped its entire marketing strategy and pulled up the focus to its best USP which is mildness of the medicine and recaptured its position in the market to a very large extent
Define you empire
Defensive strategy is useful to define your empire exactly to an extent where you can create walls which are unreachable to competition. One should exactly know strength and market position and define strategy in such a way that no competitor can mimic it. A good way to do this would be create patents, copyrights. This will protect the power statement of the product and remain with the company with no possibilities of buy in Example:
The most common use of this method is found among the biotechnology companies, which offers breakthrough innovations in high demand categories so that competition does not replicate the product.
Benefits of defense strategy:
1. Retention of market share
2. Prevention of entry for new opponents
3. Long term contracts
4. Intact reputation
5. Market Leadership
Guerrilla marketing incorporates low-cost, non-traditional means of marketing a product or service. For many small businesses, this is the best way to maximize marketing dollars. To create a guerrilla marketing strategy, use the tips and tricks savvy marketers have used for years, rather than trying to reinvent the wheel with high-risk ideas that haven’t been tested. Sponsored Link
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If you can get the media to talk about you, you will create a buzz that has more credibility than advertising. When you pay for an ad in a newspaper or magazine, consumers know you control the message. When the media talks about you, readers, viewers or listeners feel they are getting more-objective information. Send free product samples to media outlets with press releases that explain why your story is newsworthy to the public. For example, if you own a restaurant serving healthy food, invite the media to a tasting party preceded by a short talk on rising rates or obesity, high cholesterol, juvenile diabetes and other health problems. Discuss how your menu lets consumer enjoy dining out without the usual unhealthy ingredients and give some cooking and shopping tips for the media attendees’ audiences. Partnerships
Working with other established businesses helps you increase your exposure at no cost. Look for business that have a similar customer base and cross-promote your services. For example, if you own a car wash, agree to put a sign and coupons in your store for the local oil change shop if the owner will do the same. If you own a dress shop, promote the local shoe store if it will do the same for you. A wedding photographer should develop partnerships with caterers, florists, halls and churches. Word-of-Mouth
Getting people to promote you to their friends is free advertising. With social media, it’s easier than ever to develop client referrals. Create a Facebook business page with rich content to get your message in front of customers and to encourage them to share your information with their friends. Add Facebook Like buttons to your website pages to create more referrals. Offer clients a referral bonus of cash, product or services if they send people to you. Giveaways
Get your product or service in front of the public with free samples. Do this by donating items to charity auctions, holding website contests, setting up a table at a local fair or a business trade show or using in-store promotions. Customers will be more likely to buy more product from you once they’ve tried and like something than they will be if they have to spend money on something they haven’t tried before. Event Marketing
You can generate significant exposure by trading goods or services for a sponsorship of a 10K race, tennis or golf tournament, softball or volleyball league or high school team. Ask about getting your name on t-shirts, either by supplying them or paying a fee for screen printing. Offer free product for participant goodie bags in exchange for signage, your logo on shirts or other considerations. Offer to provide staff for the event in exchange for exposure. Free Demonstrations
If you offer a service that lends itself to education, such as marketing consulting, personal training, nutrition counseling or life coaching, offer free talks or seminars to give potential customers a free taste of what they’ll get if they hire you. Work with your chamber of commerce or offer to bring people to a restaurant for a paid lunch talk in exchange for you getting the room free. Marketing strategy – Using flanking strategies to compete
If you are looking to compete against a larger competitor and you have fewer resources than your rival, why not consider a flanking strategy? Flanking is a strategy that is designed to minimize confrontational losses. Rather than take a competitor head-on, you look for an area that is uncontested. In traditional marketing terms we call this segmentation.
To flank a larger competitor, you don’t necessarily need a brand new product, but there does need to be an element of newness about it. The newness could be that it is the “mini” version, or the version you buy through a different channel, or through a lower price.
The key is you have to be first so in effect you are marketing a product with no established market. So where do you get your customers from? From whoever the competitor is that you are flanking.
To launch a successful flanking strategy, you must adhere to the three principles:
Avoid areas of likely confrontation. A flanking move always occurs in an uncontested area. Make your move quickly and quietly. The element of surprise is worth more than a thousand tanks. Make moves that your competitor will not find threatening enough to respond decisively to.
The flanking strategy works best when the market is segmented (in other words, there are plenty of niches) and there are some segments that are not being well serviced by existing competitors. Also, if the larger competitor has strong resources and is able to withstand a full frontal attack and you are able to defend your niche markets.