Marketing Strategy and Competitive Positioning pdf ebook

Figure 3.9 
Sales of 
iPods
Source: iPodlounge.com. 
Data are for every two 
months from November 
2001 to May 2004. Thus 
11 is November 2001, 
1.02 is January 2002, etc.
3,500,000
3,000,000
Introduction
Growth
Sales
11 1.02 3.02 5.02
11 1.04 3.04 5.04
7.02 9.02 11 1.03 3.03 5.03 7.03 9.03
2,500,000
2,000,000
1,500,000
1,000,000
500,000
iP
ods sold
Time
0

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78
CHAPTER 3 THE CHANGING MARKET ENVIRONMENT
competition, market fragmentation and declining profits, due to over-capacity in the indus-
try. Indeed, competitors will try to uncover untapped niches and/or enter price wars. This 
leads to a clear-out and the weaker competitors will exit, possibly becoming suppliers to 
the stronger ones or being bought by them (as has been the case in the car industry). The 
survivors will be companies supplying the bulk of the market, or competing on a high-
volume–low-margin basis, or market nichers. Many firms will try to buck the trend and 
revamp their PLCs (not always successfully, as both KitKat and Barbie experienced after 
unsuccessfully launching new variants of their products), or expand the market by creating 
a new segment, and hence extra demand overall, as Swatch did. 
Mature markets are also likely to see a degree of product substitution, where one product 
form gives way to another. One example is the US car market, where increasing gasoline 
prices, coupled with increasing concern over emissions, has led to a decline in the sports 
utility vehicle (SUV) market but a rapid increase in sales of hybrid cars (see Figure 3.10 ).
Decline stage 
This stage is marked by a slow or rapid decline of the sales of the product. Decline may be 
due to better solutions supplanting weaker ones (for example, new technology such as the 
USB flashdrive replacing floppy and zip disks, and now the Cloud replacing flashdrives), a 
change in consumer tastes or an increase in competition, be it domestic or international.
3.9 
Strategic groups 
Within industries, a useful basis for analysis can be the strategic group. A strategic group is 
composed of firms within an industry following similar strategies aimed at similar custom-
ers or customer groups. Coca-Cola and Pepsi, for example, form a strategic group in the soft 
drinks market ( Kay, 1993 ). The identification of strategic groups is fundamental to industry