Page 311 - DMGT408DMGT203_Marketing Management

Marketing Management/Essentials of Marketing

Notes and continuing relations with low-cost suppliers, or some source of synergy with other business
divisions of the company. A challenger should also assess the target competitor’s resources
before launching a promotional blitz. If the chosen competitor has no resource constraints, then
it can retaliate aggressively. A large and better trained sales force can accord a competitive
advantage to a challenger in certain industries where sales force plays a key role in a company’s
marketing programme.
Leapfrog Strategy: This strategy is adopted in an attempt to gain an important advantage over
the current competitors. A challenger launches new generation, persuasively differentiated
products that are far more advanced and offer more desirable features and benefits to customers
than the existing alternatives.

Example: Digital watches, portable music, and digital cameras are some examples.
Citizen introduced watches that do not require a battery change. Leapfrog strategy works well
in attracting repeat or replacement purchases from competitor’s existing customer groups, and
new purchases from other adopter groups of customers.
Flanking Attack Strategy: This strategy is suitable when a market can be meaningfully divided in
more segments and a challenger cannot match the competitor’s resources in a frontal attack. The
target competitor(s) is well established in some primary segment, and the available brands fall
short of delivering desired satisfaction to the customers in one or more segments. To start with,
a challenger focuses its resources and capabilities on one large untapped segment and attempts
to corner a sizable share of the total market. This approach may generally require attractive
product features, and services highly desired by customers. In addition to this, suitable pricing,
and effective promotional policies to attract customers are necessary to speed up brand demand.

Example: G-Five introduced cheap mobile phones with features like music player, camera,
dual sim, touch screen, etc. to target lower end customers who want to buy a phone with such
features but cannot buy a Nokia or Samsung due to their high prices.
Encirclement Strategy: A challenger applies flanker strategy to attack several small, and untapped
or underdeveloped segments at the same time. The challenger attempts to surround the target
competitor’s brand from all sides, offering a variety of alternatives to several peripheral segments
in a market. This strategy may be successful when a market is fragmented and there are varied
application, or geographic areas and have distinct needs and preferences.
To apply this strategy, a challenger needs to develop a varied line of products with desired
features to suit the preferences of different market segments.

Example: Cadbury-Schweppes sells a wide variety of flavoured soft drinks that appeal
to unique preferences of several segments. The company has stayed away from cola drinks to
avoid drawing competition from Pepsi and Coke.

Guerrilla Attack Strategy: Guerrilla attack strategy may suit a challenger with relatively limited
resources and where other strategies are not possible. The challenger makes a series of surprise
attacks in limited geographic areas against its established target competitor. The whole objective
is to demoralize the target competitor and establish safe and lasting foothold.

Task Find out instances when a company had to use a guerrilla attack to tackle
competitors.

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