When to start your counter-sales promotion? Part III

You may be interested to click on part I and part II before proceeding to the last part of this series. Now, if you are a market leader and being attacked by other weaker competitors with shorter time spanned promotion, you may either just ignore it or start sales promotion after theirs are over. What’s wrong if you start at the same time or in the middle of theirs? It will trigger revision of their programs, and perhaps will elongate their attack on you. Ultimately, there might be a situation where the industry price would see a long-run downward spiral change because of this promotional mud-slinging. This is going to be worse for everybody. What if you are the market leader and weaker competitors are attacking you with a longer series of sales promotion? In that case, you need to start counter attack on the day one, because anything less will boost their confidence and ferocity. They have more to loose, so they will bite you hard.

Let us move the attacking barrel to the weaker ones. What if a stronger opponent is attacking a weaker one with a limited time spanned sales promotion? You cannot afford the luxury of absorbing attacks and do nothing (or little), as was in the previous case with stronger opponent. You can either start counter attack on the day one (to let your opponent know that you won’t let them go without challenge), or in the middle of their campaign so that (i) your counter attack would be less expensive, (ii) you can hold funds back in order to fight later if your stronger opponent extends the duration of attack after you launch your counter attack.

How about your stronger opponent launching sales promotion with a series of sales promotion in a longer time span? It would be something that weaker opponents would not dream of, but this could well happen. It occurred in our telecom sector in the last few years. Most times, even though not necessarily, extended sales promotion campaign is run through nominal price discounts. Weaker competitors are recommended to start counter-attack on the day one, surprising the stronger opponent because long-run price discounts are not expected from weaker competitors. This will have, most likely, three possible effects. First, it will shake the confidence of the stronger opponent that its ride on the program would not be as smooth as it thought; second, the negative price pressure on the industry would be worse for everybody, therefore, the stronger opponent might shorten the extended program; third, the stronger opponent could adopt even more brutal program than the previous one! Unfortunately (or fortunately?), strategic collusion among weaker opponents may ultimately take place, which may also include persuading the stronger opponent for not breaking the bottom of the boat.

Bottom line: you do not have many options when you are a weaker opponent. The good news is, all the strategy talks here do not contain any hard and fast rule. Break them with courage at your own risk. No risk, no gain.


About 1mmarketing

Working as Associate Professor, School of Business, United International University, Bangladesh; a North-American graduate, with doctoral studies from UUM, Malaysia; cherishing a wide-view of the world, with multiple interests in culture, people, traveling, and specifically marketing science. I have a colorful and diversified background with a blend of corporate experience, research, consulting, training, public speaking and teaching. I love to write about marketing issues that affect our lives, and talk about its direction that would promote the greatest human welfare.
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