Which of the following strategies would most likely be utilized by a market challenger in a competitive market?

• A. Maintaining the status quo and avoiding competition
• B. Aggressively lowering prices to gain market share
• C. Setting prices above the market leader to signal premium quality
• D. Focusing solely on niche markets with little competition

Answer: (B)

Verified step by step guidance

1. Step 1: Understand the role of a market challenger. A market challenger is a firm that is not the market leader but aims to increase its market share by competing directly with the leader.
2. Step 2: Analyze the strategy of maintaining the status quo and avoiding competition. This approach is more typical of a market follower, not a challenger, because challengers seek to grow and challenge the leader.
3. Step 3: Consider the strategy of aggressively lowering prices to gain market share. This is a common tactic for challengers because it attracts customers away from competitors by offering better deals, thus increasing their market share.
4. Step 4: Evaluate the strategy of setting prices above the market leader to signal premium quality. While this can be a strategy, it is less typical for challengers who usually try to compete on price or innovation rather than positioning as premium.
5. Step 5: Review the strategy of focusing solely on niche markets with little competition. This is more characteristic of a market niche player or specialist, not a broad market challenger aiming to increase overall market share.