PRODUCT MANAGEMENTCHAPTER 4: Defining the competitive set

LEARNING OBJECTIVES:

After studying this chapter, you should be able to:

1. Understand what is a competitive set2. Identify the levels of market

competition3. Understand the methods of

determining competitors

CHAPTER OUTLINE

1. Overview of the competitive set2. Levels of market competition3. Methods of determining competitors

Bases of Competition

I. Customer-orientedWho they are – competition for same budgetWhen they use itWhy they use it- benefits sought

II. Marketing-oriented: advertising and promotion

Theme/copy strategyMediaDistributionPrice

Bases of Competition cont.

III. Resource-orientedRaw materialsEmployeesFinancial resources

IV. Geographic

Levels of Competitions

Def : The proximity of other products to the physical attributes of the product in question

In terms of product form, product category, generic competition and budget competition

Levels of Competition

Diet lemon limes

Baseball cards

Fruit flavored colas

Coffee

DietCoke

DietPepsi

Diet-Rite cola

Bottled water

Lemon limes

Regularcolas

Beers

Juices

Wine

Fast food

Tea

Video rentals

Icecream

Product form competition: Diet colas

Product category competition: Soft drinks

Generic competition: Beverages Budget

competition: Food and entertainment

Levels of Competition: Implications for Product Strategy

Budget

Generic

Product Category

Product Form

Competitive Level

Convince Customers that the Brand is Better than Others

Convince Customers that the Product Form is Best in the

Category

Convince Customers that the Product Category is the Best

Way to Satisfy Needs

Convince Customers that the Generic Benefits are the Most

Appropriate Way to Spend their Money

Product Management Task

Methods For Determining Competitors Managerial judgment Customer-based Measures

Managerial Judgment

Experience Salesperson call reports Distributors Other company sources

Managerial judgment

Markets Product/Services

Same Different

Same A B

Different C D

Customer-Based Measures

Behavioral data Customer Judgements

Behavioral Data

Time t + 1

Time t

A B C D E

A .6 .2 .2 0 0

B .2 .3 .4 .1 0

C .2 .3 .5 0 0

D 0 .1 .1 .5 .3

E .1 0 0 .4 .5

Customer Judgments

Judged overall similarity Similarity within consideration Product deletion Substitution in use