Final answer:
The strategy that focuses marketing resources on leading brands with the potential for top market share is called Brand Pruning. It helps a company to concentrate on its core competencies and allocate marketing efforts efficiently, which is crucial in markets with dominant players like Coca-Cola and Pepsi.
Step-by-step explanation:
The strategy being referred to in the question is Brand Pruning. This approach involves analyzing a company's portfolio of brands and discontinuing weaker or less profitable ones, thereby allowing the company to concentrate its marketing budget and resources on the brands that have the potential to achieve a top market share position, usually number one or number two, and have good growth prospects. The goal of brand pruning is to streamline the brand portfolio, focusing on core competencies and ensuring that marketing efforts and resources are allocated to the most promising and profitable brands. It is contrary to other strategies like brand differentiation, which focuses on distinguishing a brand from its competitors through unique features; brand extension, which involves expanding a brand into new categories; and brand consolidation, which can involve merging multiple brands into a single one.
It is essential for a company, especially in an oligopoly, where a few firms dominate the market, to have a recognizable brand and successful marketing strategies. Strong brand recognition, similar to what is seen with companies like Coca-Cola and Pepsi, requires significant investment and focus, which is more manageable with a limited number of strong brands.