MKT624 GDB Spring 2020 Solution

MKT624 GDB Spring 2020 Solution

MKT624 GDB Solution

Customers while shopping observe brands as the most crucial element. A strong brand relationship is developed in consumers’ minds by the values or attributes they perceive. Now-a-days customers have become more distinctive with respect to their personality. ITTEHAD (a renowned clothing brand of Pakistan) was more focused upon generating revenues instead of giving extra values to consumers. With the passage of time and arrival of new clothing brands in the market, ITTEHAD observed a decrease in customer loyalty and a reduction in market value. Indeed, it was a challenging and thought provoking situation for ITTEHAD to cope with the situation and getting back its past renowned position.

Point of Discussion:

Being a student of “Brand Management”, you are required to discuss that on which areas ITTEHAD should work upon in order to compete with its rivals and regain its past position in the market place?

What can a company do if its market share has been eroded to competitors?

There are three key strategies that companies often use to regain market share once it has been lost.

1.      Pricing changes

2.      Promotional changes

3.      Product changes

All three strategies have unique benefits and all are risky for different reasons.

Companies often compete with one another in terms of market share that is, how big of a slice of a particular market a company's sales represent.

If market share is lost to a competitor, there are several strategies that companies often use to fight back: lower prices, greater marketing effort, and innovating.

The strategies may be successful, but they are not sure-fire by any means.

Lowering Prices

By dropping prices, companies hope to lure customers away from competitors. The benefit is a higher market share, but it comes at a cost: lower margins per unit. This strategy is particularly attractive to large companies that have high economies of scale that allow them to operate at either a lower marginal cost than their competitors or that make it possible to operate at a loss if needed. It's risky because, once prices drop, it can be hard to raise them again, unless the company regains enough market share to muscle out its competitors.

Everybody likes a good sale, and being able to entice customers to return through lower prices can be an excellent short-term strategy. But keep in mind that competitors will see this and also lower prices in turn. This benefits consumers but can lead to a race to the bottom for producers.

Promoting the Brand

Another approach is to change its methods of promotion, which can include raising the advertising budget or using the power of branding for the firm. Depending on how well company leaders identify the specific issues that need to be addressed, playing with promotional efforts can be very successful or often just simply a costly exercise.

Advertising, marketing, and promotion is a tried and true method of regaining market sure, but keep in mind that advertising is an on-going process and the competition is spending money on advertising as well.

Updating Product Offerings

Finally, a company can revamp its offerings to better meet customer needs or to provide something new. Apple successfully tried this tactic in 2014 by introducing the iPhone 6, a significantly revamped version of its smartphone; an instant hit, it enabled Apple to take back some of the market share it had lost to Google's  Android. This strategy can be combined with raising prices to introduce another aspect of differentiation or to position the company's offering as a premium product.

Competition not necessity is the mother of innovation in the business world. Coming up with new or updated product offerings can work in the short-term, but if a company cannot keep innovating and generating new and novel products that consumers will demand in the future, it will not have a lasting effect.

OR

Five Ways Your Business Can Grab Market Share Today

1.      Stay relevant through innovation. One great way to gain market share is to spot new trends ahead of competitors.

2.      Respond to customers fast.

3.      Use customers' ideas. ...

4.      Snap up competitors. ...

5.      Be more flexible.

OR

7-Step Brand Positioning Strategy Process

1.      Determine how your brand is currently positioning itself.

2.      Identify your direct competitors.

3.      Understand how each competitor is positioning their brand.

4.      Compare your positioning to your competitors to identify your uniqueness.

5.      Develop a distinct and value-based positioning idea.

6.      Really understand your targets need.

7.      See brands through consumers eyes.