Market Challengers, Market Followers and Market Nichers - Essay Example

In Information Technology markets, however the companies do not hesitate in openly comparing their features with those of the competition by publishing named comparison tables between specific models - like Apple Macintosh compared with Microsoft Windows, Red Hat Linux compared with Microsoft Windows, IBM storage model compared with HP storage model, etc. These comparisons are printed in brochures that are sent to the decision making personnel of organizations through channel partners. The author has come across decision making documents written by IT managers in comparing between such companies by carefully studying what each vendor in competition presents in comparison with others.

The brochures indicate kind of cut throat competition among vendors whereby the negative parts of the competition are highlighted promptly by each vendor - the fight is to influence the decision maker as much as possible in their favour. Example of Market Follower Market followers do not attempt to achieve drastic changes in consumer attitudes towards new innovations because they are scared of the back firing of such strategies. However, Banbury and Mitchell (1995) argue that "firms that define themselves as pioneers tend to garner greater market share than those that define themselves as followers".

In Croatia a number of local food outlets try to design their fast food products in line with popular chains like McDonald and Pizza Hut but none of them attract consumers to the extent companies like McDonald and Pizza Hut are able to, in spite of keeping lower prices or offering discount schemes. The author himself feels reluctance in going to such joints given their strategy of just following the established brands and only visits them just for occasional change of taste. As per Banbury and Mitchell (1995), even slight innovations in established products can improve the market share of companies if they are able to tangibly demonstrate them to the consumers.

Example of Market Nicher The concept of niche market positioning to establish: (a) Organization's own niche markets (b) Consumers possessing distinctive choices (c) Socio-demographic positions associated with consumers and their corresponding choices (d) Niche products matching consumer choices [Hannan and Carroll et al. 2003] In Croatia, Oracle is perceived to be targeting niche markets. In the author's auditing assignments, it was discovered that Oracle's products are priced much higher than the competitive products by Microsoft and IBM by virtue of certain features that are unmatched by the competition and the choice of some IT managers running mission critical applications who never look forward to any other database products (they call it RDBMS) than Oracle.

Also, Oracle is found to be non-flexible in their pricing strategies and kind of unwilling to compete in the market segments where Microsoft & IBM are popular. The author could