Page 306 - DMGT408DMGT203_Marketing Management

Unit 13: Creating Competitive Advantage

feeling of satisfaction among present customers, and make the offer more attractive to new Notes
customers.

Note Fair and Lovely Menz Active

All the big players in the ` 700 crore fairness products market in India admitted that at
least 25% of their users were male. Emami launched its Fair & Handsome skin lightening
cream for men. HLL has now hit back with Fair & Lovely Menz Active.
“We have always been aware that a significant male user base existed within Fair &
Lovely itself, and hence there was always need to launch a variant that understands and
takes care of unique requirements of men,” says vice president, Skin Care, HUL.
Source: The Brand Reporter, March 13 – 31, 2006
Possibly the most important measure a market leader can adopt is to continue modifying its
product and add innovative features. Hindustan Lever Limited introduced its top of the line
Dove Gentle Exfoliating Bar that has pH range between 6.5 and 7.5, which is almost neutral
unlike other toilet soaps that are alkaline with 9 pH or above. This can block moves by competitors
to differentiate their offer by incorporating features or performance improvements not offered
in leader’s products. It would add to the competitive edge if the leader also reduces costs to
discourage price-competition.
In addition to adding new features, the market leader should take steps to improve customers’
perceptions about the product. The focus of marketing communications should shift for building
selective demand of company’s brand. The sales promotion efforts should be directed to induce
trial among late adopters, and repeat purchase among the existing customers.
Another important aspect the leader must consider is to focus on increased pot-purchase service
in case of durable products to strengthen its position.
Flanker Strategy: The market leader adopts this strategy to outsmart a challenger who simply
decides to bypass the leader’s fortress and attempts to capture a territory where the leader so far
has not been able to develop a strong presence. This may happen when the product-market is
fragmented with distinct segments and the leader’s product-brand does not meet the needs and
wants of some of those attractive segments. This may happen when a competitor with appropriate
resources and strengths differentiates its offer that appeals to, one or more of these segments,
where the leader so far is not established. In this situation, the challenger captures a big chunk
of the share.
To defend exposed flank against the challenger’s attack, a leader might develop a fighting brand
(also called Flanker brand) to compete against the challenger’s brand.

Example: This is what Hindustan Lever did when Nirma detergent made inroads in
HLL Surf market share.
Depending where the challenger focuses, the leader can introduce a higher quality brand at
higher price, or lower-quality brand at lower than the challenger’s price to appeal to the segment
thus, protect the leader’s main brand.
A market leader first ensures position defence and simultaneously adopts flanker strategy.
Obviously this requires investments and the company should have sufficient resources to fully
commit to adopting both strategies at the same time.
Confrontation Strategy: IBM was the leader in commercial PC market but in mid 1980s the
company lost market share to competitors like Compaq.

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