Marketing strategy is a process that can allow an organization to concentrate its limited resources on the greatest opportunities to increase sales and achieve a sustainable competitive advantage.[1] Strategic planning involves an analysis of the company's strategic initial situation prior to the formulation, evaluation and selection of market-oriented competitive position that contributes to the company's goals and marketing objectives.[2] Strategic marketing, as a distinct field of study emerged in the 1970s and 80s, and built on strategic management, that focuses on strategies, that preceded it. Marketing strategy highlights the role of marketing as a link between the organization and its customers.

1. McGraw-Hill/Irwin Copyright © 2005 by The McGraw-Hill Companies, Inc. All rights reserved.
3
Defining the Competitive Set

2. 3-2
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

3. 3-3
Bases of Competition cont.
III. Resource-oriented
Raw materials
Employees
Financial resources
IV. Geographic

4. 3-4
Levels of Competition
Diet
lemon
limes
Baseball
cards
Fruit
flavore
d colas
Coffee
Diet
Coke
Diet
Pepsi
Diet-Rite
cola
Bottled
water
Lemon
limes
Regular
colas
Beers
Juices
Wine
Fast food
Tea
Video
rentals
Ice
cream
Product form
competition:
Diet colas
Product
category
competition:
Soft drinks
Generic
competition:
Beverages
Budget
competition:
Food and
entertainment

5. 3-5
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

6. 3-6
Energy Bar Competition
Odwalla
Power Bar
Balance Bar
Clif
Energy
Bars
Snack/Health
Bars
Healthy
Snacks
Other
Snacks
Nutrigrain Bars
Slimfast Bars
Granola Bars
Fruits
Nuts
Juice
Crackers
Chips
Candy

7. 3-7
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
Paper-based solutions
IBM
Toshiba
Many others
Rolodex
Day Timer
Other solutions to the
above
Budget Business items costing
$100-$1,000
Fax machines
Personal copiers
Cellular phones
Furniture (e.g.
Steelcase)

8. 3-8
Managerial Judgment of Competition
Markets Same Different
Product/Services
Same
Different
A
C
B
D

9. 3-9
Brand-Switching Matrix
Time t+1
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
Time t

10. 3-10
Defining Competition with Brand Choice Data
Regular
All brands
Regional
National
Diet
Family
brand 1
Family
brand 2
Cola Non-Cola

11. 3-11
Defining Competition with Perceptual Mapping
•Moist
•Needs refrigeration
•Tapioca
pudding mix
Local mix •
Pudding mix
Chocolate torte mix •
Dzer ta • •Jell-O
•Canned pudding
•Individual pie
•Hostess cupcakes
•Quick bread mix
Good for a coffee break •
As a formal dessert
•
Homemade cake •
Bakery cake
•
Homemade cookies
• Cheese cake mix
“Snackin’ Cake” mix •
• Frozen cake
• Layer cake mix
• “Stir’n Frost cake mix
Takes a long
time to prepare •
Bundt cake mix •
Custard mix
Boston crème pie mix
“Light Style” cake mix
Coffee cake mix •
Bakery cookies •
Pillsbury cookie dough •
Cookie mix •
•
•Easy to carry with me
In my school work lunch •
• Between meal snack
•Pepperidge Farm cookies
• Oatmeal cookies
• Frozen pie
• Homemade pie
Date bar mix •
Brownie mix •
••

12. 3-12
Methods Versus Competition Levels
and Information Required

13. 3-13
Enterprise Competition
in Financial Services