A company’s marketing strategy can be customer- (i.e., strategy designed by exam

Question

A company’s marketing strategy can be customer- (i.e., strategy designed by examining primarily customer needs) or competitor-oriented (i.e., strategy based on competitors’ actions). In reality, companies do both. For the following scenarios, identify which strategies to emphasize and why.

A market leader in pharmaceuticals

A market follower in mature market

A market nicher (i.e., company focused on a small segment) in interior decoration of luxury homes

A market challenger in a mature market with low margins and significant economies of scale effect

Explanation / Answer

A market leader in the pharmaceuticals would share the major share in the pharmaceutical industry. The market leader always needs to update the product to remain as leaders and focus on competitors to develop better strategies. The strategies should help them to maintain the competitive advantage over other companies in the market. Hence the better strategy here is a competitor oriented strategy.

Market follower in the mature market tries to imitate best qualities or innovations of market leaders to attract the customers. They try to include the features focusing on the customer interest and hence the marketing strategy that needs to be followed by the company in this case is a customer oriented strategy. While imitating the market leader the company needs to include the features that would be accepted by the customers and not focusing on competitors.

Niche market is characterized by the unique market techniques identifying the customer wants and needs and offer better product to the customers that competitors cannot deliver. A market niche in interior decoration of luxury homes also need to focus on customer oriented strategy because there will be no or little competitors to compete in the niche market and the product can be successful only if it addresses customer needs since the product is new to the market.

A market challenger in the mature market posses market share below that of the market leader and can gain more control through extra effort. When the market challenger has low margins and significant economies of scale effect, they need to focus on strategies that would help them to increase the margins and make use of the cost advantages to challenge the market leader. Hence the best strategy that can be adopted here would be the competitor oriented strategy and the market challenger needs to develop strategies that would help them to beat the market leader.

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