Marketing Strategies
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1. The text indicates that share leaders have to work harder than share followers to protect share. Do you really think Coke and Pepsi have to work harder than Ale 8? Shouldn't there be a perceived momentum held by market leaders in which consumers prefer to do business with "the big guys?" Does Goodyear really need to work harder than Goodrich in the tire market? Convince me, please.
2. What strategy would you follow if you were a small business owner? What factors would influence your decision? What conditions would lead a small business to pursue an offensive, defensive, or reduced market focus strategy? Can you think of small business examples?
3. How does the market (high-growth, slow-growth, no growth) affect the strategy used by a company? Does market condition matter to market leader strategy? Follower strategy? How does market condition affect exit strategies?
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The solution addresses:
1. The text indicates that share leaders have to work harder than share followers to protect share. Do you really think Coke and Pepsi have to work harder than Ale 8? Shouldn't there be a perceived momentum held by market leaders in which consumers prefer to do business with "the big guys?" Does Goodyear really need to work harder than Goodrich in the tire market? Convince me, please.
2. What strategy would you follow if you were a small business owner? What factors would influence your decision? What conditions would lead a small business to pursue an offensive, defensive, or reduced market focus strategy? Can you think of small business examples?
3. How does the market (high-growth, slow-growth, no growth) affect the strategy used by a company? Does market condition matter to market leader strategy? Follower strategy? How does market condition affect exit strategies?
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1. The text indicates that share leaders have to work harder than share followers to protect share. Do you really think Coke and Pepsi have to work harder than Ale 8?
Yes. Coke and Pepsi are direct competitors. Ale 8 is distributed in Kentucky and in limited quantities in the states surrounding Kentucky. Ale 8 is more of a specialty beverage than a main stream beverage, such as Coke and Pepsi.
Ale 8 has its demographic and does well in its region. The demographic of Coke and Pepsi is the word itself, as the products are available in almost every nation. Each work hard to maintain and increase their market share and their advertising dollars prove it so.
The New York Times has reported that Coke's market share is slipping and has slipped from 56% to 53% in 2006, showing that Pepsi is encroaching on Coke's territory. (NYT 2006)
Reference: New York Times 2006 - http://www.nytimes.com/ref/business/20070527_COKE_GRAPHIC.html#
Shouldn't there be a perceived momentum held by market leaders in which consumers prefer to do business with "the big guys?"
Consumers shop where it is cost effective and convenient and if "the big guys" is a convenient location that has the best pricing; this is where the sale will be made. We must remember that "the big guys" have the vendor bargaining edge that can ensure low prices. Let's look at Wal-Mart, the world's largest retailer.
When it comes to pricing, Wal-Mart is the world's leader. There is not one retailer who can consistently sell their products lower than ...
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