Prospectors
This article covers meaning & overview of Prospectors from marketing perspective.
What is Prospectors?
Business strategies adopted by companies can be classified based on the degree of aggressiveness that they assume. Aggressiveness can be in terms of the risk taken, financial leverage, speed of decision making or the type of product changes and marketing strategies. On the basis of the degree of aggressiveness, strategies can be classified as prospector, analyzer, defender and reactor, of which the prospector strategy is the most defensive of the lot and is normally adopted early in the life cycle of a product, or in the growth stage of a technology or when there are few competitors in the market.
This involves new product development, expansion into new market opportunities and increase of market share through offensive and aggressive marketing warfare strategies. Most entrepreneurial firms begin as prospectors and operate in domains where the technology and customer segments are not very well established. The risks include high leverage, chances of product failure and rejection of products by consumers and considerable capital investment in product development and marketing. Price skimming is a common strategy adopted where the products are priced relatively higher and then the prices are gradually dropped. Significant investments are made in the sales promotion, marketing and advertising the products.
Two crucial aspects of the prospector strategy are
i) R&D, Product design and engineering and
ii) Marketing research.
The advantages of the prospector strategy are
- Expansion in market share due to first mover advantage in the new market
- Increased opportunities, higher sales and hence more profits and margins
- Building customer loyalty and motivation and inspiration for your sales team
The common examples of companies that have successfully adopted the prospector strategy include Universal Music, Cathay Pacific, Macquarie Telecom, EBay, Cisco, Acer etc.
Hence, this concludes the definition of Prospectors along with its overview.
Browse the definition and meaning of more similar terms. The Management Dictionary covers over 1800 business concepts from 5 categories.
Continue Reading:
