MARKETING SUPPORTING STRATEGIES
 

 

 

 

 

 

 

 

 

 

 

 

It is rather common for firms competing in the same industry to choose different core and supporting strategies through which to compete. The chosen strategy reflects the particular strength of the firm, the specific demands of the market, and the competitive thrust. As has been noted: Coca-Cola was born a winner, but Pepsi had to fight to survive by distinguishing itself from the leader. For most of its history, Pepsi differentiated itself purely on price: “Twice as much for a nickel, too.” Only in the early 1970s did Pepsi start to believe that its product actually may be as good as if not better than Coke’s. The resulting strategy was: “The Pepsi challenge.” The first belief of Coca-Cola was that its product was sacred. The resulting strategy was simple: “Don’t touch the recipe” and “don’t put lesser products under the same brand name” (call them “Tab”). Coca-Cola’s second belief was that anyone should be able to buy Coke within a few steps of anywhere on earth. This belief drove the company to make its product available in every conceivable outlet and required a distrib- ution strategy that allowed all outlets a reasonable profit at competitive prices. While Coca-Cola was driven by a product focus, Pepsi developed a more market- oriented perspective. Pepsi was the first to offer new sizes and packages.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

When consumer trends toward health, fitness and sweeter taste emerged, Pepsi again was the Strategy Selection innovator: It was the first to market diet and light varieties and it quickly sweetened its formula. Unencumbered by reverence for its base brand, it introduced the new varieties as extensions of the Pepsi signature. Where Coca-Cola feared a dilution of its brand name, Pepsi saw an opportunity to exploit the cost advantages and advertising of an umbrella brand. It is important to remember that the core strategy is formulated around the critical variable(s) that may differ from one segment to another for the same product. This is well supported by the following quotation taken from a case study of the petroloids business. Petroloids, a family of such unique materials as oils, petro-rubbers, foams, adhesives, and sealants, are manufactured substances based on the synthesis of organic hydrocarbons: Major producers competed with one another on a variety of dimensions. Among the most important were price, technical assistance, advertising and promotion, and product availability. Price was used as a competitive weapon primarily in those segments of the market where products and applications had become standardized. However, where products had been developed for highly specialized purposes and represented only a small fraction of a customer ’s total material cost, the market was often less price sensitive. Here customers were chiefly concerned with the physical properties of the product and operating performance. Technical assistance was an important means of obtaining business. A sizable percentage of total petroloid sales were accounted for by products developed to meet the unique needs of particular customers. Products for the aerospace industry were a primary example. Research engineers of petroloid producers were expected to work closely with customers to define performance requirements and to insure the development of acceptable products.