Positional defense, Flank protection - International marketing

Positional Defense

Today, the limitation of the company's actions solely by defense attitudes is seen as a form of marketing myopia. The policy of Henry Ford, who has seen nothing but his Model T, has put the largest company with an annual income of over $ 1 billion, to the brink of bankruptcy.

Mark & ​​quot; Ford T & quot; was released in 1908. This machine of all times and peoples has proved to be light, compact, cheap and simple.

In 1909, Henry Ford announced that he would produce cars only of this brand. Competitors were pleased with this statement. Ford predicted bankruptcy from all sides.

In the season of 1909-1910. the price of the car was $ 950, and 18 664 cars were sold. A year later the car cost $ 780, and 34 528 cars were sold. In parallel to the growth in sales, the price of the car has been steadily declining.

In 1913 Ford introduced the assembly line. In 1916-1917 years. 785,432 vehicles were sold at a price of $ 350. Model & quot; Ford T & quot; flooded America.

In 1923, 10,000 cars were produced daily. In 1927, when the release of the most successful model of the Ford & quot; was stopped, the number of cars produced was 15,007,033 units. In the literature, this issue is called the 15 millionth FordT. "

We see that the price of the famous car was falling more and more every year, and new cars were not produced until 1927. In our time it is unlikely that a company with a strategy of position defense will hold out for a long time in the market.

Even brands such as Coca-Cola and Aspirin (company Bayer ) can not be considered a guaranteed long-term source of growth and profits. Today, Coca-Cola, despite the fact that it sells about half of all soft drinks in the world, acquires firms that produce fruit drinks, and diversifies production. A company that has been attacked is highly reckless if it concentrates resources in building fortifications around an existing product.

Defending the flanks

In the 1990's. the vodka company Wolfschmidt has launched a real attack on its competitor, Heublein, which owns 23% of the American vodka market and is the manufacturer of the well-known brand Smirnoff. Wolfschmidt claimed that its products are in no way inferior to Smirnoff, but the price per bottle is $ 1 less than the competitor's.

Heublein company considered several possible response strategies: first - to reduce the price of a bottle of Smirnoff vodka by $ 1, and thus retain its market share; the second is to keep the price, while increasing the cost of advertising and promotion; the third is to keep the existing price for a bottle of vodka and allow it to reduce its market share. All three strategies led to a decrease in profits, and it seemed that Heublein was in a known losing position.

And here the marketers of the company Heublein realized how to act. It was decided to increase the cost of vodka Smirnoff by $ 1. Then the company released a new brand of vodka - Relska, sold at the price of vodka Wolfschmidt, so that on an equal footing to compete with Wolfschmidt and in this price category. Then another brand of vodka was released - Popov, whose price was even lower than the price of vodka Wolfschmidt .

As a result of using this strategy - the pricing strategy within the product range Smirnoff was positioned as an elite, and Wolfschmidt - as an ordinary brand of vodka. It is this extremely reasonable strategy of Heublein and subsequently led to a significant increase in its gross profit.

Thus, Heunlein has protected Smirnoff from the flanks.

Note, it is believed that all three vodka offered by the company Heublein, are virtually indistinguishable neither in taste nor in production costs.

It should be borne in mind that the value of flank protection increases, if the tactics of its implementation are carefully worked out. 1

Also We Can Offer!

Other services that we offer

If you don’t see the necessary subject, paper type, or topic in our list of available services and examples, don’t worry! We have a number of other academic disciplines to suit the needs of anyone who visits this website looking for help.

How to ...

We made your life easier with putting together a big number of articles and guidelines on how to plan and write different types of assignments (Essay, Research Paper, Dissertation etc)