Every industry has a leader. The leader always has the most extensive customer base, have more sales and revenue. Thus, the leader can still spend more money on their marketing effort.
Regardless of the fact, their position as a market leader can always be under threat. Staying on the top for an extended period is not an easy task. Because other companies constantly challenge the leader by offering unique products or low prices.
So, in the situation, what would be the most appropriate response of the market leader?
- What is Defensive Marketing?
- Who uses defensive marketing?
- Who is this for?
- How is a defensive marketing strategy develops?
- Importance of defensive marketing.
- Types of defensive marketing.
- When to use defensive marketing?
- Pros and cons?
WHAT IS DEFENSIVE MARKETING?
Defensive marketing is a type of marketing that a market leader uses to maintain its position as the market leader. Leaders use this marketing to protect its market share, product popularity and positioning, sales, and revenue.
Defensive marketing is a useful marketing tool because it helps retain customers that can be taken away by another firm that offers a similar product to the same audience.
WHO USES DEFENSIVE MARKETING?
Big corporations generally market leaders regardless of the industry, employ defensive marketing whenever a new company comes out with an offer that can threaten their position as market leaders.
Today most countries have a free-market economy. In a free economy, anyone can enter any business with a promising idea and product. If a new company offers a better product at an affordable price, then the new player can quickly become the new leader of the industry.
That is why old and long-established companies position as the market leader can easily be changed.
So, dominant companies always work hard to maintain their position as the market leader by defensive marketing.
However, anyone can employ defensive marketing to save guard their market share. Because of today’s startup ecosystem, not only leaders but everyone’s market share is at risk.
Who is this for?
Leaders of any industry use defensive marketing just to maintain their existing customer base.
Thus, a defensive strategy is most useful for the existing customer of a company.
According to the Pareto Principle ( 80/20 principle), 80 percent of all companies’ revenue comes from 20 percent of its customer. These 20 percent customer is a loyal customer of the company.
Large corporations do their defensive marketing to retain their loyal customers.
Leaders employ different types of marketing depending upon the competitor’s attack.
If competitors offer lower prices, then the strategy of defensive marketing should be cost-sensitive.
A repositioning defensive marketing strategy will work best if competitors offer specific features.
HOW IS A DEFENSIVE MARKETING STRATEGY DEVELOPS?
Before implementing a defensive marketing strategy, you must figure out your best form of defense. You should ask yourself what to fight with?
i) What is your status? How do customers perceive you? What is your brand identity?
ii) What is your channel of communication?
iii) What options you have? Which strategy can you implement? The effectiveness of your policy.
iv) Do a SWOT analysis (Strength, Weakness, opportunity, and threat) of your competitors’ product.
Being armed with this information, implement the most appropriate defensive marketing strategy to retain your position as the market leader. Below is some most effective defensive strategy.
Let’s check out what is it’s importance
IMPORTANCE OF DEFENSIVE MARKETING
No need to talk about how crucial defensive marketing is. Below are some points; by reading them, you will have an idea of how important this marketing is.
1. This marketing is required when a company has a significant market share in an industry, and various competitors constantly challenge the leaders.
Because of today’s uncertain business environment, leaders cannot ignore their competitors no matter how small.
Not only leaders, but every player’s market share is at risk by any new player entering the industry. That is why a defensive marketing campaign is so important.
2. There is a proverb “Change is the only constant.” So, customer expectations are also changing at a rapid pace. That is why this marketing is essential for companies because they want to remain relevant by fulfilling their customer’s needs.
Let’s see some types of it
TYPES OF DEFENSIVE MARKETING
Defensive strategies can be divided into two groups by their aims. They are-
1. Positive strategy:
This is a type of defensive strategy which is morally correct. As the name suggests, a definite plan aims to retain the existing customer.
2. Inertial strategy:
This type of defensive strategy design to slow down the migration rate of customers to the competitors. In simple terms, it aims to slow down the rate of customer loss.
This marketing strategy can also be categorized by the means to achieve their goals:
1. Retarding strategy:
It is a type of defensive strategy in which you focused mainly on your strength.
In parity strategy, you analyze, evaluate, and focus on your competitor’s advantage.
1. Adjust your product Pricing:
You can do a lot with the pricing of your product. You can—
Decrease the piece to make it more affordable.
Increase the price of your product to frame it as a premium brand.
Increase the value delivered while keeping the price constant.
Sometimes, you can block your competitors’ distribution channels as a defense mechanism to protect your market share. Coca-Cola often uses this technique by providing its competitor’s distributor some incentive, and they refuse to carry on.
3. Product improvement:
You should regularly evaluate your product to figure out any scope of improvement. It is a type of defense mechanism. As customers taste always evolves, you have to make changes in your product.
4.Advertise your strengths:
Market leaders always have extra money to spend on their marketing campaigns. So, they should advertise their power.
5. Attack yourself:
You might think that I am joking. But challenging your existing product by developing a new product is a type of defensive marketing.
By attacking your existing product with a new product, you challenge your current product and force it to become outdated.
Thus, the next version of the product will be more relevant, and in this way, you can maintain your market share. e.g., Google always challenges its existing product with a new product to figure any scope of modification.
6.Awake your sleeping market:
Sometimes brands are happy with their existing customer base. There may be some mistakes in their market research or whatever the cause, sometimes companies do not realize the size of their potential customer base.
So, as a defense mechanism, you should always try to get new customers.
WHEN TO USE DEFENSIVE MARKETING?
Right timing is crucial in any type of marketing campaign.
You can launch your defensive marketing campaign whenever a new competitor enters your areas of business.
If the competitor is rapidly growing popular by eating your market share, you should launch this marketing campaign to slow down your customer’s loss.
In today’s uncertain business environment, you must not wait for a competitor to enter your industry to launch this marketing campaign.
If you want to maintain your position as the market leader, you must have to ahead of time and competition.
You should launch your this marketing campaign as early as possible.
PROS AND CONS
Like all marketing tools, defensive marketing has both pros and cons. They are as follows-
The main advantage of defensive marketing that allows the company to improve the product, increase customer loyalty, maintain its market share, and may more.
The main drawback of defensive marketing is if there is the slightest mistake of market research, companies cannot understand the market properly. In that scenario, they cannot be able to fulfill customers’ expectations. If that happens then, the leaders can quickly lose their place as leaders.
DIFFERENCE BETWEEN DEFENSIVE AND OFFENSIVE MARKETING
|Offensive Marketing||Defensive Marketing|
|1. New players use offensive marketing strategies to attack leaders and established players the most hardly.||1. Leaders use defensive marketing strategies to maintain their position as market leaders.|
|2. New players use offensive marketing to gain customers and market share.||2. Leaders use defensive marketing to protect their market share from new players in the competitive business environment.|
|3. It is used to create a competitive advantage.||4. It is used to protect competitive advantage.|
Finally, it can be said that defensive marketing is a type of marketing to protect existing market share.
Big companies generally, market leaders use this marketing to protect their throne as the market leader. Government policies, significant technological discoveries, economic recession, or a pandemic can create uncertain situations in the economics of the world.
Thats is why remaining at the top of an industry is getting increasingly harder for leaders of the industry. Not only leaders, but every companies market can also be captured by a new player. Thus the importance of this marketing is increased every day.
Anytime when a market leader feels threatened by another competitor and wants to protect his market share.
This marketing is one of the best protective strategy market leaders use to maintain their position as market leaders.
The objective of this marketing is to retain the existing customer base, protect the market share, lowering the speed of customer loss.
Before implementing a defensive marketing strategy, you must figure out your best form of defense. You should ask yourself what to fight with.
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