COMPETITIVE MARKETING STRATEGY

INTRODUCTION

Building strong brands requires a keen understanding of competitors, and competition grows more intense every year. New competition is coming from all directions – from global competitors seeking cost-efficient ways to expand distribution; from private-label and store brands designed to provide low-price alternatives; and from brand extensions from strong megabrands leveraging their strengths to move into new categories. One good way to start to deal with competition is through creatively designed and well executed marketing programs.

To effectively device and implement the best possible brand-positioning strategies, companies must pay keen attention to their competitors. Markets have become too competitive to focus on the consumer alone.

COMPETITIVE FORCES
Michael Porter has identified five forces that determine the intrinsic long-run attractiveness of a market or market segment: Industry competitors, potential entrants, substitutes, buyers, and suppliers. The threats these forces pose are as follows:

1. Threat of intense segment rivalry- A segment is unattractive if it already contains numerous, strong, or aggressive competitors. It's even more unattractive if it's stable or declining, if plant capacity must be added in large increments, if fixed costs or exit barriers are high, or if competitors have high stakes in staying in the segment. These conditions will lead to frequent price wars, advertising battles, and new-product introductions and will make it expensive to compete.

2. Threat of new entrants -The most attractive segment is one in which entry barriers are high and exit barriers are low." Few new firms can enter the industry, and poorly performing firms can easily exit. When both entry and exit barriers are high, profit potential is high, but firms face more risk because poorer-performing firms