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Defining the Competitive Set

McGraw-Hill/Irwin

Copyright 2005 by The McGraw-Hill Companies, Inc. All rights reserved.

Bases of Competition
I. Customer-oriented
Who they are competition for same budget
When they use it
Why they use it- benefits sought

II. Marketing-oriented: advertising and

promotion
Theme/copy strategy
Media
Distribution
Price

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Bases of Competition cont.

III. Resource-oriented
Raw materials
Employees
Financial resources

IV. Geographic

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Levels of Competition
Beers
Ice
cream

Tea

Regular
colas

Diet
lemon
limes
Diet-Rite
cola

Wine
Diet
Pepsi

Diet
Coke

Fast food

Bottled
water

Baseball
cards

Fruit
flavore
d colas

Lemon
limes

Coffee

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Product form
competition:
Diet colas

Juices

Product
category
competition:
Soft drinks

Video
rentals

Generic
competition:
Beverages
Budget
competition:
Food and
entertainment

Levels of Competition: Implications

for Product Strategy
Competitive Level

Product Management Task

Product
Form

Convince Customers that the

Brand is Better than Others

Product
Category

Convince Customers that the

Product Form is Best in the
Category

Generic

Convince Customers that the

Product Category is the Best Way
to Satisfy Needs

Budget

Convince Customers that the

Generic Benefits are the Most
Appropriate Way to Spend their
Money
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Energy Bar Competition

Other
Snacks
Healthy
Snacks
Snack/Health
Bars
Energy
Bars

Odwalla
Power Bar
Balance Bar
Clif
Nutrigrain Bars
Slimfast Bars
Granola Bars
Fruits
Nuts
Juice
Crackers
Chips
Candy
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PDA Competition
Level of
Competition

Definition

Competitors

Need Satisfied

Product form POAs Full-features

Palm Pilot VII

Compaq Aero
Casioplus integrated
communication
Cassio Poeia

Personal information
management plus

Product category

PIMs

Palm III
Royal
Casio PV-100

PIM only

Generic computers

Notebook/
subnotebook

IBM
Toshiba
Many others
Rolodex
Day Timer

Other solutions to the

above

Paper-based solutions
Budget

Business items costing

$100-$1,000

Fax machines
Personal copiers
Cellular phones
Furniture (e.g.
Steelcase)
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Managerial Judgment of Competition

Markets

Product/Services
Same
Different

Same

Different

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Brand-Switching Matrix
Time t+1

Time t

.6

.2

.2

.2

.3

.4

.1

.2

.3

.5

.1

.1

.5

.3

.1

.4

.5

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Defining Competition with Brand Choice Data

All brands

National

Diet

Cola

Regional

Regular

Non-Cola

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Family
brand 1

Family
brand 2

Defining Competition with Perceptual Mapping

Moist

Needs refrigeration

As a formal dessert

Bakery cake
Homemade cake
Homemade pie
Layer cake mix
Takes a long
Cheese cake mix
time to prepare
Bundt cake mix
Frozen pie

Chocolate torte mix
Frozen cake
Boston crme pie mix
Stirn Frost cake mix
Light Style cake mix
Individual pie
Coffee cake mix
Quick bread mix
Snackin Cake mix

Pudding mix
Local mix
Jell-O
Dzer ta

Canned pudding

Hostess cupcakes

Date bar mix

Brownie mix
Homemade cookies
Cookie mix

Good for a coffee break

Bakery cookies
Pillsbury cookie dough
In my school work lunch

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Oatmeal cookies
Pepperidge Farm cookies
Between meal snack
Easy to carry with me

Custard mix
Tapioca pudding
mix

Methods Versus Competition Levels

and Information Required

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Enterprise Competition
in Financial Services

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