UGC NET COMMERCE January 2017(Paper-II) Q28
0. Which of the following is not a reason for a firm to lose its market share to competitors?
- A
A product/model is perceived by the target customer group as satisfying needs.
- B
Customers not being covered by the company’s sales force and distribution outlets.
- C
Customers may have been lost to competitors due to poor service by the firm or its sales personnel or product becoming obsolete or more expensive.
- D
All the above are correct reasons for given condition.
- Option : A
- Explanation : Competition Oriented Marketing Strategies
Marketing has often been termed as a warfare. The battlefield is the customer’s mind and the rival forces are competitor firms. It is imperative that the firm also considers principles of this warfare that will give it a competitive edge and hence market leadership. In this section, we shall focus our attention on competition based strategies.
A good starting point is the market and the company’s market share in it. A detailed analysis of these two may reveal possible strategic options to a firm in gaining competitive advantage. For example, this analysis may reveal that a certain proportion of the market does not buy the firm’s product only because it does not find the product or model satisfying its needs. The firm may even find that not all potential customers are being covered by the company’s sales force or distribution outlets. Given Fig. presents these possible sources of competitive differentiation.
The point to be noted here is that a firm may lose its market share to competition because of any or all of the following reasons:
(a) product/model not offered or not perceived by target customer group as satisfying needs.
(b) customers not being covered by the company’s sales force and distribution outlets.
(c) customers may have been lost to competitors due to poor service by the firm or its sales personnel or product becoming obsolete or more expensive.
To gain a foothold or win back lost customers, the firm has to expand its product mix, distribution coverage, ensure a more disciplined sales call pattern, train marketing and service personnel in customer care, evolve innovative pricing and payment plans to suit customer’s needs, and build the brand or corporate image.
