Defensive and Offensive
Marketing Strategies
Chapter 14
Slides developed by:
Peter Yannopoulos
4/13/2015
© 2006 by Nelson, a division of Thomson Canada Limited
14-1
Why Does Rivalry Occur?
Rivalry occurs because one or more
competitor either feels the pressure,
or sees an opportunity, to enter an
industry or to improve its position
within an industry
© 2006 by Nelson, a division of Thomson Canada Limited
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How Do Companies Respond?
Companies respond to competitors’
challenges by counterattacking with
increasing advertising expenditures,
cutting prices, increasing innovation,
and introducing new products, or
even accommodating the entrant
© 2006 by Nelson, a division of Thomson Canada Limited
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Incumbents
Need to be prepared for attacks by new
entrants and existing firms seeking to expand
their business
They may also attack in an attempt to enter a
new market, reposition themselves, or improve
their market position
© 2006 by Nelson, a division of Thomson Canada Limited
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Defensive Marketing Strategies
Because of ongoing rivalry, established firms
need to engage in defensive strategies to fend
off various challengers
© 2006 by Nelson, a division of Thomson Canada Limited
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The primary purpose of defensive
marketing strategies…..
is to make a possible attack unattractive
and discourage potential challengers
from attacking a firm
© 2006 by Nelson, a division of Thomson Canada Limited
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Defensive strategies work better ….
when they take place before the challenger
makes an investment in the industry or if
the challenger enters the industry before
exit barriers are raised
© 2006 by Nelson, a division of Thomson Canada Limited
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Factors Affecting Competitor
Retaliation
 The extent of perceived threat by
incumbent firms
 Amount of resources and capabilities of
the defending firm
 The incumbent’s willingness to respond
© 2006 by Nelson, a division of Thomson Canada Limited
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Defensive Marketing Strategies
Defensive Marketing Strategies
Pre-entry Strategies
•Signalling
•Fortify and defend
•Covering all bases
•Continuous improvement
Post-entry Strategies
•Defend position before
entrant becomes entrenched
•Fighting brands
•Cross-parry
•Capacity expansion
© 2006 by Nelson, a division of Thomson Canada Limited
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Principles of Offensive Warfare
The superiority of defence
Concentration of force
The element of surprise
The path of least resistance
Creation of mixed motives for opponent
© 2006 by Nelson, a division of Thomson Canada Limited
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Offensive Marketing Strategies
Offensive Marketing
Strategies
•Frontal attack
•Seeking undefended markets
•Flanking attack
•Break the rules
•Guerrilla attack
•Underdog strategy
•Strategic encirclement
•Judo strategy
•Predatory strategy
•The pivot and the hammer
strategy
© 2006 by Nelson, a division of Thomson Canada Limited
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