Page 312 - DMGT408DMGT203_Marketing Management

Unit 13: Creating Competitive Advantage

A challenger can apply a variety of tactics. These include sales promotion, heavy local advertising, Notes
and merchandising efforts. Price-cutting sales promotions in small geographic areas are a good
means of encouraging brand switching among customers, particularly in consumer markets
and often difficult to counter quickly by a large competitor. Similarly, appropriately targeted
direct mail or Internet marketing can be effective in implementing this strategy. In some cases
guerrilla raids discourage a larger competitor from further expanding its product-market share
or undertake other aggressive actions.

Example: Airlines use short promotions to attack the national carriers especially when
passenger loads in certain routes are low

Self Assessment

Multiple Choice Questions:
9. …………………… strategy is a proactive and more aggressive version of flanker strategy
to defend leader’s market share position by expanding the total market.
(a) Confrontation (b) Market expansion
(c) Pre-emptive (d) Contraction
10. A brand introduced by a leader to compete against the challenger’s brand is called a
…………………… brand.
(a) Deceptive (b) Forward
(c) Flanking (d) Soldier
11. A guerilla attack is used by the …………………… to combat competition.
(a) Market leader (b) Market follower

(c) Market challenger (d) Niche marketer
12. When Sunfeast introduced Marie Light to compete with Britannia Marie, it was a
…………………… attack.

(a) Flanking (b) Frontal
(c) Leapfrog (d) Guerilla

13.5 Strategic Options for Mature Markets

Maturity stage of markets can continue for prolonged periods of time. In early stage of maturity,
a business should aim to maximise profit flow over the remaining period of product-market.
The most important goal is to maintain and protect market share. It is essential to retain the firm’s
share of repeat or replacement purchases from current customers. This is important because in
a mature product-market, the number of new customers is not sizeable as compared to the
existing customers.
Some of the defensive or offensive strategies discussed earlier in this unit continue to be relevant
here to retain customers. The most suitable approach for a market-share leader is to continue
sustaining its position applying position defence strategy. This requires for enhancing customer
satisfaction and loyalty, as well as simplifying and encouraging repeat purchases. Such as actions
that focus on improving product quality, service quality, and reduce costs. In case, markets are
more fragmented, a business might expand product lines, and applying flanker strategy add one
or more flanker brands to protect business from competitive attacks.

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