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Importance of understanding competition in Marketing Planning


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Importance of understanding competition in Marketing Planning

  1. 1. Six steps of analysing competiton 1.Define Industry structure and characteristics 2. Identify strategic groups 6. Identify new competitors Market 5. Anticipate actions by competitors 3.Identify & describe key competitors 4. Evaluate key competitors
  2. 2.  Defining the competitive arena in the market  Competitor analysis begins by identifying the industry  In the industry there could be direct , indirect, actual and potential competitors
  3. 3.  Generic competition  products which are all different in type but are capable of satisfying the same basic want of the prospective purchaser, for example, the consumer may want to quench his thirst Anything that he would buy to quench his thirst would be a product in the generic category
  4. 4.  Brand competition  Competition occurs among the same product types that could satisfy the need of the consumer almost in the same manner.  Example: Consumer who wants to buy a soft drink will choose anything in that category
  5. 5.  Varient Competiton  Competition among the product variants are the products that can satisfy the need of the consumer when he opts to purchase a separate variant of the product  Eg. Consumer who opts to drink a soft drink to quench his thirst may select  A cola variant, Fruit Juice variant, Artificial Flavour variant of the soft drink category.
  6. 6. Geographic Competition  Any of the above competitors may be found in the geographic locations of the company may operate.  You need to do find specific information from the geographic locations to assess this category of competition.  This competition would differ from the overall / general competition
  7. 7. Industry structure and characteristics  Industry Form- Monopoly, Oligopoly, pure competition  Industry environment- Emerging, Fragmented, Transitional (mature), Declining, Global  ( somewhat related to PLC)  Competitive Forces- Brand rivalry, threat of new entrance, threat of substitutes, bargaining power of suppliers, bargaining power of buyers
  8. 8. Strategic Group Analysis  Strategic group is the set of firms in an industry that use common strategies in the competitive environment  It could be analysed on product specialization, brand image, distribution, technological, vertical and horizontal integration, cost advantage, price, financial status etc  Eg: Pesi ,Coke and Elephnat House . Mobitel ,Dailog and Etisalt, Nissan, Toyota and Ford  These groupings make competitor analysis more feasible and usable
  9. 9. Identifying, describing and evaluating competitors  Strategic Group analysis helps identify the key competitors in an industry  Key competitor is a firm that goes after the same target market that the company is going to play  It is very important to get more details as much as possible about the key competitors
  10. 10. • Evaluating key competitors • Current capabilities, extent of market coverage, customer satisfaction provided, past performances , their products, their pricing, positioning, distribution and promotional activities etc. • Now refer to the Marketing Plan Format you are using and find out the information that you should write.