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Introducing new brand into a market - Case Study Example

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To introduce a new brand into a market which is dominated by one company is important to define the role of the firm in the competition, to illustrate the roles that a company may have, I will expose the example of Auchan France as a challenger, Archos France as a runner-up, and Geox Italy as a nicher.
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Currently, Auchan has formed an alliance with the telecommunications operator Wind, in Italy, to build the strongest virtual operator, supported physically by Wind to offer telecommunication services as well as attractive promotions and fidelity options to give customers a reason to choose its supermarket over the current leader. This is an example of the "flanker strategy" - the objective of this strategy is to defend an exposed flank, which in business terms, is translated into a weakness in the leader's offering. "a follower may try to capture a leading share in a market segment with a differentiated product where the leader is not strong." (Avlonitis, 2006, p. 49). Attacking a non natural action field will give them an advantage over Carrefour that will require time for them to regain.
Archos France is a company that produces electronic components, specifically those dedicated to multimedia applications. The role of Archos is the one of a company that follows the pace of the technology dictated by other leaders like Apple. Its strategy is based on producing almost cutting edge technological products at a lower cost than the concurrency but not trying to get the leadership position, since the company does not invest in innovation and advertising to the extent of the leaders in the industry. This is despite the fact that the company claims to have an objective of being an innovative company that brings pocket entertainment to customers (Archos, 2008). "Firms which undertake a good deal of innovation often have to recoup massive investment costs. Market followers are able to copy what the leading firms produce and save themselves the burden of massive investment costs. This means that they can operate very profitably at the going price in a market." (Proctor, 2000, p.109). An example of this strategy is the multimedia reader Archos 405 which is a product that resembles the iPod touch from Apple but with less appealing characteristics that allows it to be commercialized at half the price.
Geox Italy is a firm that works in the shoe industry where other companies like Nike or Adidas are leaders. The difference with the strongest brands is that Geox was born based on the innovative idea of creating a shoe that allows transpiration to go out of the shoe through holes that do not allow water to come in. Its objective is to create shoes that guarantee those aspects giving the company a strong niche orientation, "A cardinal rule for successful entrepreneurs is "find a market niche." Specialization in a product area can make you the recognized expert." (Lesonsky, 2001, p. 45); the family of shoes that uses the Geox breathes patented system was a success among the customer that searched waterproof shoes that allowed the feet to remain dry, a sector of the market which was not considered by the market leaders and challengers such as Reebok, Le Coq Sportif or Avia.
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An Overview
Many companies consider launching new brands and products into the market with hopes that it will provide these brands sustainability and an increase in market share. While processes for dealing with competition differ from one region to the next, it is also important to recognize that for some brands, their competition might not require the same marketing competitive ...Download file to see next pagesRead More
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