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Y. Datta, Ph.D., Professor Emeritus, College of Business, Northern KY University.


Porter identifies high market share with cost leadership strategy which is based on the idea of competing on a price lower than that of the competition. However, in most consumer markets a business should serve the middle class by competing in the mid-price segment, offering quality better than that of the competition at a somewhat higher price. It is this path that can lead to market share leadership: a strategy that can be both profitable and sustainable. The U.S. men’s shaving cream market consists of two major product-market segments: gel and foam. We test the hypothesis that the best-selling brand is very likely to be a member of the mid-price segment with a price tag that is higher than that of the nearest competition. This study is based on annual U.S. sales data for 2008 and 2007 from discount retail stores, food stores, and drug stores. We performed two separate analyses for 2008 and 2007, using cluster analysis as the main analytic tool. The results were remarkably consistent between the two years. In the gel segment—by far the most important—the price-quality segmentation analysis supported our hypothesis. An interesting finding is that, for both the gel and foam segments, we found the rank order correlation of brand unit price between 2007 and 2008 as highly significant. This means that in this market management considers the price of a brand as a strategic rather than a tactical variable. Although, technically the results for the foam segment were negative, this does not necessarily contradict our hypothesis. Finally, we discovered six strategic groups in the industry and have tried to articulate what their competitive strategy is. 


an integrated approach to market segmentation, price-quality segmentation, market share leadership, strategic group theory, operationalizing competitive strategy, price a strategic variable

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