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Market Challengers Attack Strategies and their success sto

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Rishab Jain

on 26 February 2016

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Transcript of Market Challengers Attack Strategies and their success sto

Market Challengers Attack Strategies and their success stories
Market Followers
Follower companies do not challenge the market leader. But market followers have to know how to hold on to current customers and win a fair share of customers in the growing market.
The follower firms have a certain advantage for its target market in terms of location, services offered or finance offered.
Followership also involves strategic thinking to be on the growth without inviting competitive retaliation by the leader.

Market-Nicher Strategies
• A niche market is the subset of the market on which a specific product is focused.
• The market niche defines as the product features aimed at satisfying specific market needs, as well as the price range, production quality and the demographics that is intended to impact.
• It is also a small market segment.
• Even large and established companies may choose to use niching strategies for some of their business units or companies.
• In this type of market strategy, though the volume is less the profit margin is high.
• Even the traditional last frontier of mass marketing – the FMCG segment – is not unaffected by the rising niches within the masses. Horlicks for women and products like razors, especially for women, like Satin from Gillete are prime examples of marketers finding niches. Then there is Fair and Handsome from Emami, which propagates the message that ‘Men and women are different so are should be the products they use’.

Challengers
Counterfeiter
The best example of counterfeiting is selling the originals via piracy. Where cloning involves manufacturing of slightly altered products, counterfeiting involves thieving and is a black market follower strategy.
The best example is pirated DVDs and CDs of movies and music. If you notice, time and time again the movie industry wakes up against piracy. This is because, piracy and counterfeiting steals their work. Similarly, you can find shoes from Reebok and Adidas as well as numerous other products in the market which are counterfeited.


Cloner
There is a silver lining between an imitator and a cloner. An imitator might copy some of your product qualities, but it maintains its own product qualities as well. For example – timesjobs.com is an imitator of naukri.com, but then timesjobs has its own unique product characteristics as well. However, if you get watches made from Rado, or bags of Gucci, with Rado spelled as RADA and Gucci spelled as GUCCA, then that’s cloning.

Cloning means making the same product as yours, but with very subtle difference. Cloning makes advantage of the top brands and makes same to same products. The next time you are in Bangkok, try to get the clones of Samsung phones. You will be surprised how similar the original and the clone looks.

Types of followers
Types of Attack Stratergies
A firm that has a market share below that of the market leader, but enough of a market presence that it can exert upward pressure in its effort to gain more control. Market challengers are able to jockey for industry leadership several ways: challenging the market leader on price, increasing product differentiation or improving customer service, or launching an entirely new product or service in order to change the field.
Frontal Attack
Flank Attack
Encirclement
Attack
Bypass Attack
Guerrilla
Attack
Frontal attack is one of the marketing strategies inspired by war tactics.
Frontal attack involves a head on attack on the competitor by matching the competitor in all aspects – product, price, place and promotion.
For a frontal attack to be successful it is believed that the player should have more than three times the power of the opponent.
Types of frontal the pure frontal attack, the price based attack , the, research and development attack and the limited frontal attack
Frontal attack is a highly risky marketing strategy, it has better chances of success if the player attacks the weakest element of the opponent, and also if the opponent is constrained in its ability to react.
Example
Attacking a weak position in the opponent’s force is flank attack. Challenger identifies the weak areas in the offering as well as marketing territories of the opponent and attacks those areas.
It is a side-attack rather than a front attack strategy. This option is particularly attractive to an aggressor with lesser resources than opponents.
Market share gain in weak territories is the objective, but the opponent is forced to defend his share even in his strong territories and products.
There are two strategic dimensions of a flank attack – geographical and segmental.
It does not confront competitors in open
Gains market presence stealthily before competitor realizes (surprise element)
Follow through once the leading position is established
Flank attack does not require new product, but different enough to capture latent needs of the market
Flank attack is generally employed by nimble, innovative business against established players.

Features
Example
The Encirclement Attack is a war strategy adopted by the challenger firm intended to attack the competitor on all the major fronts.
The two strategies that can be used under the encirclement attack are: Product and Market Encirclement.
In order to follow encirclement marketing, the firm must have:
superior financial resources and a willingness to commit them for extended periods of time.
strong R&D and product development capabilities, and the power to influence channel intermediaries.
continuous quality improvement, product proliferation, product line stretching and extension, and a large sales force.


Example
The Bypass Attack is the most indirect marketing strategy adopted by the challenging firm with a view to surpass the competitor by attacking its easier markets.
The 3 approaches for bypass marketing are:
Diversify into the unrelated products,
Diversify into the new geographical markets,
Leapfrog into the new technology

Criteria
Have extensive resources
Be more powerful than the competitor’s firm.

Example
Guerrilla marketing is an advertisement strategy concept designed for businesses to promote their products or services in an unconventional way with little budget to spend.
One of the goals of this interaction is to cause an emotional reaction in the clients and the final goal of marketing is to get people to remember brands in a different way than they are used to.


Types
Ambient marketing
Ambush marketing - Eg : Association of Nike in the 2012 Olympics.
Street marketing
Online guerrilla marketing


Attack marketing is when firms that occupy second, third and lower ranks in the industry (called trailing firms) attack the leader and other competitors in an aggressive bid for further market share and behave as Market Challengers.
What is Marketing Attack Strategy?
Counterfeiter
Cloner
Imitator
Adapter

On July 10, 2015, Serbia representatives and local customs authorities witnessed the destruction of various goods found to infringe the intellectual property rights of Puma, Diesel, Champion, Adidas and Reebok. The destroyed goods included:
4,256 sweatshirts bearing the mark of Puma
1,050 athletic bags bearing the mark of Puma
744 pairs of sneakers bearing the mark of Diesel
1,916 vests bearing the mark of Champion
135 soccer shoes bearing the mark of Adidas
1,392 sweatpants bearing the mark of Reebok
Example
About 98.7% of the value of innovations goes to imitators - this is not surprising as imitators grow the market.
An imitator is not an innovator. He or she provides products that had market acceptance and had been put into the market by innovators, but maintains differentiation in packaging, advertising, pricing.
The imitated product has the same characteristics as the innovators, albeit at a lower price.
There is a huge market for imitators where people want to buy products at lower cost as they cannot afford the higher one.
Imitation jewellery is probably the best and largest example of imitation as market follower strategy.
Imitator
Japanese companies are excellent adapters. Adapter is white collared market strategy. Automobiles use adaptation form of market follower strategy. Cars like Zen, brio, etc are all adapters and they adapt the best qualities from each other by changing the style of automobile.
Similarly , there are technology adapters like Dell laptop and Sony Vaio. These market followers have similar products but they try to adapt from their closest competition.
Adapters can soon become leaders as well because they can adapt , learn and make a better product than the higher competition.

Adapters
Example
Example
Advantages
Higher-margined business
A competitive advantage among other small businesses who don’t know of your niche and among large businesses who simply do not want to bother with that particular segment
More efficient and effective use of marketing that is streamlined and targeted.

A Niche that exploded
Thank
You
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