In: Categories » » Business development » Perspectives of Market Strategies
I. Market-Scope Strategy
A. Single-Market Strategy Definition: Concentration of efforts in a single segment. Objective: To find a segment currently being ignored or served inadequately and meet its needs. Requirements: (a) Serve the market wholeheartedly despite initial difficulties. (b) Avoid competition with established firms. Expected Results: (a) Low costs. (b) Higher profits.
B. Multimarket Strategy Definition: Serving several distinct markets. Objective: To diversify the risk of serving only one market. Requirements: (a) Carefully select segments to serve. (b) Avoid confrontation with companies serving the entire market. Expected Results: (a) Higher sales. (b) Higher market share.
C. Total-Market Strategy Definition: Serving the entire spectrum of the market by selling differentiated products to different segments in the market. Objective: To compete across the board in the entire market. Requirements: (a) Employ different combinations of price, product, promotion, and distribution strategies in different segments. (b) Top management commitment to embrace entire market. (c) Strong financial position. Expected Results: (a) Increased growth. (b) Higher market share.
II. Market-Geography Strategy
A. Local-Market Strategy Definition: Concentration of efforts in the immediate vicinity. Objective: To maintain control of the business. Requirements: (a) Good reputation in the geographic area. (b) Good hold on requirements of the market. Expected Results: Short-term success; ultimately must expand to other areas.
B. Regional-Market Strategy Definition: Operating in two or three states or over a region of the country (e.g., New England). Objectives: (a) To diversify risk of dependence on one part of a region. (b) To keep control centralized. Requirements: (a) Management commitment to expansion. (b) Adequate resources. (c) Logistical ability to serve a regional area. Expected Results: (a) Increased growth. (b) Increased market share. (c) Keep up with competitors.
C. National-Market Strategy Definition: Operating nationally. Objective: To seek growth. Requirements: (a) Top management commitment. (b) Capital resources. (c) Willingness to take risks. Expected Results: (a) Increased growth. (b) Increased market share. (c) Increased profitability.
D. International-Market Strategy Definition: Operating outside national boundaries. Objective: To seek opportunities beyond domestic business. Requirements: (a) Top management commitment. (b) Capital resources. (c) Understanding of international markets. Expected Results: (a) Increased growth. (b) Increased market share. (c) Increased profits.
III. Market-Entry Strategy
A. First-In Strategy Definition: Entering the market before all others. Objective: To create a lead over competition that will be difficult for them to match. Requirements: (a) Be willing and able to take risks. (b) Be technologically competent. (c) Strive to stay ahead. (d) Promote heavily. (e) Create primary demand. (f) Carefully evaluate strengths. Expected Results: (a) Reduced costs via experience. (b) Increased growth. (c) Increased market share. (d) Increased profits.
B. Early-Entry Strategy Definition: Entering the market in quick succession after the leader. Objective: To prevent the first entrant from creating a stronghold in the market. Requirements: (a) Superior marketing strategy. (b) Ample resources. (c) Strong commitment to challenge the market leader. Expected Results: (a) Increased profits. (b) Increased growth. (c) Increased market share.
C. Laggard-Entry Strategy Definition: Entering the market toward the tail end of growth phase or during maturity phase. Two modes of entry are feasible: (a) Imitator Entering market with me-too product; (b) Initiator Entering market with unconventional marketing strategies. Objectives: Imitator To capture that part of the market that is not brand loyal. Initiator To serve the needs of the market better than present firms. Requirements: Imitator (a) Market research ability. (b) Production capability. Initiator (a) Market research ability. (b) Ability to generate creative marketing strategies. Expected Results: Imitator Increased short-term profits. Initiator (a) Putting market on a new growth path. (b) Increased profits. (c) Some growth opportunities.
IV. Market-Commitment Strategy
A. Strong-Commitment Strategy Definition: Fighting off challenges aggressively by employing different forms of product, price, promotion, and distribution strategies. Objective: To defend position at all costs. Requirements: (a) Operate optimally by realizing economies of scale in promotion, distribution, manufacturing, etc. (b) Refuse to be content with present situation or position. (c) Have ample resources. (d) Be willing and able to take risks. Expected Results: (a) Increased growth. (b) Increased profits. (c) Increased market share.
B. Average-Commitment Strategy Definition: Maintaining stable interest in the market. Objective: To maintain the status quo. Requirements: Keep customers satisfied and happy. Expected Results: Acceptable profitability.
C. Light-Commitment Strategy Definition: Having only a passing interest in the market. Objective: To operate in the black. Requirements: Avoid investing for any long-run benefit. Expected Results: Maintenance of status quo (no increase in growth, profits, or market share).
V. Market-Dilution Strategy
A. Demarketing Strategy Definition: Discouraging customers in general or a certain class of customers in particular, either temporarily or permanently, from seeking the product. Objective: To maintain customer goodwill during periods of shortages. Requirements: (a) Monitor customer time requirements. (b) Ration product supplies. (c) Divert customers with immediate needs to customers who have a supply of the product but no immediate need for it. (d) Find out and suggest alternative products for meeting customer needs. Expected Results: (a) Increased profits. (b) Strong customer goodwill and loyalty.
B. Pruning-of-Marginal-Markets Strategy Definition: Weeding out markets that do not provide acceptable rates of return. Objective: To divert investments in growth markets. Requirements: (a) Gain good knowledge of the chosen markets. (b) Concentrate all energies on these markets. (c) Develop unique strategies to serve the chosen markets. Expected Results: (a) Long-term growth. (b) Improved return on investment. (c) Decrease in market share.
C. Key-Markets Strategy Definition: Focusing efforts on selected markets. Objective: To serve the selected markets extremely well. Requirements: (a) Gain good knowledge of the chosen markets. (b) Concentrate all energies on these markets. (c) Develop unique strategies to serve the chosen markets. Expected Results: (a) Increased profits. (b) Increased market share in the selected markets.
D. Harvesting Strategy Definition: Deliberate effort to let market share slide. Objectives: (a) To generate additional cash flow. (b) To increase short-term earnings. (c) To avoid antitrust action. Requirements: High-market share. Expected Results: Sales decline but useful revenues still come in.
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