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Market Leaders, Challengers and Followers. In most markets there is a definite market leader: the firm with the
In most markets there is a definite market leader: the firm with the largest market share. This is often the first company to have entered the field, or at least the first to have succeeded in it. The market leader is frequently able to lead other firms in the introduction of new products, in price changes, in the level or intensity of promotions, and so on. Market leaders usually want to increase their market share even fur- ther, or at least to protect their current market share. One way to do this is to try to find ways to increase the size of the entire market. Contrary to a common belief, wholly dominating a market, or having a monopoly, is seldom an advantage: competitors expand markets and find new uses and users for products, which enrich everyone in the field, but the mar- ket leader more than its competitors. A market can also be expanded by stimulating more usage: for example, many households no longer have only one radio or cassette player, but perhaps one in each room, one in the car, plus a Walkman or two. In many markets there is often also a distinct market challenger, with the second largest market share. In the car hire business, the challenger
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actually advertises this fact: for many years Avis used the slogan “We’re number two. We try harder”. Market challengers can either attempt to attack the leader, or to increase their market share by attacking various market followers. The majority of companies in any industry are merely market fol- lowers which present no threat to the leader. Many market followers concentrate on market segmentation: finding a profitable niche in the market that is not satisfied by other goods or services, and that offers growth potential or gives the company a differential advantage because of its specific competencies. A market follower which does not establish its own niche is in a vul- nerable position: if its product does not have a ‘unique selling proposi- tion’ there is no reason for anyone to buy it. In fact, in most established industries, there is only room for two or three major companies: think of soft drinks, soap and washing powders, jeans, sports shoes, and so on. Although small companies are generally flexible, and can quickly respond to market conditions, their narrow range of customers causes problematic fluctuations in turnover and profit. Furthermore, they are vulnerable in a recession when, largely for psychological reasons, dis- tributors, retailers and customers all prefer to buy from big, well-known suppliers.
Text 3 Read the text and be ready to discuss the marketing research process. Date: 2015-12-13; view: 1595; Нарушение авторских прав |