A market follower strategy is employed by companies that want to allow a market leader to bear the cost of developing a new product or service offering then introduce their own version. The follower can often provide the same offering at a lower cost as they don’t need to recoup the higher cost of introducing a new product into the marketplace. There is less risk in being a market follower than a market leader thus this strategy is often employed by companies that want to play it safe. A market follower must maintain low operating costs but meet the quality demands of the marketplace. Following are ways that companies employ market follower strategies:
- Adaptation – When a company incorporates a competitor’s offerings into their own product and service offerings they’re employing an adaptation strategy. This is seen quite often in any industry in which competitors are in very close proximity and customers can easily choose one over another. In the automotive repair business companies often incorporate new services and techniques into their service offerings that they learn about from their competitors.
- Imitation – An imitation marketing strategy usually involves offering the same product or service as the industry leader at a lower cost. By utilizing this strategy a company allows the market leader to absorb the cost of developing the offering and building recognition in the marketplace. Then they introduce the same offering with modifications at a competitive price as the cost is lower.
- Cloning – A cloning marketing strategy refers to the act of copying a competitor’s products with possibly a very subtle difference. In this situation the customer will recognize no difference between the offerings of the two companies.