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Today’schallenging marketing circumstances, however, often dictate that companies reformulate their
marketing strategies and offerings several times. Economic conditions change, competitors
launch new assaults, and buyer interest and requirements evolve. Different market positions can
suggest different market strategies.

This chapter examines the role competition plays and how marketers can best manage their
brands depending on their market position and stage of the product life cycle. Competition grows more
intense every year—from global competitors eager to grow sales in new markets, from online competitors
seeking cost efficient ways to expand distribution, from private-label and store brands providing low-
price alternatives, and from brand extensions by mega-brands moving into newcategories. 2 For these
reasons and more, product and brand fortunes change over time, and marketers must respond accordingly.

1. How can market leaders expand the total market and defend market share?
2. How should market challengers attack market leaders?
3. How can market followers or nichers compete effectively?
4. What marketing strategies are appropriate at each stage of the product life cycle?
5. How should marketers adjust their strategies and tactics for an economic downturn or
recession?

Competitive strategies for Market leaders

Market leaders have the largest share and usually lead in price changes, new product introductions,
distribution coverage, and promotional intensity.

One such well-known brand and market leader is Xerox – more than just a copier company, it paved
the way for color printing and the overall boom of the printing service market through continuous
development and revamping their machines
The now multinational fast food chain, Jollibee, dominates the fast-food industry in the Philippines
today, owning around 65% market share. Perhaps its main competitive advantages over fast food
giants such as McDonald’s and KFC are its relatively higher turnover rates and very low prices

To stay number one, the firm must first find ways to expand total market demand. Second, it must protect its
current share through good defensive and offensive actions. Third, it should increase market share, even if
market size remains constant

Expanding the target market

In general, the market leader should look for new customers or more usage from existing customers. •This
involves gaining NEW CUSTOMERS and giving them NEW WAYS and ADDITIONAL OPPORTUNITIES
to use your brand.

New Customer- Every product class has the potential to attract buyers who are unaware of the product or are
resisting it because of price or lack of certain features.
a company can search for new users among three groups: 1. those who might use it but do not (market
penetration strategy), 2. those who have never used it (new-market segment strategy), or 3. those who live
elsewhere (geographical-expansion strategy).

a good example of this is when starbucks Starbucks sells whole bean coffees through a specialty sales group
and supermarkets. Additionally, Starbucks produces and sells bottled Frappuccino® coffee drinks and a line of
premium ice creams through its joint venture partnerships available in different areas in the world. Now
anyone can have starbucks at home at more reasonable price

UCook, our featured company in our case study presentation, also used these 3 strategies by offering a feast
box that can cater groups during holiday seasons, wine to pair with the food and even a baby food being
offered in different areas in south Africa.

MORE USAGE Marketers can try to increase the amount, level, or frequency of consumption. They can
sometimes boost the amount through packaging or product redesign. Larger package sizes increase the amount
of product consumers use at one time. 5 Consumers use more of impulse products such as soft drinks and
snacks when the product is made more available.

From a meal kit to a feast box, and meal plan subscriptions offered by UCook, they have grown their business
from a garage into South africa’s largest dinner kit service in South Africa. More of the companies products
and details of this company will be presented later.

Increasing frequency of consumption, on the other hand, requires either (1) identifying additional
opportunities to use the brand in the same basic way or (2) identifying completely new and
different ways to use the brand.
Additional Opportunities to Use the Brand A marketing program can communicate the
appropriateness and advantages of using the brand. Clorox ads stress the many benefits of its
bleach, such as that it eliminates kitchen odors, here in the Philippines for example zonrox became popular lalo
po ngayon it became popular as disinfectant.

New Ways to Use the Brand The second approach to increasing frequency of consumption is
to identify completely new and different applications. For example, baking soda which is usually for baking,
also used as deodorant for refrigerator. Arm and Hammer baking soda made use of this as their advertisement
and it became popular and adapted by families in US. Since then, they expanded the brand into variety of new
product categories like toothpaste antiperspirant and detergents.

Protecting Market Share

While trying to expand total market size, the dominant firm must actively defend its current business:

How can the leader do so? The most constructive response is continuous innovation. The front-runner should
lead the industry in developing new products and customer services, distribution effectiveness, and cost
cutting. Comprehensive solutions increase its competitive strength and value to customers.

PROACTIVE MARKETING In satisfying customer needs, we can draw a distinction between

responsive marketing, anticipative marketing, and creative marketing. A responsive marketer finds a
stated need and fills it. An anticipative marketer looks ahead to needs customers may have in the
near future. A creative marketer discovers solutions customers did not ask for but to which they
enthusiastically respond. Creative marketers are proactive market-driving firms, not just market driven
ones.8

Many companies assume their job is just to adapt to customer needs. They are reactive mostly
because they are overly faithful to the customer-orientation paradigm and fall victim to the “tyranny of the
served market.” Successful companies instead proactively shape the
market to their own interests. Instead of trying to be the best player, they change
the rules of the game.9

Proactive companies create new offers to serve unmet— and maybe even unknown—
consumer needs. In the late 1970s, Akio Morita, the Sony founder, was working on a pet
project that would revolutionize the way people listened to music: a portable cassette
player he called the Walkman. Engineers at the company insisted there was little demand
for such a product, but Morita refused to part with his vision. By the 20th anniversary of
the Walkman, Sony had sold over 250 million in nearly 100 different models.10

Proactive companies may redesign relationships within an industry, like Toyota

and its relationship to its suppliers. Or they may educate customers, as Body Shop
does in stimulating the choice of environmental-friendly products.

Companies need to practice “uncertainty management.” Proactive firms:

• Are ready to take risks and make mistakes,
• Have a vision of the future and of investing in it,
Have the capabilities to innovate,
• Are flexible and nonbureaucratic, and
• Have many managers who think proactively.

DEFENSIVE MARKETING
The aim of defensive strategy is to reduce the probability of
attack, divert attacks to less-threatened areas, and lessen their intensity. Speed of response can make an
important difference to profit. A dominant firm can use the six defense strategies, one great example of this is
position defense: Position defense means occupying the most desirable market space in consumers’
minds. It’s like when someone who wants to buy toothpaste and will say, pabili nga po ng colgate, then you’re
thinking of other brand. Ay hindi poi to yung close up.. same goes with “pabili nga po ng pampers, yung eq
dry.

Increasing Market Share

No wonder competition has turned fierce in so many markets: one share point can be worth tens of
millions of dollars.

But Gaining increased share does not automatically produce higher profits,
especially for labor-intensive service companies that may not experience many economies of scale.
Much depends on the company’s strategy

Innovation is also one method by which a company may increase market

share.Consumers always want something new, when a firm brings new technology
its competitor yet to offer, the consumer will buy it from that company even dati na
silang bumibili from the business competitor. and these consumers become loyal
customers, which adds to the companys market share and decreases market share
for the other company

By strengthening customer relationships, companies protect their existing market

share by preventing current customers from jumping ship when a competitor rolls
out a hot new offer. Better still, companies can grow market share using the same
simple tactic, as satisfied customers frequently speak of their positive experience to
friends and relatives who then become new customers. Gaining market share via
word of mouth increases a company's revenues without concomitant increases in
marketing expenses.

uCook was able to increase market share not just by being one of the pioneering meal kit service
in the south Africa but by continuously satisfying their customer, constantly striving to
make meal-making easier, learning as they went, with the hope of making
subscribers’ weeknights all the more enjoyable with every box they
delivered. By tapping into the desire of many busy South Africans who did
not want to miss out on healthy eating, UCOOK was thriving and had to
consider capitalising on the opportunity to expand its product range

Other Competitive Strategies

Firms that occupy second, third, and lower ranks in an industry are often called runner-up or trailing
firms. Some, such as PepsiCo, Ford, and Avis, are quite large in their own right. These firms can adopt
one of two postures. They can attack the leader and other competitors in an aggressive bid for further
market share as market challengers, or they can choose to not “rock the boat” as market followers.
Many market challengers have gained ground or even overtaken the leader. Toyota today produces
more cars than General Motors,

A successful challenger brand in the beverage business cited by Kotler is SoBe

Positioning against the established Snapple and Arizona brands, a smart fruit juice and iced tea alternative
that was fun and innovative and offered added value.
The first successful product was SoBe Black Tea 3G with ginseng, guarana, and ginkgo. SoBe’s
explosive growth was based on a combination of functional benefits (the 3 Gs), colorful packaging, a
powerful sales force establishing strong shelf presence in the store

Market Followers

Theodore Levitt argues that a strategy of product imitation might be as profitable as a strategy of product
innovation.29 In “innovative imitation,” as he calls it, the innovator bears the expense of developing the new
product, getting it into distribution, and informing and educating the market. The reward for all this work and
risk is normally market leadership. However, another firm can come along and copy or improve on the new
product. Although it probably will not overtake the leader, the follower can achieve high profits because it did
not bear any of the innovation expense.

Example:–Pepsi vs. Coke. Although Pepsi may never be as well-consumed, it used a bypass approach to battle
Coke by finding new markets to enter.

•Local Example:–Nissin cup noodles and Lucky Me pancit canton are among the most consumed instant
noodle brands in the country today.

Market-Nicher Strategies•
An alternative to being a follower in a large market is to be a leader in a small market, or NICHE.
•Smaller firms normally avoid competing with larger firms by targeting small markets of little or no interest to
the larger firms, but even large, profitable firms may choose to use niching strategies for some of their business
units or companies.
Example of this is the Vista Land, has a new unit called Lessandra that will focus on the specialized housing
needs of a lower-bracket market, that of the P800,000 to P1.2 million bracket.

Kotler cite Zippo under nicher. With smoking on a steady decline, Zippo Manufacturing is finding the market
for its iconic metal cigarette lighter drying up. Its marketers need to diversify and broaden their focus to
“selling flame.” the company is determined to broaden its brand meaning to encompass “all flame-related
products.” It introduced a long, slender multipurpose lighter for candles, grills, and fireplaces in 2001

Product Life cycle strategies

A company’s positioning and differentiation strategy must change as

the product, market, and competitors change over the product life cycle
(PLC). To say a product has a life cycle is to assert four things:
1. Products have a limited life.
2. Product sales pass through distinct stages, each posing different
challenges, opportunities, and problems to the seller.
3. Profits rise and fall at different stages of the product life cycle.
4. Products require different marketing, financial, manufacturing,
purchasing, and human resource strategies in each life-cycle stage.

Product Life Cycles

Most product life-cycle curves are portrayed as bell-shaped (see
Figure 11.4). This curve is typically divided into four stages: introduction,
growth, maturity, and decline.37
1. Introduction—A period of slow sales growth as the product is introduced in the market.
Profits are nonexistent because of the heavy expenses of product introduction.
Marketing Strategies: Introduction
Stage and the Pioneer Advantage
Companies that plan to introduce a new product must decide when to enter the market. To be
first can be rewarding, but risky and expensive. To come in later makes sense if the firm can bring
superior technology, quality, or brand strength to create a market advantage.
Speeding up innovation time is essential in an age of shortening product life cycles. Being early
has been shown to pay but Most studies indicate the market pioneer gains the greatest advantage. 48 Campbell,
Coca-Cola, Hallmark, and Amazon.com developed sustained market dominance. Nineteen of twenty-five
market leaders in 1923 were still the market leaders in 1983, 60 years laters.
What are the sources of the pioneer’s advantage?51 Early users will recall the pioneer’s brand
name if the product satisfies them. The pioneer’s brand also establishes the attributes the product
class should possess.52 It normally aims at the middle of the market and so captures more users.
But the advantage ofcourse is not inevitable.54 Bowmar (hand calculators), Apple’s Newton (personal
digital assistant),Netscape (Web browser), Reynolds (ballpoint pens), and Osborne (portable computers)
were market pioneers overtaken by later entrants. First movers also have to watch out for
the “second-mover advantage.” Remember the challenger strategies. The runner ups might overcome the
leader.

2. Growth—A period of rapid market acceptance and substantial profit improvement.

The growth stage is marked by a rapid climb in sales. Early adopters like the product and additional
consumers start buying it. New competitors enter, attracted by the opportunities. They introduce
new product features and expand distribution.

Firms must watch for a change to a decelerating rate of growth in order to prepare new strategies.
To sustain rapid market share growth now, the firm:
• improves product quality and adds new features and improved styling.
• adds new models and flanker products (of different sizes, flavors, and so forth) to protect the
main product.
• enters new market segments.
• increases its distribution coverage and enters new distribution channels.
• shifts from awareness and trial communications to preference and loyalty communications.
• lowers prices to attract the next layer of price-sensitive buyers.

By spending money on product improvement, promotion, and distribution, the firm can capture
a dominant position. It trades off maximum current profit for high market share and the hope
of even greater profits in the next stage.

3. Maturity—A slowdown in sales growth because the product has achieved acceptance by most
potential buyers. Profits stabilize or decline because of increased

At some point, the rate of sales growth will slow, and the product will enter a stage of relative maturity.
Most products are in this stage of the life cycle, which normally lasts longer than the preceding ones.

Some companies abandon weaker products to concentrate on new and more profitable ones. Yet they may be
ignoring the high potential many mature markets and old products still have. Industries widely thought to be
mature—autos, motorcycles, television, watches, cameras—were proved otherwise by the Japanese, who
found ways to offer customers new value.

Three ways to change the course for a brand are market, product, and marketing program modifications.
MARKET MODIFICATION A company might try to expand the market for its mature brand
by increasing the usage rate among users

PRODUCT MODIFICATION Managers also try to stimulate sales by improving quality,

features, or style.

Quality improvement increases functional performance by launching a “new

and improved” product. Instant pancit canton- from round to flat noodles

Feature improvement adds size, weight, materials, supplements, and

accessories that expand the product’s performance, versatility, safety, or convenience. From original flavor
with chili and clamansi

Style improvement increases the product’s esthetic appeal. Any of these can attract consumer attention. This
has something to do with the packaging of the product

MARKETING PROGRAM MODIFICATION Finally, brand managers might also try to

stimulate sales by modifying nonproduct elements—price, distribution, and communications in
particular. They should assess the likely success of any changes in terms of effects on new and
existing customers

4. Decline—Sales show a downward drift and profits erode.

Marketing Strategies: Decline Stage
Sales decline for a number of reasons, including technological advances, shifts in consumer tastes,
and increased domestic and foreign competition. All can lead to overcapacity, increased price cutting, and
profit erosion.
The strategies in this stage are:
Reduce expenditures
Phase out the weak products
Cut price
Selective phasing out

SWOT

Strength

1. Dominated the South African meal kit sector

For the past three years, UCOOK had dominated the South African meal kit sector, creating an
insatiable demand in this newly established category.This niche service’s growth within the e-
grocery category had garnered much attention from investors and competitors alike.

2. Fast follower in terms of global meal kit phenomena

- it paid to be the fast-follower in terms of the global meal kit phenomena, and to be the second
meal kit entrant in the South African market. DailyDish was the first to launch mealkits in South
Africa, yet, despite its theoretically expected first-mover advantage, DailyDish had not grown its
user base to much more than a few hundred deliveries per month. Therefore, UCOOK’s fast-
follower positioning gave the business the opportunity to assimilate and leverage the learnings
and experiences of the meal kit pioneers. UCOOK trialled its minimum viable product on a low
scale for about 18months to test the South African market’s susceptibility and was bowled over
by the overwhelmingly positive response. From a unit economics perspective, UCOOK was
arguably the most successful meal kit service in the world

3. Brand’s personable and pioneering approach

illustrated by its brand essence, was to encourage discovery andexploration in the

food and beverage environment. UCOOK’s tight-knit team andunequivocal
entrepreneurial spirit were evident in the brand’s personable and
pioneeringapproach, its packaging, and the brand personality at all consumer
touchpoints. Instead ofappealing to its natural, organic credentials, UCOOK did not
lead their marketingcampaigns with a “we are better” highbrow tactic but positioned
the brand as anapproachable, convenient option for the “curious consumer”

4. Slick and well design website

5. Sustainable and ethically sourced produced
“Its predominantly organic, pasture-reared and seasonal ingredients help you to eat
welland live better,” echoed David. Urban and rural farming projects as well as small
localpurveyors were supported
6.
7. Brand-led business and strategic partnerships
UCOOK strategically aligned itself with successful person-brands. UCOOK stayed
true toits exploratory-inclined and aspirational brand essence by collaborating with
an array ofaward-winning, big-name chefs (Exhibit 10) whose recipes had all been
incorporated intoUCOOK’s running weekly menus
With their meal kits currently only available via the UCOOK website, David was
cognisantthat the most effective brands depended on a combination of share-of-mind
(unpromptedconsumer awareness and recognition), share-of-shelf (physical space
occupied in retailer/distribution channel), and share-of-stomach (variety of products
supplied by a singlecompany to increase consumers’ basket size).
The recent injection of R8m[13] by venturecapital firm Silvertree Internet
Holdings[14] gave UCOOK an even greater springboard fromwhich to grow its
business. The Silvertree team had invested heavily in UCOOK’s marketingas well as
distribution channels and partnerships, meticulously monitoring, supporting,
andaligning UCOOK with potential retailers who understood the market and the
brand.

UCOOK pegged its primary serviceable available market (SAM) as LSM[12] 7-10
SouthAfrican urbanites, predominantly females between the ages of 24 and 45. The
individualswithin this bracket equated to roughly 679,000 potential consumers.A
projection of UCOOK’s current annual growth rate, based on the number of
customersreached (i.e. subscribers who had ordered a single box at least once),
determined thatUCOOK’s SAM would be saturated by 2023. At the current
conservative growth rate of 1per cent,ceteris paribusUCOOK would have reached its
entire target market, therebyrunning out of new customers within five years