Market Structure and Competitor Analysis Performing a market analysis to identify your major competitors. Performing a competitor analysis. Alternative sources of information for analyzing competitors
Budget competition products and services that are purchased from the same general budget.
Customer Target Change Product form competition involves battling for exactly the same customers. Generic competition can destroy entire product categories when a major innovation occurs
Measurement Issues
Government documents provide valuable information about product form and category competitors. Consulting firms, trade associations, and professional publications may supply own product category data.
Cross-Elasticity of Demand
Indicator of substitutability. Percentage change in one products sales due to a percentage change in a marketing variable for another product. CrossCross-elasticity - price is positive, the two products are considered to be competitive.
Competitor Analysis
A determination of the competitors major objectives. An assessment of their marketing strategies. An assessment of their strengths and weaknesses. An internal analysis of your firms strengths and weaknesses relative to competitors
Competitor Strategies
Marketing managers must monitor: Segments pursued. Competitors targets. Product features. Core strategy. Supporting marketing mix.
Core Strategies
Studying their marketing communications. How are they differentiating themselves? What is their value proposition?
Secondary Sources
Internal sources. Annual reports. Patent and trademark filings. General business and trade publications. Consultants. Trade associations. Help wanted ads. Electronic data services.
Primary Sources
Sales force and customers. Employees. Suppliers. Reverse engineering or sampling. Competitors products. Plant tours. Internet newsgroups.
YOUR COMPETITION: Even though you may have done a great job in pinpointing and studying your market segment the job isn't done until you have considered your competition.
My main competitors in my market area are: Name of firm (list)
Chapter Objectives
1. To gain an appreciation of the need for performing competitive analysis. 2. To understand the five step approach to carrying out a competitive analysis. 3. To become acquainted with perceptual mapping and the techniques used. 4. To gain an appreciation and awareness of sources of competitive intelligence
We establish the product market boundaries of interest and identify any specific target segments.
perceptual mapping
Perceptual mapping methods are used to position the firm against competitors as seen by the consumer. Product positioning is used to determine the brands that consumers see as being similar.
perceptual mapping
Managers rely on some perceptual mapping techniques to portray how customers perceive the various market competitors. There are two types:
Multidimensional scaling relies on similarity judgments of consumers in determining the degree of similarity between pairs of products.
A factor analysis based approach relies on buyers assessment of determinant attributes to evaluate alternatives
perceptual mapping
NOW APPLY YOUR ADVENTURE WITH YOUR SUPERMARKET FROZEN FOODS EXCURSION.
Pioneering advantage
{HOYLE SCHWEITZER invented WINDSURFER(ing)}
is the market advantage that results from a competitor being the innovator in a market. Several
Pioneering advantage
1.Pioneer products act as "prototypes" for competitors. 2. Initial brands potentially build significant loyalty. 3. Late entrants will have difficulty obtaining awareness and trail by distributors and consumers.
If the future competitive structure of a market is to be understood, managers should attempt to determine the potential for technological discontinuity. Note- LPC WINDSURFER EXAMPLE
Steps of competitive analysis (continued)
Although the identity of current direct competitors is important, it is equally essential to identify future competitors, i.e., new entrants. Such asMISTRAL,BIC
Steps of competitive analysis (continued)
Barriers to entry make it difficult to become a significant competitor in a new market. PLEASE REFERENCE OUR HANDOUT ON INDUSTRY ATTRACTIVENESS in your packet
Steps of competitive analysis (continued)
Barriers to entry Economies of scale, initial financial investment, lack of access to sources of production, and limited access to distribution channels are some typical barriers to entry.
Steps of competitive analysis (continued)
Barriers to entry Tariffs, quotas, customs, and governmental intervention are some international entry barriers.
Steps of competitive analysis (continued)
New entrants can cause considerable competitive concern through improved price performance trade offs, by bringing new skills to the industry,or by virtue of cross subsidizations.
Steps of competitive analysis (continued)
The importance of assessing competitive intensity, step 4, is twofold: to determine the likely cost of meeting competition and to recognize the most important bases and types of competition.
Steps of competitive analysis (continued)
Several basic conditions which foster intense competition are: numerous competitors, slow industry growth, undifferentiated products and services, low switching costs, significant economies of scale, industry overcapacity, and management loyalty
Steps of competitive analysis (continued)
The ultimate purpose of performing a competitive analysis is to identify possible avenues for attaining a sustainable advantage over competitors so as to achieve product or product line objectives.
Steps of competitive analysis (continued)
2. Source advantages include: skills of people within the organization, the systems or arrangement developed for market response, and the organization's resources.
(continued)
3. Superior resources, intangible and tangible, can enable a firm to either underprice the competition or to offer better or unique performance.
(continued)
Sources for obtaining competitive intelligence fall into three basic categories: published material & documents, competitors' employees, suppliers, or customers; and direct observation.
Steps of competitive analysis (continued)
Competitive analysis-LPC@umsl.edu
Dont forget your handout packet: An exam question: We analyze a competitor on five The abilitiy to.. abilities..