Amy has a master's degree in secondary education and has taught math at a public charter high school.
Marketing for Market Leaders
Imagine that you have your own thriving restaurant, Eat At Jane's. You are consistently rated as the number one restaurant in town, and people come from all around to eat at your establishment. You are one of the restaurant market leaders in your area.
But that doesn't mean you can take it easy and not worry about marketing. You have to make sure you can keep your customers, especially as other restaurants come take away some of your market share. You also want to get those late adopters to come try your business at last.
Here are some strategies that can be used singly or in combination with one another.
Position Defense Strategy
One strategy market leaders can use is called the position defense strategy, aka 'fortress' strategy, where you essentially build a fortress around your business, protecting it against the competition.
Create an ongoing marketing campaign that reminds your current and potential customers why your product or company is the best. You can deter your customers from other products or businesses, and you can sign exclusive contracts with key vendors.
For example, Eat At Jane's might sign exclusive contracts with vendors of certain organic produce. This way, you ensure that only your restaurant is able to offer dishes with these select organic produce. By doing this, it makes your restaurant special and maintains your position as the go-to restaurant in town.
Another strategy is the flanker strategy, where you create a 'flanker' brand that somewhat competes with your current brands, but appeals to a different market. For example, Proctor and Gamble makes Tide but has also created the flanker brand Cheer to appeal to more cost-conscious customers. Cheer is a slightly lower quality, but its affordability increased the overall market share of the main company, Proctor and Gamble.
For your Eat At Jane's, a flanker strategy may be to offer a value menu of perhaps smaller portions of your most popular dishes. Yes, it may mean less people will order your full price dishes, but the increase in business will probably mean you make more profit at the end of the day.
If you see that your competitors are actively competing against you, try the confrontation strategy, which has you actively working to confront competition that arises. Confrontation strategy contributes less to social welfare than would more innovative responses.
For example, if another nearby restaurant offers a similar menu item, Eat At Jane's might suddenly reduce the price of their own version to deter customers and send a bit of a message to that other restaurant. Managers might even discourage vendors from servicing that competitor, but these methods come with some risk and a general feeling of overall bad will, which can backfire.
Market Expansion Strategy
If your business has reached its peak in a certain market, you can then use the market expansion strategy to branch out into other, similar markets.
For example, Eat At Jane's might start to offer a delivery service to bring in even more customers. They might also start to sell some of your most favorite sauces at local grocery stores, or start a special events service. The sky's the limit on expansion.
Strategic Withdrawal Strategy
If your business is already operating in several markets, you might try the strategic withdrawal strategy (or contraction strategy) in other words withdrawing from the less successful of the various markets you've branched into. By backing out of these smaller less profitable markets, the business can dedicate even more resources towards those markets that are larger and more profitable.
For example, if Eat At Jane's restaurant finds that the delivery market isn't very profitable, then it would strategically withdraw and stop offering the delivery service. Instead of spending money on drivers, you can now spend that money into focusing on your sauces market or your restaurant.
Just because your business is a market leader doesn't mean you can skimp on your marketing. Marketing will help you to maintain that lead position, as well as tap into markets for even more profit. Here are some different strategies you can employ.
The position defense strategy is used to prevent competition from hurting your company. Also called the fortress strategy, you are essentially building a fortress around your business. Create marketing campaigns that remind your customers why your company is the best, deter them from others, or make it difficult for other similar businesses to compete with you.
The flanker strategy helps to gain even more market share by creating a similar product that targets a different market.
Use the confrontation strategy to compete directly with your competitors perhaps by lowering prices when they copy a product.
If your business has peaked in its own market, try the market expansion strategy and branch out into other markets that are still related to your business.
If you are in multiple markets, and one proves to be less profitable, try thestrategic withdrawal strategy (aka contraction strategy). Cut off a less successful market to pursue your other more profitable ones.
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