Description
This presentation is explaining the concept of marketing warfare strategies
MANAGEMENT GURU PROJECT
MARKETING WARFARE
Submitted to: Prof Isaac Jacob
Submitted by: GROUP NO. 9
Kushal Malde (126) Himani Shah Jigar Shah (146) (148)
Pooja Shethia (155) Chintan Vira (160)
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Table of Contents
OVERVIEW ........................................................................................................................................... 3 INTRODUCTION ................................................................................................................................ 4 OFFENSIVE MARKETING STRATEGIES ........................................................................................ 7 Frontal Attack ................................................................................................................................ 8 Example........................................................................................................................................ 9 Encirclement Attack .................................................................................................................. 11 Example...................................................................................................................................... 12 Flanking Attack ........................................................................................................................... 14 Example ..................................................................................................................................... 15 Guerrilla Attack........................................................................................................................... 16 Example ..................................................................................................................................... 17 Bypass Attack .............................................................................................................................. 18 Example...................................................................................................................................... 18 DEFENCIVE MARKETING STRATEGIES ..................................................................................... 21 Position defence ......................................................................................................................... 22 Example...................................................................................................................................... 22 Counter Offensive Defense .................................................................................................... 24 Example ..................................................................................................................................... 24 Mobile defence ............................................................................................................................ 25 Example...................................................................................................................................... 25 Pre-emptive Defense ................................................................................................................. 27 Example...................................................................................................................................... 27 Flanking Position Defense ...................................................................................................... 29 Example...................................................................................................................................... 29 Hedgehog Defense ..................................................................................................................... 30 Example...................................................................................................................................... 30 CONCLUSION.................................................................................................................................... 31
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OVERVIEW
When asked to big business houses whether they really take consumer as the king, a reply comes in complete affirmation. We may agree to them but the extent to which they go to prove their statement is warlike. It is not uncommon to hear terminologies relating to war, now and then and again. Business people frequently use military talks to describe their situations. There are price „wars?, „border clashes? and „skirmishes? among the major computer manufacturers. A company?s advertising is its propaganda arm. Its salesmen are its shock troops and its marketing research is its intelligence. It is not just the terminologies used but also businesses have adopted strategies from war scenarios as observed in the past. Various military strategists and theorists like Carl Von Clausewitz have been major contributors in explaining theories which were then adopted by the corporate using their products and brands as weapons.
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INTRODUCTION
Marketing warfare is an attempt to apply successful military strategy to marketing situations. Marketing, as an academic discipline, is less than 100 years old. Military strategy has been developed in life and death struggles which have been ongoing throughout the whole of recorded history - more than 3,000 years. Successful companies today are competitor oriented - meeting the customer?s demands better than any other company in their field. By adapting military strategies to their operations, companies can gain and press home strong competitive advantages over all other companies in their industry. For example compare marketing to a football game. If a team simply identifies the goal line and moves the ball towards it without regard to the competing team, they most likely will be blocked in their effort. To win the game, the team must focus its efforts on outwitting, outflanking, or over-powering the other side. This is the case in football, war, and marketing, according to Marketing Warfare. Because of the importance of the competition faced by the firm, a good marketing plan should include an extensive section on competitors. In the movies, everyone loves it when an underdog beats the favourite. In real marketing life, the company with larger marketing resources will always beat the smaller company. There are two marketing fallacies that people often fall prey to: 1. The "better people" fallacy. This suggests that your company are the good guys, the other companies are the bad guys and that the best people will prevail, even against the odds. However, the reality of any marketplace is that you should plan on winning a battle through a superior strategy, not by relying on superior performance by your people. 2. The "better product" fallacy. Otherwise known as "the better mousetrap sells itself", this fallacy suggests that the truth will come out eventually, and that if we can
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just get those facts out there, we?ll prosper. The problem is that this fallacy is based on truth as perceived in our prospect?s mind. Marketing wars, like military wars, are not won automatically by the force with truth on its side. Remember, history is always written by the winners - not the losers.
Key Thoughts: ‘‘The art of war with a numerically inferior army consists in always having larger forces than the enemy at the point which is to be attacked or defended.’’ ---- Napoleon
NATURE OF BATTLE GROUND Critical military battles traditionally have been named after their geographical location. That suggests that the terrain for any marketing battle will be of vital strategic importance. Marketing battles are fought in the mind - your mind and the mind of your prospective customers. Marketing battles are totally intellectual, making them very difficult to master. The prospect?s mind is full of mountains that are positions with good strategic value. For example, computer mountain might be owned by IBM, photocopier mountain by Xerox, etc. There?s no single way to fight every marketing war. The strategy to be used depends on the industry structure, competitors, the products involved and a whole host of other variables. Marketing Warfare is a term used to describe some of the techniques and tactics marketers use in their everyday language. First, there are two Before a one can
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types of force a business can use against its competition. The first is offensive attack and the second is defensive attack.
understand the concept of marketing warfare they must understand the terms which are associated with this type of marketing strategy. The ideas behind attack and defend are two very different ideas. Attack basically means to seek more than one has, moreover to take what someone else possesses. Defence means to protect what one has already acquired.
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OFFENSIVE MARKETING STRATEGIES
Offensive marketing warfare strategies are a type of marketing warfare strategy designed to obtain an objective, usually market share, from a target competitor. In addition to market share, an offensive strategy could be designed to obtain key customers, high margin market segments, or high loyalty market segments. 1. Frontal Attack 2. Encirclement Attack 3. Flanking Attack 4. By pass Attack 5. Guerrilla Attack
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Frontal Attack
Frontal attack is a direct head-on assault. It usually involves marshalling all your resources including a substantial financial commitment. All parts of your company must be geared up for the assault from marketing to production. It usually involves intensive advertising assaults and often entails developing a new product that is able to attack the target competitors? line where it is strong. It often involves an attempt to “liberate” a sizable portion of the target?s customer base. In actuality, frontal attacks are rare. There are two reasons for this. Firstly, they are expensive. Many valuable resources will be used and lost in the assault. Secondly, frontal attacks are often unsuccessful. If defenders are able to re-deploy their resources in time, the attacker?s strategic advantage is lost. You will be confronting strength rather than weakness. Also, there are many examples (in both business and warfare) of a dedicated defender being able to hold-off a larger attacker. The strategy is suitable when ? ? ? ? ? ? the market is relatively homogeneous brand equity is low customer loyalty is low products are poorly differentiated the target competitor has relatively limited resources the attacker has relatively strong resources
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Example
When it comes to describe the Frontal attack strategy what can be a better example than the beverage giants Coca-Cola and Pepsi Co. The two companies are very well known for their price wars. When these two companies? brands were studied in more detail price was not the only battle ground where they were competing. Other grounds were advertising, different products and different markets all together Thumbs up v/s Pepsi The consumer is seeing again the famous Coca-Cola v/s Pepsi Co war using thumps up and Pepsi as weapons. On one hand where Thumbs up is using Akshay Kumar?s macho and adventurous image to portray one would go to any limit to get a thumbs up and the quench for the same is insatiable. On the other hand Ranbir Kapoor?s mischievous chocolate boy image has been used to show that one would strategies against anyone to get ones hand on a Pepsi bottle. Besides raging price wars, both the companies also engaged in positioning war thereby competing to eat up each other?s share. Sprite v/s Mountain dew Launched as a taste competitor to Pepsi?s Mountain dew, Sprite came as a face on competitor to Mountain dew and was also successful in capturing market. Sprite also tried hampering Mountain Dew?s image by making fun of the brand on the basis of the colour.
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Sprite v/s Pepsi Using television advertisement as a powerful mode Sprite made fun of Pepsi my can?s initial advertisement featuring Ranbeer kapoor, Deepika Padukone and Sharukh Khan, using the tag line “Sidhi baat No Bakwaas Clear Hai” Other brands: When one company entered in some product category the other followed immediately. The following table gives the competing brands besides the above mentioned.
Coca-Cola Brands Fanta Sprite Minute maid Nimbu paani Diet Coke Minute maid Pulpy Orange Kinley Maaza
Pepsi Co. Brands Miranda 7- up Nimboos Diet Pepsi Miranda Aquafina Slice
Besides launching these competitive brands against each other, CocaCola had the advantage of being an old brand. Moreover by using Thumbs up and Sprite as main brands to either match pepsi in taste or attacking the positioning of various Pepsi brands it kept Pepsi busy in either defencing itself or counter attacking these brands thereby leaving a clear path for Coca-Cola classic to retain and increase its market share in Indian market.
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Encirclement Attack
Encirclement strategy is also called envelopment strategy. This is a much broader but subtle offensive strategy. It involves encircling the target competitor. This can be done in two ways. You could introduce a range of products that are similar to the target product. Each product will liberate some market share from the target competitor?s product, leaving it weakened, demoralized, and in a state of siege. If it is done stealthily, a full scale confrontation can be avoided. Alternatively, the encirclement can be based on market niches rather than products. The attacker expands the market niches that surround and encroach on the target competitor?s market. This encroachment liberates market share from the target. The envelopment strategy is suitable when: ? ? ? ? ? the market is loosely segmented some segments are relatively free of well endowed competitors the attacker has strong product development resources the attacker has enough resources to operate in multiple segments simultaneously the attacker has a decentralized organizational structure
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Example 1)
The objective is clear. Grab as much share as possible through a simultaneous attack on a couple of fronts. Add more value to your product, advertise on strategic fronts, partner with like-minded products. Example: Facebook opened up its API to developers at a time when a move like this was considered a no-no. This resulted in the creation of Apps which at the time were intriguing to users. It also rolled-out multiple features and new add-one consistently to the point that mySpace was left to watch helplessly while it struggled to catch on.
2)
Domino?s entered India in December 1996 while Pizza Hut entered India in June 1996 with its first outlet in Delhi. When Domino?s entered the Indian market, the concept of home delivery was still in its nascent stages. It existed only in some major cities and was restricted to delivery by the friendly neighbourhood fast food outlets. Eating out at „branded? restaurants was more prevalent. To penetrate the Indian market, Domino?s introduced an integrated home delivery system from a network of company outlets within 30 minutes of the order being placed.
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Domino?s also offered compensation: Rs.30/-off the price tag, if there was a delay in delivery. On the other end Pizza Hut relied on its USP of “dining experience”. For the first 4 years in India, Domino?s concentrated on its „Delivery? act. Moreover, analysts felt that Pizza was something that just was not meant to be delivered. Said Vivek Sure, Projects Manager, Pizza Express, “If you don?t eat pizza fresh, it turns cold and soggy.” However, Domino?s seemed to have overcome this problem through its delivery pack called „Domino?s Heatwave.? Since its entry into India, Domino?s introduced nine new toppings for Pizzas to cater to the local tastes. Different flavors were introduced in different parts of India. Apart from this, it also opened a 100% vegetarian restaurant. The restaurant also offered a special Jain menu. Domino?s was spending 50% of its total marketing budget on special offers and discounts along with delivered direct mailers and pizza training classes. Domino?s and Pizza Hut initially restricted their ad strategy to banners, hoardings and specific promotions. In August 2000, Domino?s launched the „Hungry Kya? (Are You Hungry)? sequence of advertisements on television. The launch of „Hungry Kya?? campaign coincided with Domino?s tie-up with Mahanagar Telephones Nigam Ltd. (MTNL) for the „Hunger Helpline?. Domino?s had the largest retail network in the fast food segment in India-with 101 outlets across 40 cities.
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Flanking Attack
Flanking is the most innovative way to wage marketing warfare. It is the best hope of achieving a huge, spectacular victory, and requires a chess player?s ability to visualize how the battle will unfold to be carried off effectively. When it?s not possible to introduce an entirely new product or service, look for a way to break the market down into segments or categories. This requires imagination, and generally baffles traditional marketers. The greater the surprise of the flanking move, the longer it will take the market leader to respond. That means avoiding the use of test-marketing or too much research, as that will alert the market leader. You should base your strategy on what the market leader is able to do, not what he is likely to do. Therefore, you?re far better off to launch a flanking move without telegraphing your moves beforehand. An ancient military axiom is to reinforce success and abandon failure. Whenever a flanking move has started well, pour every available resource into maximizing that competitive advantage. Avoid worrying about any failures - focus solely on how to get the most out of each winner. Flanking attacks generally take one of several formats: 1. Low price 2. High price or premium 3. Small size 4. Larger than life size 5. A new distribution channel 6. A new product format Flanking is a bold move not for the timid or cautious. It can be a huge payoff, or a big loss. It takes vision and foresight, because it generally goes into an area for which no market currently exists. Research is no substitute for foresight.
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Example
Cavin Kare realised the rural market potential way back in 1983 and since then has been selling a sachet of shampoo for exactly Rs. 1. Chik Shampoo hence rules the rural India, and has made CavinKare, What all it is today, and led to a revolution which we all know as the Sachet Revolution of India. CK Ranganathan, the man behind this revolution, launched Chik shampoo in 1982 and what followed was a very successful rural advertisement campaign (They even showed them how to wash hair using shampoo), and slowly the company rose to power to challenge HLL and P&G which were the market leaders at that point of time as compared to Cavin Kare. It proves to be a flanking strategy as CavinKare discovered the uncovered market needs i.e. of the rural market.
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Guerrilla Attack
The guerrilla is not trying to take business from a market leader - he is trying to take business away from all other competing uses for the money involved. Therefore, the guerrilla targets one small market segment in which he can become the leader. This requires judgment - if too big a market is targeted, it will attract the attention of the overall market leader. The key consideration is the application of resources. Guerrilla forces don?t have the money and organization to take on a broad front of business - they have to focus on one key product, one key service. The most successful guerrillas in marketing history have operated with a different organization and a different timetable from their competition. Similarly, guerrilla companies should get a high proportion of their staff into the marketing fray - the actual point of contact between the company and its customers. There should be no organizational charts, etc - just all front line and virtually no back room staff. The advantage of flexibility and a lean organization means the guerrilla company can move into another product or service at a moment?s notice without huge internal pain and stress. A guerrilla company can also make decisions quickly, without massive bureaucratic paperwork. The guerrilla company can quickly jump into a market where an opportunity exists, and just as quickly leave when a huge company with overpowering leader. Guerrillas don?t change the mathematics of the marketing battle - they simply reduce the size of the battlefield until they reach a stage where they have a superiority of firepower in just that one market alone. resources moves into the same market. Or the guerrilla can quickly move into a market being abandoned by a market
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Example
The market size of Indian retail industry is about US $312 billion Organized retailing comprises only 2.8 per cent of the total retailing market and is estimated at around US$8.7 billion. The companies are fighting for mind share and heart share which can finally be converted to market share. There is always a „first mover advantage? in an upcoming sector. In India, that advantage goes to “Big Bazaar.” It has brought about many changes in the buying habits of people. It has created formats which provide all items under one roof at low rates. Big Bazaar?s main competitors are other business houses which are planning to enter the market as well as long established „Kirana? stores which feel threatened by huge retail chains. To counter the already established kirana stores, Big Bazaar utilized the guerrilla warfare to full capacity. They came up with various strategies intermittently to capitalize the market share of most of the kirana stores and change the buying pattern of the consumer. They used the following strategies: 1) "saal ke sabse saste teen din" - Wednesday 2) Future Card (the card offers 3% discount) 3) Shakti Card 4) Brand Endorsement by M. S. Dhoni 5) Exchange Offer - „Junk Swap Offer? 6) Point-of-Purchase Promotions
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Bypass Attack
A bypass attack wins the battle through attacking areas not defended. There are basically three types of bypass strategy: develop new products, diversify into unrelated products, and expand into new geographical markets for existing products. Developing new products is a fairly easily understood bypass method. share of untapped customers. Diversifying into unrelated products is a second type of bypass strategy. Rather than remaining in a single-industry business the firm will venture out into product lines that are different from their one single product. Sony has employed this bypass strategy through entering the restaurant and construction business. One reason companies may use the bypass strategy is the large amount of congestion in the competitive battleground. For example, if a company produces a new product, the company basically moves the new product to a new level within the same product market area. Moving into digital and electronic watches may bypass the mechanical watch market; however, the company is still fighting for a position within the watch industry. Conversely, movement into an entirely new geographical market usually allows a company to bypass competitors completely. Rather than copying the leader, the competitor creates entirely new products thus gaining a larger market
Example
Kent Mineral RO: For Mineral Rich Water
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Against: Aquaguard Kent is a challenger brand in the Rs 600-700 crore Indian water purifier industry dominated by none other than Aquaguard from Eureka Forbes. Kent was launched in 1995 by Mahesh Gupta an IITian. Kent is positioned as a premium brand of water purifier targeted at SEC A&A + Most of the existing purifiers are based on Ultraviolet technology. The brand Kent is differentiated from the main competitor Aquaguard through its Reverse Osmosis (RO) technology. Identifying this gap, Kent was wise enough to own this technology and is now known as the brand which pioneered RO technology in India. In competitive strategy, the brand Kent adopted a bypass attack on the market leader Aquaguard. Here the company has leapfrogged new technologies to supplant existing products (Kotler). Although RO technology is superior to UV, the major drawback is in the price front. While UV purifiers sell at Rs 5000-7000 range, the price of RO based purifiers? starts at Rs 15000. This big differential in the pricing is expected to come down with the increase in the volume of RO purifiers. We know that having a superior technology is not a recipe for success in marketing front. The brand faced two major issues, one to establish the brand equity and second to educate the customers about the new technology. The brand then chose the easy way out in establishing the brand in the market i.e. through celebrity endorsement. Hema Malini gave the brand instant eyeballs in the sense that viewers (including mine) were intrigued with the new brand Kent. The media chosen was print and TV. Hema Malini made sense because the target audience who are Mothers could easily identify with this celebrity homemaker. More over the presence of Ahana made this a family brand. According to reports, the new brand ambassador Esha is expected to give this brand an entry into the younger generation customers. The move also makes sense with the rise of lot of young professionals managing their own homes. The brand had gained good reputation in the market which has prompted
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the market leader Eureka Forbes to come out with its own range of RO product. Kent is positioned on the specific feature whereby the mineral content of the water is sustained even after purification. Hence the brand takes the positioning platform of Mineral Rich Pure Water which also acts as a differentiator. The real impact of this brand on the market leader Aquaguard will be felt when the price of the RO purifier will match that of the popular UV purifiers. It will take a little while before that happens. Industry watchers predict that the product is moving towards the Reverse Osmosis Purifiers. When that happens Kent RO will reap the rewards of its investments.
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DEFENCIVE MARKETING STRATEGIES
Market leadership is based on who the customer perceives as the leader in that business category. Every company will try to think of itself as a leader in one way or another, but only one will occupy that distinction in the minds of the general public. When a leader attacks itself by introducing superior products on a regular basis, it may sacrifice shortterm profits but it protects market share - the key target in the long-run. The market leader occupies prime position in the mind of the consumer. If a competitor introduces a superior product which the market leader then copies, most people will assume the market leader has truth on its side in the long run. The safest move for any market leader is to cover any strategic moves initiated by its competitors, even the ones that seem oddball. It?s safer to over cover than be caught off guard and lose out on a major new market. Some of the most profitable new products in history have come as the result of an entrenched market leader matching a rival. Leaders should always have something in reserve to wheel out in response to any attack by a newcomer. The goal of all defensive warfare is to maintain marketing peace and the status quo. When a leader is well entrenched with no obvious company in second place, then the emphasis can shift to generic promotion, where enlargement of the entire market is the goal rather than beating the competition. These situations are very rare, and don?t necessarily last forever. The various defensive strategies are 1. Position Defense 2. Counter Offensive Defense 3. Mobile Defense 4. Pre-emptive Defense 5. Flank Position Defense 6. Hedgehog Defense
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Position defence
Position defence involves the defence of a fortified position. This tends to be a weak defence because you become a “sitting duck”. It can lead to a siege situation in which time is on the side of the attacker, that is, as time goes by the defender gets weaker, while the attacker gets stronger. In a business context, this involves setting up fortifications such as barriers to market entry around a product, brand, product line, market, or market segment. This could include increasing brand equity, customer satisfaction, customer loyalty, or repeat purchase rate. It could also include exclusive distribution contracts, patent protection, market monopoly, or government protected monopoly status. It is best used in homogeneous markets where the defender has dominant market position and potential attackers have very limited resources.
Example
HUL?s Clinic All Clear Antidandruff came in the market to compete with P&G?s Head and Shoulders. Both the company competing for the same segment of market and positioning itself similarly reached a new limit. With the latest television advertisement, Clinic All Clear is directly attacking Head and Shoulders where a girl using other Antidandruff
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shampoo(the name of that shampoo has been covered using a Beep) is shown having dandruff when under some scan while the girl using Clinic All Clear is shown as the girl having zero dandruff under the scan. With this advertisement HUL is trying to portray its product as best antidandruff shampoo available in the market. In reply to that Head and shoulders have not done any additional advertising or and counter attack but has continued with its normal advertising campaign. Head and Shoulders has a very strong base in the antidandruff segment hence it decided not to be counteroffensive which is doing good for the company. Also the company is concentrating on taking the antidandruff concept to more than just an antidandruff shampoo it is also concentrating on hair care like for summers it has come up with Head and Shoulder?s Menthol. A different head and shoulder shampoo for dry scalp, oily scalp, dry and frizzy hair etc.
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Counter Offensive Defense
Counter offensive defense involves countering an attack with an offense of your own. If you are attacked, retaliate with an attack on the aggressor?s weakest point. If you are being attacked with an advertising campaign, initiate your own promotional campaign aimed at the aggressor?s weak spot. If a competitor introduces a new product, retaliate with a fighting brand that is designed to nullify any advantage the new product might have had.
Example
The health drink from GSK (GlaxoSmithKline), Horlicks, has been traditionally targeted at elders and positioned as a 'great family nourisher'. However, about five years ago, the communication was changed to 'pleasurable family nourisher' with the introduction of different flavours such as chocolate, vanilla and 'elaichi'. The TV commercial had children going around the town, cheering Epang Opang Jhapang – a chant without any meaning. However, the TVC showed their mothers deciding on the choice of health drink.
Horlicks' competitor, Complan, promised to make the kids taller. Shorter kids' friends coaxed them to request their mothers to give them Complan. Now, Horlicks has gone a step further in promising not only height, but a stronger body and a sharper mind. Horlicks wants the children to decide on their health drink. The new campaign for Horlicks gives the kids a motto: 'Badlo Apne Bachpan ka Size'.
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Mobile defence
This involves constantly shifting resources and developing new strategies and tactics. A mobile defence is intended to create a moving target that is hard to successfully attack, while simultaneously, equipping the defender with a flexible response mechanism should an attack occur. In business this would entail introducing new products, introducing replacement products, modifying existing products, changing market segments, changing target markets, repositioning products, or changing promotional focus. This defence requires a very flexible organization with strong marketing, entrepreneurial, product development, and marketing research skills.
Example
Shoppers? Stop deployed various technologies for the roll-out of HyperCITY, a one-of-its-kind hypermarket. From a technology standpoint, the challenge was to deploy technologies that had never been used in India before. Further, the company wanted to have common applications across all retail formats. HyperCITY was a completely new retail format that the Shoppers? Stop group had embarked on in order to diversify and capitalise the immense retail potential for hypermarkets. The group started selecting the technologies for this venture around August 2004. The technology selection involved acquiring several pieces of software and hardware.
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This helped Shopper?s Stop to stretch its domain in this new territory and can serve as future centre for defense and counter-attack from R-city mall and many others. It will help to weather continual attack and to launch retaliatory strikes.
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Pre-emptive Defense
Pre-emptive strike is a “defensive” attack initiated because an enemy attack is believed to be imminent. The objective is to use the element of surprise to create chaos. The enemy will need time to regroup and might have second thoughts about an attack. The advantages are that you gain first-strike advantage and you get to choose the battlefield, a battlefield that you can win on. This strategy is similar to the counter-offensive strategy except that it is proactive rather than reactive. Example CAFE COFFE DAY (CCD): lot happens over coffee
Café Coffee Day is India?s largest café chain - 775 outlets across the country. With over 5 million youngsters walking in every month, Café Coffee Day is where the youth of India hang out over a cup of coffee and catch up with friends. Like Café Coffee Day promises, a lot can happen over coffee. Process: New Year wishes take a whole new meaning To understand the Café Coffee Day customer better, we spent quite a few hours over quite few days at the café. Over Free Thinking™ sessions that happened right there, we realized that there?s so much to Café Coffee Day than just coffee and snacks. It?s where the future generation of the country makes their plans for the future. It?s where youngsters share their hopes, their dreams and their fears with each other. And being a melting pot of the youth from different backgrounds and cultures, we
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realized that Café Coffee Day was just the place where you could start something new from something that could change the world, perhaps. The result was the „Wishing Cup? promo. Everybody who walked into Café Coffee Day was given a piece of paper on which they could write down their wish for the country. Then they had to drop it into the wishbox along with a couple of coffee beans. The Café would then compile all the wishes into a book, and send it to the country?s leaders and decision makers with some ground coffee beans. Urging them to read the book over a cup of coffee and do something for the good of the country.
The above case of CCD is an example of “Pre-emptive Defense Strategy”. It started this campaign for the New Year before any of the competitor i.e Barista could think of. This was done to have the first mover advantage. This may have been done to prevent any attack from Barista.
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Flanking Position Defense
Flanking Position defense involves the re-deployment of our resources to deter a flanking attack. We strengthen our flank if we think it is vulnerable. The disadvantage of this defense is that it can distract us from our primary objective and siphon resources away from where they are needed most. In business terms, this involves the introduction of new products, product lines, or brands, the defensive re-positioning of existing products, or additional promotional activity in a market niche. It requires market segmentation and/or product differentiation. You protect against potential loss of market share in a segment by strengthening your competitive position there. Example
When Calvin Kare entered the rural market with its sachet for Chic shampoos at Re. 1, this eventually led to increase in their market share. Seeing this HUL and P&G also entered the bigger niche of rural market in India and introduced Sachet of not only shampoos but also things such as oil, toothpaste, fairness cream. In order to secure their share in urban market where they already had a strong hold they introduced the sachet packaging but with different positioning of necessary things to be carried while travelling or at work very conveniently. Besides shampoo they also went for providing small packaging of soaps.
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Hedgehog Defense
Hedgehog defense is also known as Strategic withdrawal. It involves freeing your resources deployed in untenable positions. If an objective becomes strategically unimportant or tactically impossible to defend, then the best strategy can be to withdraw. The resources can be redeployed where they will be more effective. In business, this can entail dropping unprofitable products, product lines, or brands. It could also involve exiting a market or market segment. At one extreme, a radical strategic withdrawal involves closing down the business completely. At the other extreme, it involves a contraction of resources in a market segment.
Example
Milo a malted beverage launched by Nestle india was withdrawn from the market in 2009 due to poor sales. After trying Milo for $ years in the market the company received limited success due to strong competitors such as Boost, Horlicks and Complan. In order to save the company further losses the company decided to withdraw this product.
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CONCLUSION
In conclusion, marketing warfare will continue to be an integral part of the marketing world. Each principle discussed above will aid a company in ways it can become more competitive. It is important for companies to employ offensive and defensive tactics when necessary. Through monitoring competition a company will know when to use the appropriate warfare techniques to be successful in the marketing arena. It should be emphasized that warfare is only one element of firm?s marketing strategy. Furthermore, warfare should not replace or supplant the more basic marketing orientation. The identification and satisfaction of consumer needs should be the guiding philosophy and marketing warfare should be practiced in that context.
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doc_852344818.pdf
This presentation is explaining the concept of marketing warfare strategies
MANAGEMENT GURU PROJECT
MARKETING WARFARE
Submitted to: Prof Isaac Jacob
Submitted by: GROUP NO. 9
Kushal Malde (126) Himani Shah Jigar Shah (146) (148)
Pooja Shethia (155) Chintan Vira (160)
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Table of Contents
OVERVIEW ........................................................................................................................................... 3 INTRODUCTION ................................................................................................................................ 4 OFFENSIVE MARKETING STRATEGIES ........................................................................................ 7 Frontal Attack ................................................................................................................................ 8 Example........................................................................................................................................ 9 Encirclement Attack .................................................................................................................. 11 Example...................................................................................................................................... 12 Flanking Attack ........................................................................................................................... 14 Example ..................................................................................................................................... 15 Guerrilla Attack........................................................................................................................... 16 Example ..................................................................................................................................... 17 Bypass Attack .............................................................................................................................. 18 Example...................................................................................................................................... 18 DEFENCIVE MARKETING STRATEGIES ..................................................................................... 21 Position defence ......................................................................................................................... 22 Example...................................................................................................................................... 22 Counter Offensive Defense .................................................................................................... 24 Example ..................................................................................................................................... 24 Mobile defence ............................................................................................................................ 25 Example...................................................................................................................................... 25 Pre-emptive Defense ................................................................................................................. 27 Example...................................................................................................................................... 27 Flanking Position Defense ...................................................................................................... 29 Example...................................................................................................................................... 29 Hedgehog Defense ..................................................................................................................... 30 Example...................................................................................................................................... 30 CONCLUSION.................................................................................................................................... 31
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OVERVIEW
When asked to big business houses whether they really take consumer as the king, a reply comes in complete affirmation. We may agree to them but the extent to which they go to prove their statement is warlike. It is not uncommon to hear terminologies relating to war, now and then and again. Business people frequently use military talks to describe their situations. There are price „wars?, „border clashes? and „skirmishes? among the major computer manufacturers. A company?s advertising is its propaganda arm. Its salesmen are its shock troops and its marketing research is its intelligence. It is not just the terminologies used but also businesses have adopted strategies from war scenarios as observed in the past. Various military strategists and theorists like Carl Von Clausewitz have been major contributors in explaining theories which were then adopted by the corporate using their products and brands as weapons.
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INTRODUCTION
Marketing warfare is an attempt to apply successful military strategy to marketing situations. Marketing, as an academic discipline, is less than 100 years old. Military strategy has been developed in life and death struggles which have been ongoing throughout the whole of recorded history - more than 3,000 years. Successful companies today are competitor oriented - meeting the customer?s demands better than any other company in their field. By adapting military strategies to their operations, companies can gain and press home strong competitive advantages over all other companies in their industry. For example compare marketing to a football game. If a team simply identifies the goal line and moves the ball towards it without regard to the competing team, they most likely will be blocked in their effort. To win the game, the team must focus its efforts on outwitting, outflanking, or over-powering the other side. This is the case in football, war, and marketing, according to Marketing Warfare. Because of the importance of the competition faced by the firm, a good marketing plan should include an extensive section on competitors. In the movies, everyone loves it when an underdog beats the favourite. In real marketing life, the company with larger marketing resources will always beat the smaller company. There are two marketing fallacies that people often fall prey to: 1. The "better people" fallacy. This suggests that your company are the good guys, the other companies are the bad guys and that the best people will prevail, even against the odds. However, the reality of any marketplace is that you should plan on winning a battle through a superior strategy, not by relying on superior performance by your people. 2. The "better product" fallacy. Otherwise known as "the better mousetrap sells itself", this fallacy suggests that the truth will come out eventually, and that if we can
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just get those facts out there, we?ll prosper. The problem is that this fallacy is based on truth as perceived in our prospect?s mind. Marketing wars, like military wars, are not won automatically by the force with truth on its side. Remember, history is always written by the winners - not the losers.
Key Thoughts: ‘‘The art of war with a numerically inferior army consists in always having larger forces than the enemy at the point which is to be attacked or defended.’’ ---- Napoleon
NATURE OF BATTLE GROUND Critical military battles traditionally have been named after their geographical location. That suggests that the terrain for any marketing battle will be of vital strategic importance. Marketing battles are fought in the mind - your mind and the mind of your prospective customers. Marketing battles are totally intellectual, making them very difficult to master. The prospect?s mind is full of mountains that are positions with good strategic value. For example, computer mountain might be owned by IBM, photocopier mountain by Xerox, etc. There?s no single way to fight every marketing war. The strategy to be used depends on the industry structure, competitors, the products involved and a whole host of other variables. Marketing Warfare is a term used to describe some of the techniques and tactics marketers use in their everyday language. First, there are two Before a one can
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types of force a business can use against its competition. The first is offensive attack and the second is defensive attack.
understand the concept of marketing warfare they must understand the terms which are associated with this type of marketing strategy. The ideas behind attack and defend are two very different ideas. Attack basically means to seek more than one has, moreover to take what someone else possesses. Defence means to protect what one has already acquired.
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OFFENSIVE MARKETING STRATEGIES
Offensive marketing warfare strategies are a type of marketing warfare strategy designed to obtain an objective, usually market share, from a target competitor. In addition to market share, an offensive strategy could be designed to obtain key customers, high margin market segments, or high loyalty market segments. 1. Frontal Attack 2. Encirclement Attack 3. Flanking Attack 4. By pass Attack 5. Guerrilla Attack
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Frontal Attack
Frontal attack is a direct head-on assault. It usually involves marshalling all your resources including a substantial financial commitment. All parts of your company must be geared up for the assault from marketing to production. It usually involves intensive advertising assaults and often entails developing a new product that is able to attack the target competitors? line where it is strong. It often involves an attempt to “liberate” a sizable portion of the target?s customer base. In actuality, frontal attacks are rare. There are two reasons for this. Firstly, they are expensive. Many valuable resources will be used and lost in the assault. Secondly, frontal attacks are often unsuccessful. If defenders are able to re-deploy their resources in time, the attacker?s strategic advantage is lost. You will be confronting strength rather than weakness. Also, there are many examples (in both business and warfare) of a dedicated defender being able to hold-off a larger attacker. The strategy is suitable when ? ? ? ? ? ? the market is relatively homogeneous brand equity is low customer loyalty is low products are poorly differentiated the target competitor has relatively limited resources the attacker has relatively strong resources
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Example
When it comes to describe the Frontal attack strategy what can be a better example than the beverage giants Coca-Cola and Pepsi Co. The two companies are very well known for their price wars. When these two companies? brands were studied in more detail price was not the only battle ground where they were competing. Other grounds were advertising, different products and different markets all together Thumbs up v/s Pepsi The consumer is seeing again the famous Coca-Cola v/s Pepsi Co war using thumps up and Pepsi as weapons. On one hand where Thumbs up is using Akshay Kumar?s macho and adventurous image to portray one would go to any limit to get a thumbs up and the quench for the same is insatiable. On the other hand Ranbir Kapoor?s mischievous chocolate boy image has been used to show that one would strategies against anyone to get ones hand on a Pepsi bottle. Besides raging price wars, both the companies also engaged in positioning war thereby competing to eat up each other?s share. Sprite v/s Mountain dew Launched as a taste competitor to Pepsi?s Mountain dew, Sprite came as a face on competitor to Mountain dew and was also successful in capturing market. Sprite also tried hampering Mountain Dew?s image by making fun of the brand on the basis of the colour.
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Sprite v/s Pepsi Using television advertisement as a powerful mode Sprite made fun of Pepsi my can?s initial advertisement featuring Ranbeer kapoor, Deepika Padukone and Sharukh Khan, using the tag line “Sidhi baat No Bakwaas Clear Hai” Other brands: When one company entered in some product category the other followed immediately. The following table gives the competing brands besides the above mentioned.
Coca-Cola Brands Fanta Sprite Minute maid Nimbu paani Diet Coke Minute maid Pulpy Orange Kinley Maaza
Pepsi Co. Brands Miranda 7- up Nimboos Diet Pepsi Miranda Aquafina Slice
Besides launching these competitive brands against each other, CocaCola had the advantage of being an old brand. Moreover by using Thumbs up and Sprite as main brands to either match pepsi in taste or attacking the positioning of various Pepsi brands it kept Pepsi busy in either defencing itself or counter attacking these brands thereby leaving a clear path for Coca-Cola classic to retain and increase its market share in Indian market.
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Encirclement Attack
Encirclement strategy is also called envelopment strategy. This is a much broader but subtle offensive strategy. It involves encircling the target competitor. This can be done in two ways. You could introduce a range of products that are similar to the target product. Each product will liberate some market share from the target competitor?s product, leaving it weakened, demoralized, and in a state of siege. If it is done stealthily, a full scale confrontation can be avoided. Alternatively, the encirclement can be based on market niches rather than products. The attacker expands the market niches that surround and encroach on the target competitor?s market. This encroachment liberates market share from the target. The envelopment strategy is suitable when: ? ? ? ? ? the market is loosely segmented some segments are relatively free of well endowed competitors the attacker has strong product development resources the attacker has enough resources to operate in multiple segments simultaneously the attacker has a decentralized organizational structure
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Example 1)
The objective is clear. Grab as much share as possible through a simultaneous attack on a couple of fronts. Add more value to your product, advertise on strategic fronts, partner with like-minded products. Example: Facebook opened up its API to developers at a time when a move like this was considered a no-no. This resulted in the creation of Apps which at the time were intriguing to users. It also rolled-out multiple features and new add-one consistently to the point that mySpace was left to watch helplessly while it struggled to catch on.
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Domino?s entered India in December 1996 while Pizza Hut entered India in June 1996 with its first outlet in Delhi. When Domino?s entered the Indian market, the concept of home delivery was still in its nascent stages. It existed only in some major cities and was restricted to delivery by the friendly neighbourhood fast food outlets. Eating out at „branded? restaurants was more prevalent. To penetrate the Indian market, Domino?s introduced an integrated home delivery system from a network of company outlets within 30 minutes of the order being placed.
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Domino?s also offered compensation: Rs.30/-off the price tag, if there was a delay in delivery. On the other end Pizza Hut relied on its USP of “dining experience”. For the first 4 years in India, Domino?s concentrated on its „Delivery? act. Moreover, analysts felt that Pizza was something that just was not meant to be delivered. Said Vivek Sure, Projects Manager, Pizza Express, “If you don?t eat pizza fresh, it turns cold and soggy.” However, Domino?s seemed to have overcome this problem through its delivery pack called „Domino?s Heatwave.? Since its entry into India, Domino?s introduced nine new toppings for Pizzas to cater to the local tastes. Different flavors were introduced in different parts of India. Apart from this, it also opened a 100% vegetarian restaurant. The restaurant also offered a special Jain menu. Domino?s was spending 50% of its total marketing budget on special offers and discounts along with delivered direct mailers and pizza training classes. Domino?s and Pizza Hut initially restricted their ad strategy to banners, hoardings and specific promotions. In August 2000, Domino?s launched the „Hungry Kya? (Are You Hungry)? sequence of advertisements on television. The launch of „Hungry Kya?? campaign coincided with Domino?s tie-up with Mahanagar Telephones Nigam Ltd. (MTNL) for the „Hunger Helpline?. Domino?s had the largest retail network in the fast food segment in India-with 101 outlets across 40 cities.
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Flanking Attack
Flanking is the most innovative way to wage marketing warfare. It is the best hope of achieving a huge, spectacular victory, and requires a chess player?s ability to visualize how the battle will unfold to be carried off effectively. When it?s not possible to introduce an entirely new product or service, look for a way to break the market down into segments or categories. This requires imagination, and generally baffles traditional marketers. The greater the surprise of the flanking move, the longer it will take the market leader to respond. That means avoiding the use of test-marketing or too much research, as that will alert the market leader. You should base your strategy on what the market leader is able to do, not what he is likely to do. Therefore, you?re far better off to launch a flanking move without telegraphing your moves beforehand. An ancient military axiom is to reinforce success and abandon failure. Whenever a flanking move has started well, pour every available resource into maximizing that competitive advantage. Avoid worrying about any failures - focus solely on how to get the most out of each winner. Flanking attacks generally take one of several formats: 1. Low price 2. High price or premium 3. Small size 4. Larger than life size 5. A new distribution channel 6. A new product format Flanking is a bold move not for the timid or cautious. It can be a huge payoff, or a big loss. It takes vision and foresight, because it generally goes into an area for which no market currently exists. Research is no substitute for foresight.
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Example
Cavin Kare realised the rural market potential way back in 1983 and since then has been selling a sachet of shampoo for exactly Rs. 1. Chik Shampoo hence rules the rural India, and has made CavinKare, What all it is today, and led to a revolution which we all know as the Sachet Revolution of India. CK Ranganathan, the man behind this revolution, launched Chik shampoo in 1982 and what followed was a very successful rural advertisement campaign (They even showed them how to wash hair using shampoo), and slowly the company rose to power to challenge HLL and P&G which were the market leaders at that point of time as compared to Cavin Kare. It proves to be a flanking strategy as CavinKare discovered the uncovered market needs i.e. of the rural market.
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Guerrilla Attack
The guerrilla is not trying to take business from a market leader - he is trying to take business away from all other competing uses for the money involved. Therefore, the guerrilla targets one small market segment in which he can become the leader. This requires judgment - if too big a market is targeted, it will attract the attention of the overall market leader. The key consideration is the application of resources. Guerrilla forces don?t have the money and organization to take on a broad front of business - they have to focus on one key product, one key service. The most successful guerrillas in marketing history have operated with a different organization and a different timetable from their competition. Similarly, guerrilla companies should get a high proportion of their staff into the marketing fray - the actual point of contact between the company and its customers. There should be no organizational charts, etc - just all front line and virtually no back room staff. The advantage of flexibility and a lean organization means the guerrilla company can move into another product or service at a moment?s notice without huge internal pain and stress. A guerrilla company can also make decisions quickly, without massive bureaucratic paperwork. The guerrilla company can quickly jump into a market where an opportunity exists, and just as quickly leave when a huge company with overpowering leader. Guerrillas don?t change the mathematics of the marketing battle - they simply reduce the size of the battlefield until they reach a stage where they have a superiority of firepower in just that one market alone. resources moves into the same market. Or the guerrilla can quickly move into a market being abandoned by a market
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Example
The market size of Indian retail industry is about US $312 billion Organized retailing comprises only 2.8 per cent of the total retailing market and is estimated at around US$8.7 billion. The companies are fighting for mind share and heart share which can finally be converted to market share. There is always a „first mover advantage? in an upcoming sector. In India, that advantage goes to “Big Bazaar.” It has brought about many changes in the buying habits of people. It has created formats which provide all items under one roof at low rates. Big Bazaar?s main competitors are other business houses which are planning to enter the market as well as long established „Kirana? stores which feel threatened by huge retail chains. To counter the already established kirana stores, Big Bazaar utilized the guerrilla warfare to full capacity. They came up with various strategies intermittently to capitalize the market share of most of the kirana stores and change the buying pattern of the consumer. They used the following strategies: 1) "saal ke sabse saste teen din" - Wednesday 2) Future Card (the card offers 3% discount) 3) Shakti Card 4) Brand Endorsement by M. S. Dhoni 5) Exchange Offer - „Junk Swap Offer? 6) Point-of-Purchase Promotions
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Bypass Attack
A bypass attack wins the battle through attacking areas not defended. There are basically three types of bypass strategy: develop new products, diversify into unrelated products, and expand into new geographical markets for existing products. Developing new products is a fairly easily understood bypass method. share of untapped customers. Diversifying into unrelated products is a second type of bypass strategy. Rather than remaining in a single-industry business the firm will venture out into product lines that are different from their one single product. Sony has employed this bypass strategy through entering the restaurant and construction business. One reason companies may use the bypass strategy is the large amount of congestion in the competitive battleground. For example, if a company produces a new product, the company basically moves the new product to a new level within the same product market area. Moving into digital and electronic watches may bypass the mechanical watch market; however, the company is still fighting for a position within the watch industry. Conversely, movement into an entirely new geographical market usually allows a company to bypass competitors completely. Rather than copying the leader, the competitor creates entirely new products thus gaining a larger market
Example
Kent Mineral RO: For Mineral Rich Water
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Against: Aquaguard Kent is a challenger brand in the Rs 600-700 crore Indian water purifier industry dominated by none other than Aquaguard from Eureka Forbes. Kent was launched in 1995 by Mahesh Gupta an IITian. Kent is positioned as a premium brand of water purifier targeted at SEC A&A + Most of the existing purifiers are based on Ultraviolet technology. The brand Kent is differentiated from the main competitor Aquaguard through its Reverse Osmosis (RO) technology. Identifying this gap, Kent was wise enough to own this technology and is now known as the brand which pioneered RO technology in India. In competitive strategy, the brand Kent adopted a bypass attack on the market leader Aquaguard. Here the company has leapfrogged new technologies to supplant existing products (Kotler). Although RO technology is superior to UV, the major drawback is in the price front. While UV purifiers sell at Rs 5000-7000 range, the price of RO based purifiers? starts at Rs 15000. This big differential in the pricing is expected to come down with the increase in the volume of RO purifiers. We know that having a superior technology is not a recipe for success in marketing front. The brand faced two major issues, one to establish the brand equity and second to educate the customers about the new technology. The brand then chose the easy way out in establishing the brand in the market i.e. through celebrity endorsement. Hema Malini gave the brand instant eyeballs in the sense that viewers (including mine) were intrigued with the new brand Kent. The media chosen was print and TV. Hema Malini made sense because the target audience who are Mothers could easily identify with this celebrity homemaker. More over the presence of Ahana made this a family brand. According to reports, the new brand ambassador Esha is expected to give this brand an entry into the younger generation customers. The move also makes sense with the rise of lot of young professionals managing their own homes. The brand had gained good reputation in the market which has prompted
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the market leader Eureka Forbes to come out with its own range of RO product. Kent is positioned on the specific feature whereby the mineral content of the water is sustained even after purification. Hence the brand takes the positioning platform of Mineral Rich Pure Water which also acts as a differentiator. The real impact of this brand on the market leader Aquaguard will be felt when the price of the RO purifier will match that of the popular UV purifiers. It will take a little while before that happens. Industry watchers predict that the product is moving towards the Reverse Osmosis Purifiers. When that happens Kent RO will reap the rewards of its investments.
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DEFENCIVE MARKETING STRATEGIES
Market leadership is based on who the customer perceives as the leader in that business category. Every company will try to think of itself as a leader in one way or another, but only one will occupy that distinction in the minds of the general public. When a leader attacks itself by introducing superior products on a regular basis, it may sacrifice shortterm profits but it protects market share - the key target in the long-run. The market leader occupies prime position in the mind of the consumer. If a competitor introduces a superior product which the market leader then copies, most people will assume the market leader has truth on its side in the long run. The safest move for any market leader is to cover any strategic moves initiated by its competitors, even the ones that seem oddball. It?s safer to over cover than be caught off guard and lose out on a major new market. Some of the most profitable new products in history have come as the result of an entrenched market leader matching a rival. Leaders should always have something in reserve to wheel out in response to any attack by a newcomer. The goal of all defensive warfare is to maintain marketing peace and the status quo. When a leader is well entrenched with no obvious company in second place, then the emphasis can shift to generic promotion, where enlargement of the entire market is the goal rather than beating the competition. These situations are very rare, and don?t necessarily last forever. The various defensive strategies are 1. Position Defense 2. Counter Offensive Defense 3. Mobile Defense 4. Pre-emptive Defense 5. Flank Position Defense 6. Hedgehog Defense
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Position defence
Position defence involves the defence of a fortified position. This tends to be a weak defence because you become a “sitting duck”. It can lead to a siege situation in which time is on the side of the attacker, that is, as time goes by the defender gets weaker, while the attacker gets stronger. In a business context, this involves setting up fortifications such as barriers to market entry around a product, brand, product line, market, or market segment. This could include increasing brand equity, customer satisfaction, customer loyalty, or repeat purchase rate. It could also include exclusive distribution contracts, patent protection, market monopoly, or government protected monopoly status. It is best used in homogeneous markets where the defender has dominant market position and potential attackers have very limited resources.
Example
HUL?s Clinic All Clear Antidandruff came in the market to compete with P&G?s Head and Shoulders. Both the company competing for the same segment of market and positioning itself similarly reached a new limit. With the latest television advertisement, Clinic All Clear is directly attacking Head and Shoulders where a girl using other Antidandruff
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shampoo(the name of that shampoo has been covered using a Beep) is shown having dandruff when under some scan while the girl using Clinic All Clear is shown as the girl having zero dandruff under the scan. With this advertisement HUL is trying to portray its product as best antidandruff shampoo available in the market. In reply to that Head and shoulders have not done any additional advertising or and counter attack but has continued with its normal advertising campaign. Head and Shoulders has a very strong base in the antidandruff segment hence it decided not to be counteroffensive which is doing good for the company. Also the company is concentrating on taking the antidandruff concept to more than just an antidandruff shampoo it is also concentrating on hair care like for summers it has come up with Head and Shoulder?s Menthol. A different head and shoulder shampoo for dry scalp, oily scalp, dry and frizzy hair etc.
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Counter Offensive Defense
Counter offensive defense involves countering an attack with an offense of your own. If you are attacked, retaliate with an attack on the aggressor?s weakest point. If you are being attacked with an advertising campaign, initiate your own promotional campaign aimed at the aggressor?s weak spot. If a competitor introduces a new product, retaliate with a fighting brand that is designed to nullify any advantage the new product might have had.
Example
The health drink from GSK (GlaxoSmithKline), Horlicks, has been traditionally targeted at elders and positioned as a 'great family nourisher'. However, about five years ago, the communication was changed to 'pleasurable family nourisher' with the introduction of different flavours such as chocolate, vanilla and 'elaichi'. The TV commercial had children going around the town, cheering Epang Opang Jhapang – a chant without any meaning. However, the TVC showed their mothers deciding on the choice of health drink.
Horlicks' competitor, Complan, promised to make the kids taller. Shorter kids' friends coaxed them to request their mothers to give them Complan. Now, Horlicks has gone a step further in promising not only height, but a stronger body and a sharper mind. Horlicks wants the children to decide on their health drink. The new campaign for Horlicks gives the kids a motto: 'Badlo Apne Bachpan ka Size'.
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Mobile defence
This involves constantly shifting resources and developing new strategies and tactics. A mobile defence is intended to create a moving target that is hard to successfully attack, while simultaneously, equipping the defender with a flexible response mechanism should an attack occur. In business this would entail introducing new products, introducing replacement products, modifying existing products, changing market segments, changing target markets, repositioning products, or changing promotional focus. This defence requires a very flexible organization with strong marketing, entrepreneurial, product development, and marketing research skills.
Example
Shoppers? Stop deployed various technologies for the roll-out of HyperCITY, a one-of-its-kind hypermarket. From a technology standpoint, the challenge was to deploy technologies that had never been used in India before. Further, the company wanted to have common applications across all retail formats. HyperCITY was a completely new retail format that the Shoppers? Stop group had embarked on in order to diversify and capitalise the immense retail potential for hypermarkets. The group started selecting the technologies for this venture around August 2004. The technology selection involved acquiring several pieces of software and hardware.
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This helped Shopper?s Stop to stretch its domain in this new territory and can serve as future centre for defense and counter-attack from R-city mall and many others. It will help to weather continual attack and to launch retaliatory strikes.
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Pre-emptive Defense
Pre-emptive strike is a “defensive” attack initiated because an enemy attack is believed to be imminent. The objective is to use the element of surprise to create chaos. The enemy will need time to regroup and might have second thoughts about an attack. The advantages are that you gain first-strike advantage and you get to choose the battlefield, a battlefield that you can win on. This strategy is similar to the counter-offensive strategy except that it is proactive rather than reactive. Example CAFE COFFE DAY (CCD): lot happens over coffee
Café Coffee Day is India?s largest café chain - 775 outlets across the country. With over 5 million youngsters walking in every month, Café Coffee Day is where the youth of India hang out over a cup of coffee and catch up with friends. Like Café Coffee Day promises, a lot can happen over coffee. Process: New Year wishes take a whole new meaning To understand the Café Coffee Day customer better, we spent quite a few hours over quite few days at the café. Over Free Thinking™ sessions that happened right there, we realized that there?s so much to Café Coffee Day than just coffee and snacks. It?s where the future generation of the country makes their plans for the future. It?s where youngsters share their hopes, their dreams and their fears with each other. And being a melting pot of the youth from different backgrounds and cultures, we
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realized that Café Coffee Day was just the place where you could start something new from something that could change the world, perhaps. The result was the „Wishing Cup? promo. Everybody who walked into Café Coffee Day was given a piece of paper on which they could write down their wish for the country. Then they had to drop it into the wishbox along with a couple of coffee beans. The Café would then compile all the wishes into a book, and send it to the country?s leaders and decision makers with some ground coffee beans. Urging them to read the book over a cup of coffee and do something for the good of the country.
The above case of CCD is an example of “Pre-emptive Defense Strategy”. It started this campaign for the New Year before any of the competitor i.e Barista could think of. This was done to have the first mover advantage. This may have been done to prevent any attack from Barista.
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Flanking Position Defense
Flanking Position defense involves the re-deployment of our resources to deter a flanking attack. We strengthen our flank if we think it is vulnerable. The disadvantage of this defense is that it can distract us from our primary objective and siphon resources away from where they are needed most. In business terms, this involves the introduction of new products, product lines, or brands, the defensive re-positioning of existing products, or additional promotional activity in a market niche. It requires market segmentation and/or product differentiation. You protect against potential loss of market share in a segment by strengthening your competitive position there. Example
When Calvin Kare entered the rural market with its sachet for Chic shampoos at Re. 1, this eventually led to increase in their market share. Seeing this HUL and P&G also entered the bigger niche of rural market in India and introduced Sachet of not only shampoos but also things such as oil, toothpaste, fairness cream. In order to secure their share in urban market where they already had a strong hold they introduced the sachet packaging but with different positioning of necessary things to be carried while travelling or at work very conveniently. Besides shampoo they also went for providing small packaging of soaps.
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Hedgehog Defense
Hedgehog defense is also known as Strategic withdrawal. It involves freeing your resources deployed in untenable positions. If an objective becomes strategically unimportant or tactically impossible to defend, then the best strategy can be to withdraw. The resources can be redeployed where they will be more effective. In business, this can entail dropping unprofitable products, product lines, or brands. It could also involve exiting a market or market segment. At one extreme, a radical strategic withdrawal involves closing down the business completely. At the other extreme, it involves a contraction of resources in a market segment.
Example
Milo a malted beverage launched by Nestle india was withdrawn from the market in 2009 due to poor sales. After trying Milo for $ years in the market the company received limited success due to strong competitors such as Boost, Horlicks and Complan. In order to save the company further losses the company decided to withdraw this product.
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CONCLUSION
In conclusion, marketing warfare will continue to be an integral part of the marketing world. Each principle discussed above will aid a company in ways it can become more competitive. It is important for companies to employ offensive and defensive tactics when necessary. Through monitoring competition a company will know when to use the appropriate warfare techniques to be successful in the marketing arena. It should be emphasized that warfare is only one element of firm?s marketing strategy. Furthermore, warfare should not replace or supplant the more basic marketing orientation. The identification and satisfaction of consumer needs should be the guiding philosophy and marketing warfare should be practiced in that context.
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