The development of new product is of course risky, time consuming as well as expensive. Firms need to produce dozen of ideas regarding new products where only one idea might result in successful product. The failure rate of new product is much higher than the success rate, as high as 80% and the reason for failure are numerous, like inadequate market survey, poor screening, market orientation, product defects, and some inadequate launching effort (Boone & Kurtz, p.398). Due to high investment which is needed to produce the products and various other steps needed to take care of by the manufacturers to ensure success of the new product, most of the firms think that new product development is not worth huge investment because of the rate of failure, and believes that it is much more feasible and easier to copy the market leaders product. Market leader are referred to as those organization which poses the largest market share in a particular market and the market followers are those organizations which imitates the top market leaders but at the same time do not upsets the ongoing balance with respect to the competitive power of the respective industry. These market followers prefer to avoid the direct attack and reap the product benefits of innovations which are made by the leaders of the respective market through imitations. To imitate the market leader and avoid making huge investment, the market followers adopt four major approaches, Counterfeiter strategy is adopted by the market followers when they aim to duplicate the products of market leaders and packaging style and therefore sell in the black market. The strategy of counterfeiter has plagued brands like Apple and Rolex mostly in Asia. Secondly, cloner strategy is being used to emulate the market leader’s product name and packaging one such example of cloner is Ralcorp Holdings which sells off imitation of brand cereals in lookalike containers at a much lower price. Thirdly, the market followers adopt imitator strategy where some features are copied from the market leader while retaining few features of its own. The last strategy used by market followers is the adapter strategy which involves adoption of owns product as that of market leader and sells the product into different market. S&S Cycle supplies engine to the firms which builds bikes like Harley. The company buys, every year Harley Davidson and takes off the engine apart and finds out what to be improved. The followers earn or make profit at a lower rate than the market leaders. One such example s the food processing industry which revealed that only the top two companies were profitable (Kotler, p. 194). Among the mobile phone manufacturer, Philips a well known European brand also fall under the category of market followers. There are other Asian companies which operate on the European mobile market such as Sharp, Haier, Pantech, NEC, Innostream and Sanyo (Anonym, p. 15). Market followers is the runner up organizations in the industry whose major intentions are to hold the market share without investing and also providing challenges to its strong competitors. But however this does not mean that the market followers lack any kind of strategies in fact it is believe of the followers that it is much more advantageous to remain follower and pursue the ‘me too strategy’ rather than being the market leader. The strategy to remain market follower is believed to be effective because the
Marketing Referral Assignments Contents Question 3 Reference 9 Question Discuss the view that it is not worth the huge investment that is necessary to develop new products when it is much easier to copy the market leaders’ products. Give examples of market leaders and market followers…
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ly caters to the youth market, between 18 and 34 years of age, who demand exclusivity in their clothing purchases with a modern flair to fit their less-resourceful budgets. In this highly saturated and competitive industry, fast fashion is the ability of a clothing company to
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