Principles and Practice of Marketing
fourth edition
DAVID JOBBER
Chapter 19
Competitive Marketing Strategy
D Jobber, Principles and Practice of Marketing, © 2004 McGraw-Hill
The strategic triangle
Company
Customers
D Jobber, Principles and Practice of Marketing, © 2004 McGraw-Hill
Competitors
Strategic thrust: the generic options
Markets
Products
Existing
New/related
Existing
New/related
Market
Market
penetration or
development
expansion
Product
development
D Jobber, Principles and Practice of Marketing, © 2004 McGraw-Hill
Enter new
markets
Attack strategies
4. Bypass attack
5.
Guerrilla
attack
2. Flanking attack
Attacker
1. Frontal attack
3. Encirclement
D Jobber, Principles and Practice of Marketing, © 2004 McGraw-Hill
Defender
Some key European strategic alliances
Companies
Competitive area
Electrolux-AEG
Maerk-P&O
Rolls-Royce-Pratt&Whitney
GEC-Alstholm
Hoechst-Mitsubishi
Lufthana-United Airlines
Nestle-Baxter Healthcare
Nestle-General Mills
Unilever-PepsiCo
Household appliances
Shipping services to Middle East
Aero-engines
Power engineering
Disperse dyes
Airlines
Clinical nutrition
Ready to eat breakfast cereals
Develop & distribute tea based products in
USA
Pharmaceuticals
Cars
Sell disks on-line
Computer & telecommunications products
Glaxo-Roche
Ford-GM
Seagram-Bartelsmann
Microsoft-BT
D Jobber, Principles and Practice of Marketing, © 2004 McGraw-Hill
Build objectives
Strategic focus
Attractive conditions
Growth markets
Exploitable competitive weakness
Exploitable corporate strengths
Adequate corporate resources
D Jobber, Principles and Practice of Marketing, © 2004 McGraw-Hill
Market expansion
New users
New uses
Increased frequency of use
Winning market share
Product innovation
Distribution innovation
Promotional innovation
Penetration pricing
Competitor confrontation
Merger or acquisition
Forming strategic alliances
Attack strategies
2
Flanking
defence
3 Pre-emptive
defence
1
Position
defence
Attacker
4 counteroffensive
defence
5 Mobile defence
D Jobber, Principles and Practice of Marketing, © 2004 McGraw-Hill
6
Strategic
withdrawal
Defender
Hold objectives
Attractive conditions
Market leader in a mature
or declining market
Costs exceed benefits of building
D Jobber, Principles and Practice of Marketing, © 2004 McGraw-Hill
Strategic focus
Monitoring the competition
Confronting the competition
Niche objectives
Attractive conditions
Small budget
Strong competitors dominating
major segments
Pockets existing for profitable
operations
Creating a competitive advantage
D Jobber, Principles and Practice of Marketing, © 2004 McGraw-Hill
Strategic focus
Market segmentation
Focused R&D
Differentiation
Thinking small
Harvest objectives
Attractive conditions
Market is mature or declining
(dog products)
In growth markets where costs of
building or holding exceed the
benefits (selected problem children)
Care of loyal customers
Future breadwinners exist
D Jobber, Principles and Practice of Marketing, © 2004 McGraw-Hill
Strategic focus
Eliminate R&D expenditure
Product reformulation
Rationalise product line
Cut market support
Consider increasing price
Divest objectives
Attractive conditions
Loss-making products or business
drain on resources
Often low share in declining markets
Costs of turnaround exceed benefits
Removal will not significantly affect
sales of other products
D Jobber, Principles and Practice of Marketing, © 2004 McGraw-Hill
Strategic focus
Get out quickly:
Minimise the costs