Question

Discuss proactive and defensive marketing in context to the company position in the hypothetical market structure (that is leader/challenger/follower/nicher). Which approach do you think a company should take based on its market share.    

Answer 1

Defensive marketing strategies refer to the actions of a market leader to protect its market share, profitability, product positioning, and mind share against an emerging competitor. If not undertaken, some amount of customers will leave the established business in favor of the competitor—who can even displace the market leader and rise to the top.

Proactive marketing is a form of marketing that allows for marketers to be agile, real-time, data-driven, and adaptable to the ever-changing space of what their customers could be seeking. It encompasses all forms of marketing, but shows marketers the direction to head in to secure the most benefit before performing the actual campaign.

Proactive marketing shows a marketer what’s happening in their landscape with all of their competitors now and what path marketer should take to reach their audience effectively before generating failed campaigns.

Some business strategies can be seen as defensive, while others go on the offense. Defensive business strategies are reactionary and involve a wait-and-see approach, observing what competitors are doing and then responding. Offensive business strategies involve taking proactive, often aggressive action in the market. This action can be focused directly at competitors or aimed at securing market share regardless of the existing competition.

A classic example of an offensive business strategy is direct, head-to-head competition. This type of direct competition could take the form of selling a product similar to a competitor's at a lower price or highlighting quality differences between one product and another. This type of offensive strategy can lead to destructive price wars that ultimately harm both organizations, however.