Marketing Warfare: Defensive Strategy
When you are the clear market leader with some decent competition, you should be practicing defensive marketing. In defensive marketing warfare, a market leader does their best to protect their market share, profitability, and brand perception against growing competitors. If you do not enact defensive marketing, you risk losing customers to your competition.
How many can you lose before you are second best?
Fundamentals of Defensive Marketing Warfare
- Only the market leader needs to be defensive.
- Attacking your own business is the best defense. Introduce products that are better than the ones you currently own. Short term profit margin losses may ensure your long term goal of market share.
- Block the strongest offensive moves made by the competition. You shouldn’t feel the need to respond to every little company’s attack ads, especially if they are far from you in company size. Then you’ll just come off as a bully. But if you are the market leader, and the number two business makes a strong offensive – it is important to remind users and the public about your own strengths – be sure the competition doesn’t make any significant gains.
Too many times, companies with limited resources have tried to attack the market leader. The element of surprise can help, but if the market leader is large, and has an entrenched, well-prepared defensive strategy in action – you need a very large attack to have any hopes of winning. Most companies cannot sustain that kind of campaign for very long, and wind up collapsing under the strain. Even when the attacking business is large itself – the logistics and planning behind a large scale attack (promotional or advertising campaign, perhaps) ruin the hopes of any real surprise – making it even harder to pull from the market leader.
Examples of Defensive Marketing Warfare
Starbucks used to have a deal with AT&T to charge users for WiFi if they didn’t purchase anything in store. However, as other coffee shops and and hangouts began advertising their free WiFi services, Starbucks noticed a drop in revenue.
Starbucks has since jumped on the bandwagon – ensuring that they don’t lose those customers to other establishments by offering free WiFi at all it’s establishments. Not only that, but they have dedicated themselves to even faster WiFi than the competition.
A classic and often referenced example of a well-executed defensive block was when Johnson & Johnson defended an attack by Bristol-Myers in the 1980s.
Although it is now sold anywhere any kind of medication is sold, Tylenol wasn’t always heavily advertised. Though Anacin, Bayer, and Excedrin dominated the market with their aspirin-based products, Tylenol’s acetaminophen-based product had a good share of the market, thanks to information campaigns led by McNeil laboratories teaching doctors about the benefits and uses, as well as encouraging recommendations to customers.
Realizing there was an opportunity here, Bristol-Myers introduced a direct competitor to Tylenol: a similar acetomenaphen-based medication called Datril.
Datril was introduced to the public as a product that was “just as good as Tylenol, only cheaper.’ With a price 35% lower than Tylenol, Bristol-Myers thought they had a winning strategy.
Johnson & Johnson did not take this one sitting down. In a single weekend, they put not only Mcneil’s salesforce to work, but the entire Johnson & Johnson salesforce to work on Tylenol, even going so far as to drop the price to match that of Datril, persuading TV networks that Datril’s commercials were false advertising, along with a string of other defensive strategies.
Thanks to the years of informative campaigns reaching out to doctors and medical professionals, combined with the quick response to Datril’s attack – Tylenol grew into an even stronger brand because of it.
• Hauser, John and Steven Shugan. Marketing Science, Vol. 27
• Ries, Al and Jack Trout. Marketing Warfare.
• “Marketing Strategy Models.” Venkatesh Shankar. 2010. Wiley International Encyclopedia of Marketing.
• Guiomar Martín-Herrán, Shaun McQuitty, Simon Pierre Sigué. (2012) Offensive versus defensive marketing: What is the optimal spending allocation?. International Journal of Research in Marketing 29, 210-219.