Page 304 - DMGT408DMGT203_Marketing Management

Unit 13: Creating Competitive Advantage

Notes
Example: Airtel is the market leader in India in mobile network services market.
Market Follower: Many companies in product industries that are capital-intensive and deal in
products viewed as homogeneous such as cement, steel, and chemicals etc., prefer to stay follower.
They usually copy the leader and present similar offers to customers in terms of quality, price,
and service. Opportunities to create any meaningful differentiation of their offer are very little,
and price sensitivity is considerable. Any attempt to pose a challenge to the leader requires huge
investments. Those who try for challenging the leader, often take the route of expansion through
acquisitions.

Example: According to a news item in Hindustan Times, Mittal Steel Co., became the
largest steel producer in the world by acquiring some other steel businesses in the industry.
Market Challenger: Any other competing firms, whether second, third, or further down below
in rank in the same product-market might decide to become the challenger. Much depends on
the individual company’s assessment of the leader’s objectives, strategies, strengths and
weaknesses, and also the firm’s assessment of its own resources, strengths and weaknesses and
objectives to challenge the leader.

Example: Vodafone, Idea, etc. are the market challengers in the mobile network services
market.
Niche Marketer: A niche market is a very small sub-segment of a segment where customers seek
a distinctive set of attributes resulting in certain most desired benefits. A niche marketer focuses
on customer needs in this small sub-segment and customises its marketing effort to that group
of target customers. These customers are prepared to pay a premium price to the niche marketer
who best satisfies their needs. The niche usually does not attract competitors.

Example: Rolls Royce, Louis Vuitton, Tag Heuer, etc. are niche marketers.

Self Assessment

State whether the following statements are true or false.
6. Customer value is the sum total of quality, benefits, costs, and service.
7. Airtel is the market leader in mobile services industry.
8. Niche companies attract the most competition.

13.4 Strategic Options for Growth Markets

13.4.1 Market Leader Strategies

Market leader is either a pioneer or at least one of the first few entrants who first developed the
product-market. Generally, the leader’s objective is to maintain its leading share position despite
the entry of new players. Maintaining early market share-lead in growing markets is challenging
because of increasing number of competitors, fragmentation of market segments, and threat of
product innovation from competitors. A company can maintain its market share in the presence
of competitors only when its sales grow at a rate that is equal to overall market growth.
To gain and maintain leading market share a business needs to retain its existing customers by
building brand loyalty to ensure they make repeat or replenishment purchases. The business

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