Marketing Warfare

MARKETING WARFARE

By Paul Herbig, Managing Director HMA

EXECUTIVE SUMMARY

Marketing warfare is a term used to describe some of the techniques and tactics marketeers use in their everyday language. There are two types of force a business can use against it's competition. The first is offensive attack and the second is defensive attack.

Frontal attack, Flanking, Encirclement, Bypass and Guerilla warfare are some examples of an offensive marketing warfare strategy. When using the offensive strategy it is important to remember three important principles: 1. The main consideration is the strength of the leader's position. 2. Find a weakness in the leader's strength and attack at that point. 3. Launch the attack on as narrow a front as possible (Ries, 1986).

Defensive marketing warfare involves employing those tactics and strategies to maintain the market share a company has already achieved. There are three important guidelines to remember in defensive marketing warfare: 1. Only the market leader should consider playing defense. 2. The best defensive strategy is the courage to attack yourself. 3. Strong competitive moves should always be blocked (Ries, 1986).

Some examples of current marketing warfare can be seen in the cola, beer and burger wars. Through observing these market segments, a marketer can see marketing warfare in action.

All in all, marketing warfare is something each marketer will experience in his marketing career. In order to be a successful marketer it is important to have a complete understanding how to win the marketing war.

MARKETING WARFARE

INTRODUCTION

Marketing Warfare is a term used to describe some of the techniques and tactics marketers use in their everyday language. First, there are two types of force a business can use against it's competition. The first is offensive attack and the second is defensive attack. Before a person can understand the concept of marketing warfare they must understand the terms which are associated with this type of marketing strategy.

The ideas behind attack and defend are two very different ideas. Attack basically means to seek more than one has, moreover to take what someone else possesses (Kotler, 1981). Defense means to protect what one has already acquired.

OFFENSIVE MARKETING WARFARE

Frontal attack, Flanking, Encirclement, Bypass and Guerilla warfare are some examples of offensive strategy. When using the offensive strategy in marketing warfare, Al Ries and Jack Trout suggest three offensive principles which include: 1. The main consideration is the strength of the leaders's position. 2. Find a weakness in the leader's strength and attack at that point. 3. Launch the attack on as narrow a front as possible (Ries, 1986).

FRONTAL ATTACK

Frontal attack occurs when a company takes all of their forces and faces them directly opposite of the opponent (Kotler, 1981). In order to be successful with this type of an attack, statistics show that a factor of five to one is needed for a successful frontal attack (Kotler 1981). For example, in the 1970's three electronic giants tried to attack IBM head on against their stronghold on the mainframe computer market (Kotler, 1981). Each electronic corporation failed because they used a pure frontal attack against IBM's massive stronghold.

There are many types of frontal attacks including: a pure frontal attack, a limited frontal attack, price based frontal attack, and research and development based frontal attack (Kotler, 1985). A pure frontal attack involves matching a competitors product in all areas of marketing (Kotler, 1985). The product is matched price versus price, promotion versus promotion, characteristic versus characteristic and so on. Basically, a pure frontal attack is taking a "look alike" or "me too" strategy (Kotler, 1985). When using a pure frontal attack, companies should be prepared to expend large sums of money.

The next type of frontal attack is the limited frontal attack. A limited frontal attack focuses on specific customers and tries to lure them away from competitors (Kotler, 1985). One example of a limited frontal attack may occur when a new product enters the market such as a new type of paint. The paint company would pursue a select number of their competitor's customers and bring them in on a whole number of product dimensions simultaneously (Kotler, 1985).

Another type of frontal attack is the price based frontal attack. In priced based frontal attack, the aggressor focuses mainly on the price of a product to gain more customers. Every product characteristic is matched; however, the competition beats his competitor on price (Kotler, 1985).

Finally, research and design is a fourth type of frontal attack. This is a more difficult type of attack to employ. The competitor tries to reduce production costs, improve the product, and other characteristics which would enhance product value (Kotler, 1985). With this type of attack, more creative ideas are implemented which allow for a better product.

There are three conditions that need to be met by a firm before it embarks in a frontal attack (Kotler, 1985). First, the firm needs an adequate amount of resources to support the attack (Kotler, 1985). Second, the firm must be able to create and sustain a competitive advantage over it's competitors (Kotler, 1985). Finally, the company must be able to persuade their competitor's customers to try their product and become their loyal customer. In the frontal attack, it is important that everyone in the firm and those who purchase the product perceive a competitive advantage (Kotler, 1985).

FLANKING MARKETING WARFARE

A second type of offensive strategy is the flanking strategy. In a flanking strategy, a company focuses it's forces on the weaker sides of it's competitor (Kotler 1981). Three principles of flanking warfare are mentioned in Al Ries and Jack Trout's book, Marketing Warfare. These principles are: 1. A good flanking move must be made in an uncontested area. 2. Tactical surprise ought to be an important element of the plan, and 3. The pursuit is as critical as the attack itself (Ries, 1986). Usually this offensive strategy is used by a company that does not have overwhelming superiority, but may have an advantage in one particular area. For example, in the mid 1970's Xerox owned eighty-eight percent of the plain-paper copier market; however, almost ten years later the Japanese based Canon Copier took over half of Xerox's market (Kotler 1981). The main reason Canon took over such a large portion of Xerox's market was by use of the flanking strategy. Canon focused on the small size copier market that could not afford Xerox's larger copiers. This attack was successful because it put the attackers strength against the defenders weakness (Kotler 1981).

There are two types of flanking strategy; Geographical and Segmented flanking (Kotler, 1985). Geographical flanking occurs when a firm attacks different areas within the world or country where competitors are nonexistent or not very strong (Kotler, 1985). The Coca-Cola Company uses this type of marketing strategy. When I interviewed Anna Whaley, Director of world wide marketing and sales, she said a majority of Coca-Cola's profits will come from the international areas where competition is not as fierce.

A second type of flanking involves identifying market areas or needs not being served by competitors within a geographical area (Kotler, 1985). Segmented flanking potentially can be more powerful than geographical flanking attacks because they satisfy market needs the competitor has ignored (Kotler, 1985). The Japanese have used segmented flanking when entering the United States market (Kotler 1985). They brought products that were different and aimed them at neglected market segments (Kotler, 1985). These products were smaller or stripped down versions of established products, and they had more features for the same or lower price (Kotler, 1985). The overall idea of flanking strategy is to bring a broader coverage of a markets varied needs (Kotler, 1981).

MARKETING WARFARE THROUGH ENCIRCLEMENT

Encirclement is a third type of offensive strategy. When using this type of strategy a company must have superiority in all areas. Encirclement attacks the competitor from all sides simultaneously (Kotler, 1981). A ratio of ten to one is needed to employ this type of strategy (Kotler, 1981). The basic idea of encirclement is to force the competitor to protect their product from all sides. For example, Smirnoff Vodka used encirclement strategy when another product was introduced and positioned itself directly against Smirnoff, but at a lower price (Kotler, 1981). Smirnoff counterattacked by first raising it's prices, which preserved their quality image. After raising their prices, they introduced another brand, marketed it at the same price as the competition, and introduced another brand at a lower price (Kotler, 1981).

There are two types of encirclement strategy: product encirclement and market encirclement (Kotler, 1985). Product encirclement introduces products with many different qualities, styles, and features that overwhelm the competition's product line (Kotler, 1985). Many Japanese firms have encircled U.S. products such as televisions, radios, hand-held calculators, watches, and stereo equipment (Kotler, 1985). Market encirclement goes beyond the end user, and focuses on the distribution channels (Kotler, 1985). Seiko is

...