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8/8/2014

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  1. Defensive and Offensive Marketing Strategies Chapter 14 Slides developed by: Peter Yannopoulos 8/8/2014

  2. 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

  3. 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

  4. 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

  5. Defensive Marketing Strategies Because of ongoing rivalry, established firms need to engage in defensive strategies to fend off various challengers

  6. The primary purpose of defensive marketing strategies….. is to make a possible attack unattractive and discourage potential challengers from attacking a firm

  7. 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

  8. 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

  9. Defensive Marketing Strategies Defensive Marketing Strategies Pre-entry Strategies • Signalling • Fortify and defend • Covering all bases • Continuous improvement • Capacity expansion Post-entry Strategies • Defend position before entrant becomes entrenched • Fighting brands • Cross-parry

  10. 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

  11. Offensive Marketing Strategies Offensive Marketing Strategies • Frontal attack • Flanking attack • Guerrilla attack • Strategic encirclement • Predatory strategy • Seeking undefended markets • Break the rules • Underdog strategy • Judo strategy • The pivot and the hammer strategy