Market Entry Strategy

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The marketer can make use of market entry strategy by investing
in promotions or making widespread entree through low price, and
skimming strategies where the short-term gain is the objective with high
entrée price.

For services, the marketer is more capable of moving in at high speed than the goods marketer, as he does not have to grapple with such problems of production, inventory, storage and logistics.

Market Entry Strategy

  1. Rapid Skimming Strategy
  2. Slow Skimming Strategy
  3. Rapid Penetration Strategy
  4. Slow Penetration Strategy

Rapid Skimming Strategy

Rapid Skimming Strategy is an expensive initiative combining high price and high promotion, directed at a low aware, low willingness-to-buy market. This strategy is very useful if the market size and potential is very high and the likelihood of the competition to quickly adopt and adapt to the offer is also very high.

When a firm has a short-term goal of profit maximisation and an increase in the sales volume, it can resort to this strategy. The target markets are the Early Adopters and Innovators who do not mind paying the high price for the privilege of being the early users.

Example: The early entrants in the cell phone service operations like BPL Mobile, Max Touch/ Orange/Hutch, RPG Cellular, etc., followed this strategy.

Slow Skimming Strategy

Slow Skimming Strategy is used when the firm is confident that it can recoup its investments insufficient time. This could be due to lack of competition (public sector undertakings, infrastructure services like airlines, telecommunication, etc., are some examples), the requirement of heavy investments in technology and systems to compete, etc.

The target market, mostly business and industrial users pay for the high price as the product is exclusive and vital for their competitiveness.

Five-star hotels and Enterprise Resource Planning (ERP) and Supply Chain Management (SCM) System providers like SAP, BaAN, i2, Mindtree Consulting, etc., used this strategy.

Rapid Penetration Strategy

If the firm has a long-term objective of being a market leader, market share and profit maximisation, and if there exist entry barriers like intensive competition, then this strategy is useful. ICICI Bank as also Korean firms like Samsung and LG entered India with their dreaded retailing, using rapid penetration strategy. The price of their offers is lower but there is high visibility in the media. Big Bazar, the discounter major has successfully used this strategy to make its mark.

Slow Penetration Strategy

When the market size is large, well aware of the products and service offer and sensitive to price but the competitive threats are almost non-existent, this strategy is used. The long-term objective of the firm is to maximise sales or profits.

Reference

  • V. S. Ramaswamy, S. Namakumari; 2009; Marketing Management; MacMillan Publishers Pvt Ltd.
  • Tapan K Panda, Marketing Management, Excel Books.
  • Kotler, Keller, Koshy, Jha; 2009; 13th Edition; Marketing Management: A South Asian Perspective.

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