Increasingly, one often comes across marketing terms that are borrowed from the vocabulary of military strategy. From “launching a breakthrough campaign” to the “cola wars”, the analogy between marketing and warfare is apparent and can be easily linked with each other.
Firms are often under a misconception that harder they attach the better it is but in reality it is the strategy and not hard work that determines the success. A company’s strategy for fighting a marketing war can be classified under 4 categories they are:
The strategy adopted by a firm often depends on its market share relative to that of its competitor. In order to understand this concept in a better way we can assume an analogy where there are four firms and each is approximately twice the size of the next closest to it.
In such an environment, each of the four firms has different objectives:
- Number 1 firm: Market domination
- Number 2 firm: Increased market share
- Number 3 firm: Profitable survival
- Number 4 firm: Survival
Consider the case of the firm which is having the largest market share at present. In this case if the market leader attempts to grow larger, then anti-trust issues will be raised. If a major market leader wins the marketing war and causes the next largest firm to exit the market, then the government may take steps to break up the firm that is dominating the market. Consequently, the best strategy for such a firm is a defensive one since it just has to nullify the marketing efforts of other firms existing in the market.
The number two firm’s best strategy is an offensive attack on the market leader if there is a large gap between the number two firm and number three. The reason is that the gaining of market share from the number three firm is unlikely to make a large impact on the much larger number two firm. However, there are potentially significant rewards if market share can be gained from the dominant firm.
The number three firm is too small to sustain an offensive attack on a larger firm. Its best strategy would be therefore to launch a flanking attack so as to avoid any sort of direct competition. This can be done by launching a product that is positioned differently from others existing in the market.
The smallest firm would not be having enough resources to sustain an attack. So such a firm will pursue a guerrilla strategy where in it will identify a segment which is not that large to attract big players but big enough to hold small firms interested.
The above article has been put by Sankalp Kohli, a student of MPSTME. Connect with him on his facebook page.