Name and describe the four fundamental offensive strategic market plans that can be used to increase a business's penetration of an existing market
What will be an ideal response?
(1 ) Grow Market Share: Many factors affect a business's ability to grow market share and profitability. Its share potential is one consideration and another is the degree to which share growth will actually contribute to profitability. One thing that needs to be determined is a firm's share development index (SDI), which is its current market share relative to its market share potential. The SDI will indicate whether or not there is sufficient opportunity to grow market share with a market penetration strategy. To grow share, a business has to examine each area of performance along the share-development path with respect to its expected versus actual market performance, examining key performance gaps. Even a firm that has reached its share potential may be able to expand its market share position with a new strategic market plan, such as with product improvements. The most important consideration in developing strategies to grow share is to make sure the planned share growth will be profitable.
(2 ) Grow Revenue per Customer: This strategy involves developing other product and/or service offerings that will result in incremental sales among current customers. The goal is to attain incremental sales of products that have higher margins, build customer loyalty, and enhance brand awareness and brand equity. A business's existing customer pool is a customer franchise that offers considerable opportunity for within-market sales growth. Revenue per customer can also be built with a strategy to build price premiums. Businesses that enhance their products by adding value-added services or building a superior reputation for quality can charge higher prices than competing businesses and still maintain a superior customer value.
(3 ) Enter New-Market Segments: This means entering a new customer segment within an existing market, such as what Intel did when it developed the Celeron chip for the under $1,000 segment of the personal computer market.
(4 ) Expand Market Demand: New customer growth strategies can focus on growing market demand by bringing new customers into the market. The market development index (MDI), which is the ratio of current market demand to maximum market demand, is useful for determining if it is possible to expand market demand because it indicates whether or not there are many potential customers who have not yet entered the market.
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The ________ develops an initial feasible solution for a transportation model by starting at the upper left-hand cell of a table and systematically allocating units to shipping points
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Which of the following differentiates oligopoly from perfect competition?
A) In an oligopoly, firms have the ability to differentiate their products from competitors, while in perfect competition, firms remain in a high rivalry where the actions of one firm affect the other B) In an oligopoly, there are relatively few companies that dominate the market; while in perfect competition, many similar firms compete in the market. C) In perfect competition, customers have few viable substitutes available; while in an oligopoly, customers have many substitutes to choose from. D) In an oligopoly, firms have the ability to promote their products differently from competitors; while in perfect competition, product differentiation helps companies compete. E) In perfect competition, companies have total control over price because they can differentiate their products; while in an oligopoly, companies have no influence on the price.