Describe the structure of a typical, non-fragmented market with examples for each segment

Question

What will be an ideal response?

Answer 1

• Market Leader: Most markets have a market leader on top with a large amount of market share, often about 40
percent (the exact amount varies from market to market). The market leader often dictates the tempo and pricing of
the market. For example, Hertz is the acknowledged market leader of the rental car market.
• Market Challenger: Just below the market leader is the market challenger. The challenger is the established
number two in the market, often with about 30 percent of the market share. For example, Avis is the acknowledged
market challenger of the rental car market.
• Market Follower: Following the market challenger is the market follower, a company that follows the lead of the
market leader and challenger. For example, companies like Dollar Rent a Car could be viewed as market followers,
because they generally follow the lead of Hertz and Avis.
• Market Niche Firms: At the bottom is a wide variety of market niche firms that fulfill market needs of specialty
areas within the market, often with only a few share points each. For example, niche firms in the rental car market
include a wide spectrum of offerings to accommodate different tastes, from exotic car rentals to Rent-A-Wreck.