McGraw-Hill OnlineMcGraw-Hill Higher EducationLearning Center
Student Centre | instructor Center | information Center | HOME

Glossary
Chapter Outline
Chapter Overview
Discussion Questions

Marketing Management, 4/e
Harper W Boyd
Orville C Walker, Jr
John W Mullins
Jean-Claude Larreche
Strategic Choices for New and Growing Markets

Chapter Overview

  • Being the pioneer in a new product or service category gains a firm a number of potential advantages. But not all pioneers are able to sustain a leading position in the market as it grows. A pioneering firm stands the best chance for long-term share leadership and profitability when the market can be insulated from the rapid entry of competitors by patent protection or other means and when the firm has the necessary resources and competencies to capitalize on its first-mover advantages.
  • Some pioneers attempt to penetrate the mass market and remain the share leader as that market grows. Others adopt a strategy geared to making profits from specialized niche markets where they will face fewer direct competitors. Still others try to stay one jump ahead of competitors by introducing a stream of new products and withdrawing from older markets as they become more competitive. The appropriate strategy to adopt depends on the firm’s resources and competencies, the strength of likely competitors, and the characteristics of the product and its target market.
  • If a market leader wishes to maintain its number one share position as the product category moves through rapid growth, it must focus on two important objectives:
    1. retaining its current customers, and
    2. stimulating selective demand among later adopters.
    Marketing strategies a leader might adopt to achieve these objectives are position defense, flanker, confrontation, market expansion, and contraction. The best one to choose depends on the homogeneity of the market and the firm’s resources and competencies relative to potential competitors.
  • For a challenger to increase its market share relative to the leader, it must differentiate its offering by delivering superior product benefits, better service, or a lower price than the leader. Challenging a leader solely on the basis of price is a highway to disaster, however, unless the challenger has a sustainable cost advantage.







Copyright2001 A McGraw-Hill Online Learning Centre
Any use is subject to the Terms of Use and Privacy Policy.
McGraw-Hill Education Europe is one of the many fine businesses of The McGraw-Hill Companies.