market leader strategy

Definition:
One of four basic competitive marketing strategies identified by Philip Kotler (Marketing Management, 4th edn, 1980) the others being MARKET challenger, market follower and MARKET NICHE. By definition there can only be one market leader in a given industry/ market and its dominant position may have arisen from any one or combination of several factors. Frequently, the market leader was first to market and has maintained its lead as other rival firms have attempted to emulate it. In many cases, the innovator has had patent protection and this has enabled him to develop a dominant position before direct competition has become possible, e.g. Polaroid in instant photography, Xerox in dry-copying. In other situations, the dominant firm was not first to market but, due to its greater efficiency in either production and/or marketing it has been able to secure the leading share of the market. Market leader strategies are often defensive in character, particularly where the firm controls a market share which might be construed as enabling it to exercise MONOPOLY power (25 per cent or more in the UK). In such situations growth may be easier to achieve by expanding the total market size through stimulating primary demand or by diversifying into a completely new market. In stimulating primary demand the basic options available are: (a) find new users; (b) find new uses; (c) encourage greater usage.

Cross-References:
[market] [market niche strategy] [monopoly]

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