Marketing Strategies for Market Leaders, Challengers, Followers and Nichers

This chapter looks at designing "winning strategies" for organisations that takes into account; the competitor situation of a market, stages in the organisation's product life cycle and global opportunities & challenges.

Kotler argues; "Competitors in a particular target market will, at any point in time, differ in their objectives and resources, and hence in their strategies."

I have often come across companies that claim they have "maxed out" in their market - I think they mean that they have probably reached the maximum market share level possible. In this case, the objective maybe to maintain this position and defend against competitor attack - not easy but with a well planned strategy, this is achieveable.

Also, many companies are not number one in their market and they look to get to that position - should you attack the number one player or is there a 'softer' target ?

This chapter by Kotler looks at various positions an organisation can take within their market - he actually lists six positions that he has taken from Arthur D Little, a management consultant firm.

Kotler goes onto discuss how a 'market leader', 'market challenger', 'market follower' and 'market nicher' can design their strategy based upon their objectives, resources and competitive strengths.

In summary, Kotler says that a 'market leader' faces three options; i) expand the total market and by retaining the same share position, their business will grow, ii) protect current position by defending off attacks from competitors, and iii) growing market share.

Kotler also covers options fro the other three positions of the organisation.

This chapter is still, I think, very real and relevant for today's marketer - we are all faced with the dynamics of whatever market we are working in. And it is true to say that when I work with an organisation on their strategy, their competitors are also working on theirs - and if they are not, we should adopt the position that they could be.

Identifying Market Segments, Selecting Market Targets, and Developing Market Positions

This chapter starts with Kotler talking about the importance of recognizing that companies cannot effectively serve all customers in a market. "The firm, instead of competing everywhere, often against superior odds, needs to identify the most attractive market segments that it can serve effectively."

Kotler goes on to say: "the heart of modern strategic marketing can be described as STP marketing - namely, segmenting, targeting and positioning. This does not obviate the importance of LGD marketing - lunch, golf and dinner" !

Kotler explains that sellers have not always held this view and marketing thinking has passed through three phaes; i) mass marketing, ii) product-variety marketing and iii) target marketing.

In today's world, most companies adopt the target market approach and by using new technologies effectively, marketers are able to target customers and importantly, measure response.

Even today, marketers need to follow Kotler's three step approach to Market Segmentation, Targeting and Positioning;

• Identify segmentation variables & segment the market
• Develop profiles of resulting segments
• Evaluate the attractiveness of each segment
• Select the target segments
• Identify possible positioning concepts for each target segment
• Select, develop, and signal the chosen positioning concept

 Getting this stage of your marketing strategy correct is clearly critical to developing an effective strategy. Get it wrong and your business is heading for disaster.