Competitive Marketing Strategy Brown

1
Competitive Marketing Strategy-Brown

• Chapter 4.
• Strategic Issues in Declining Markets
• Presented by
• David So Zhu Bin

2
Overview

• What is declining market?
• Product-life cycle
• Market Leadership Issues in Declining Market
• Market Leader Strategic Directions
• Alternative Routes to Profit Improvement
• Strategic Issues for Declining Market
• Strategy packages

3
What is Declining Market?
4
Product-Life Cycle
Product Sales
Introduction
Growth
Maturity
Decline
5
Market Leadership Issues in Declining Market

• Profitability
• Competition Market Position
• Distribution Channel Relationships
• Market Perception
• Residual opportunities any static or growing
  segments
• Possible customers change patterns from old
  products to new substitutes
• New product or market opportunities associated
  with the decline of the product/ market

6
Market Leader Strategic Directions

• Cost leadership Vs Differentiation
• Coverage Vs Focus
• Industry Expectations
• Market Expectations
• Distributors Focus Vs End User Focus
• Push Vs Pull Strategy
• Own Brands Vs Private Labels
• Target Marketing Vs Mass Marketing
• Market Development Vs Diversification

7
Cost leadership Vs Differentiation
8
Five Generic Strategies
Competitive Advantage
Cost
Uniqueness
Cost Leadership
Differentiation
Broad target
Integrated Cost Leadership/ Differentiation
Competitive Scope
Narrow target
Focused Cost Leadership
Focused Differentiation
9
Market Expectations

• Re-assess the product to customers
• Product quality is traded by customers
• Convenience
• Availability
• Services
• Price

10
Push Vs Pull Strategy

• Push
• Involve all marketing effort of distribution
  channels
• Little direct create brand awareness
• Less advertising promotion
• brand preference is created
• Quality
• Availability
• Services
• Competitive price

11

• Pull
• Substantial advertising promotion
• Reply on consumer awareness brand preference

12
Target Marketing Vs Mass Marketing

• Mass Marketing
• one single marketing mix for the entire
  market
• Target Marketing
• different marketing mixes for different
  market segments

13
Market Development Vs Diversification
14
Ansoff Matrix Model
Products
Current
New
Market Penetration
Product Development
Current
Market
Market Development
New
Diversification
15
Alternative Routes to Profit Improvement

• Sales growth
• Productivity improvement from changing the assets
• Reduce costs
• Improve efficiency
• Selectively increase price to improve margins
• Change the sales mix in favor of higher margin
  products
• Combination of these two.

16
Strategic Issues for Declining Market

• Only business which learn to provide
  customers and clients with exactly what they
  want, will survive and proper. Those relying on
  volume growth (more people with more money) will
  be history, says futurist Ian Ivey.
• New Zealand Trade and Enterprise (2003)

http//www.cartoonstock.com/lowres/jmo1140l.jpg
17
Strategic Issues for Declining Market (Cont)

• Countercyclical

Introduction
Growth
Maturity
Decline
Innovations
18
Strategic Issues for Declining Market (Cont)

• Adapting what you sell to the changing
  environment

19
Strategic Issues for Declining Market (Cont)

• Re-launch re-position
• Re-packed
• Re-targeted
• Growth in emerging markets
• Catch the opportunity in declining market
• Make an appropriate response

20
Strategic Issues for Declining Market (Cont)

• Turn-around Strategies
• A form of retrenchment that emphasizes the
  improvement of operational efficiency
• Types
• Contraction
• Consolidation

21
Strategic Issues for Declining Market (Cont)

• Growth Strategies in Declining Market
• Diversification
• Methods
• Internal development
• new products
• services
• customer segments
• geographic markets including international
  expansion
• Acquisition or joint ventures
• Case study Repco Hills exhausts joint
  venture-National Exhaust Industries

22
Strategy Packages

• Elements Strategy
• Strategy 1 Strategy 2
• Generic Differentiation Cost leadership
• Focus Coverage Narrow to volume segment
• Market End user Distributor
• Marketing effort Pull Push
• Branding Own Private labels
• Segmentation targeting Mass
• Strategic direction Diversification Market
  penetration

23
Questions
24

• References
• Howard S. 2001, Growth or Retrenchment Strategy
  Choices for Declining Entrepreneurial Firms The
  Effects of Performance and Resources, University
  of South Florida, Tampa, Florida, USA
• Mangelsdorf, Martha E 1994, Growing with the
  Flow, Vol. 16, Issue 11
• Mario P 1998, Strategy in declining markets, 22
  Nov. 2004 viewed at lthttp//users.skynet.be/mpy/de
  clini.htmgt
• New Zealand Trade and Enterprise 2003,
  Developing Resilience in the Face of Declining
  Markets, July notebook 10-11
• Value Based Management. Net, 2004, Ansoff
  Business Unit Strategy Model viewed on 15 Nov.
  04 lthttp//www.valuebasedmanagement.net/methods_pr
  oductmarketgrid.htmlgt

25
Thank you!