Kotler08exs dealing with the competition
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Transcript of Kotler08exs dealing with the competition
To accompany A Framework for Marketing Management, 2nd Edition Slide 1 in Chapter 8©2003 Prentice Hall, Inc.
Chapter 8Chapter 8
Dealing with the Dealing with the CompetitionCompetition
PowerPoint by Karen E. JamesPowerPoint by Karen E. JamesLouisiana State University - ShreveportLouisiana State University - Shreveport
To accompany A Framework for Marketing Management, 2nd Edition Slide 2 in Chapter 8©2003 Prentice Hall, Inc.
ObjectivesObjectives
Understand how a company identifies its primary competitors and ascertains their strategies.
Review how companies design competitive intelligence systems.
To accompany A Framework for Marketing Management, 2nd Edition Slide 3 in Chapter 8©2003 Prentice Hall, Inc.
ObjectivesObjectives
Learn how a company decides whether to position itself as a market leader, a challenger, a follower, or a nicher.
Identify how a company can balance a customer vs. competitor orientation.
To accompany A Framework for Marketing Management, 2nd Edition Slide 4 in Chapter 8©2003 Prentice Hall, Inc.
Competitive MarketsCompetitive Markets
Porter’s Five Forces that Determine Market Attractiveness:
– Threat of intense segment rivalry– Threat of new entrants– Threat of substitute products– Threat of buyers’ growing bargaining
power– Threat of suppliers’ growing bargaining
power
To accompany A Framework for Marketing Management, 2nd Edition Slide 5 in Chapter 8©2003 Prentice Hall, Inc.
Competitive MarketsCompetitive Markets
Failing to identify competitors can lead to extinction
Internet businesses have led to disintermediation of middlemen
Competition can be identified using the industry or market approach
To accompany A Framework for Marketing Management, 2nd Edition Slide 6 in Chapter 8©2003 Prentice Hall, Inc.
Competitive MarketsCompetitive Markets
Number of sellers and degree of differentiation
Cost structure
Entry, mobility and exit barriers
Degree of vertical integration
Degree of globalization
Industries Can Be Classified By:
To accompany A Framework for Marketing Management, 2nd Edition Slide 7 in Chapter 8©2003 Prentice Hall, Inc.
Competitive MarketsCompetitive Markets
Industry Structures
Pure Monopoly
Pure Oligopoly
Differentiated Oligopoly
Monopolistic Competition
Pure Competition
Only one firm offers an undifferentiated product or service in an area
– Unregulated– Regulated
Example: Most utility companies
To accompany A Framework for Marketing Management, 2nd Edition Slide 8 in Chapter 8©2003 Prentice Hall, Inc.
Competitive MarketsCompetitive Markets
Industry Structures
Pure Monopoly
Pure Oligopoly
Differentiated Oligopoly
Monopolistic Competition
Pure Competition
A few firms produce essentially identical commodities and little differentiation exists
Lower costs are the key to higher profits
Example: oil
To accompany A Framework for Marketing Management, 2nd Edition Slide 9 in Chapter 8©2003 Prentice Hall, Inc.
Competitive MarketsCompetitive Markets
Industry Structures
Pure Monopoly
Pure Oligopoly
Differentiated Oligopoly
Monopolistic Competition
Pure Competition
A few firms produce partially differentiated items
Differentiation is by key attributes
Premium price may be charged
Example: Luxury autos
To accompany A Framework for Marketing Management, 2nd Edition Slide 10 in Chapter 8©2003 Prentice Hall, Inc.
Competitive MarketsCompetitive Markets
Industry Structures
Pure Monopoly
Pure Oligopoly
Differentiated Oligopoly
Monopolistic Competition
Pure Competition
Many firms differentiate items in whole or part
Appropriate market segmentation is key to success
Example: beer, restaurants
To accompany A Framework for Marketing Management, 2nd Edition Slide 11 in Chapter 8©2003 Prentice Hall, Inc.
Competitive MarketsCompetitive Markets
Industry Structures
Pure Monopoly
Pure Oligopoly
Differentiated Oligopoly
Monopolistic Competition
Pure Competition
Many competitors offer the same product
Price is the same due to lack of differentiation
Example: farmers selling milk, crops
To accompany A Framework for Marketing Management, 2nd Edition Slide 12 in Chapter 8©2003 Prentice Hall, Inc.
Competitive MarketsCompetitive Markets
A broader group of competitors will be identified using the market approach
Competitor maps plot buying steps in purchasing and using the product, as well as direct and indirect competitors
To accompany A Framework for Marketing Management, 2nd Edition Slide 13 in Chapter 8©2003 Prentice Hall, Inc.
Competitor AnalysisCompetitor Analysis
Key characteristics of the competition must be identified:
– Strategies– Objectives– Strengths and Weaknesses
Effect a firm’s competitive position in the target market
– Reaction Patterns
To accompany A Framework for Marketing Management, 2nd Edition Slide 14 in Chapter 8©2003 Prentice Hall, Inc.
Competitor AnalysisCompetitor Analysis
Dominant
Strong
Favorable
Tenable
Weak
Nonviable
Competitive Positions in the Target Market
To accompany A Framework for Marketing Management, 2nd Edition Slide 15 in Chapter 8©2003 Prentice Hall, Inc.
Competitive Intelligence Competitive Intelligence SystemsSystems
Designing the system involves:
– Setting up the system
– Collecting the data
– Evaluating and analyzing the data
– Disseminating information and responding to queries
To accompany A Framework for Marketing Management, 2nd Edition Slide 16 in Chapter 8©2003 Prentice Hall, Inc.
Competitive Intelligence Competitive Intelligence SystemsSystems
Value analysis helps firms to select competitors to attack and to avoid
– Customers identify and rate attributes important in the purchase decision for the company and competition
Attacking strong, close, and bad competitors will be most beneficial
To accompany A Framework for Marketing Management, 2nd Edition Slide 17 in Chapter 8©2003 Prentice Hall, Inc.
Designing Competitive Designing Competitive StrategiesStrategies
Major Strategies
Market-Leader
Market-Challenger
Market-Follower
Market-Nicher
Expanding the total market
Defending market share
Expanding market share
To accompany A Framework for Marketing Management, 2nd Edition Slide 18 in Chapter 8©2003 Prentice Hall, Inc.
Designing Competitive Designing Competitive StrategiesStrategies
Expanding the Total Market:
– Targeting Product to New UsersMarket-penetration strategyNew-market strategyGeographical-expansion strategy
– Promoting New Uses of Product
– Encouraging Greater Product Use
To accompany A Framework for Marketing Management, 2nd Edition Slide 19 in Chapter 8©2003 Prentice Hall, Inc.
Designing Competitive Designing Competitive StrategiesStrategies
Position defense
Flank defense
Preemptive defense
Counteroffensive defense
Mobile defense
Contraction defense
Defending Market Share
To accompany A Framework for Marketing Management, 2nd Edition Slide 20 in Chapter 8©2003 Prentice Hall, Inc.
Designing Competitive Designing Competitive StrategiesStrategies
Before Attempting to Expand Market Share, Consider:
– Probability of invoking antitrust action
– Economic costs involved
– Likelihood that marketing mix decisions will increase profits
To accompany A Framework for Marketing Management, 2nd Edition Slide 21 in Chapter 8©2003 Prentice Hall, Inc.
Designing Competitive Designing Competitive StrategiesStrategies
Major Strategies
Market-Leader
Market-Challenger
Market-Follower
Market-Nicher
First define the strategic goals and opponent(s)
Choose general attack strategy
Choose specific attack strategy
To accompany A Framework for Marketing Management, 2nd Edition Slide 22 in Chapter 8©2003 Prentice Hall, Inc.
Designing Competitive Designing Competitive StrategiesStrategies
General Attack Strategies:
– Frontal attacks match competition
– Flank attacks serve unmet market needs or underserved areas
– Encirclement “blitzes” opponent
– Bypassing opponent and attacking easier markets is also an option
To accompany A Framework for Marketing Management, 2nd Edition Slide 23 in Chapter 8©2003 Prentice Hall, Inc.
Competitive MarketsCompetitive Markets
Price-discount
Lower-price goods
Prestige goods
Improved services
Product proliferation
Product innovation
Distribution innovation
Manufacturing cost reduction
Intensive advertising promotion
Specific Attack Strategies Include:
To accompany A Framework for Marketing Management, 2nd Edition Slide 24 in Chapter 8©2003 Prentice Hall, Inc.
Designing Competitive Designing Competitive StrategiesStrategies
Major Strategies
Market-Leader
Market-Challenger
Market-Follower
Market-Nicher
Imitation may be more profitable than innovation
Four broad strategies:– Counterfeiter– Cloner– Imitator– Adapter
To accompany A Framework for Marketing Management, 2nd Edition Slide 25 in Chapter 8©2003 Prentice Hall, Inc.
Designing Competitive Designing Competitive StrategiesStrategies
Major Strategies
Market-Leader
Market-Challenger
Market-Follower
Market-Nicher
Niche specialties:– End-user– Vertical-level– Customer-size– Specific customer– Geographic– Product/product line– Product feature– Job-shop– Quality-price– Service– Channel
To accompany A Framework for Marketing Management, 2nd Edition Slide 26 in Chapter 8©2003 Prentice Hall, Inc.
Balancing Customer and Balancing Customer and Competitor OrientationsCompetitor Orientations
Competitor-centered companies evaluate what competitors are doing, then formulate competitive reactions
Customer-centered companies focus on customer developments when formulating strategy