This document provides guidance on analyzing competitors. It discusses the objectives of competitor analysis as understanding competitors' strengths/weaknesses and likely strategies/responses. Key aspects covered include:
1. Identifying direct competitors in the same product/customer markets using substitution-in-use analysis and purchase data.
2. Also identifying indirect competitors serving similar customer needs through different resources, and potential competitors with the capabilities to enter the market.
3. Gathering information on competitors' strategies, costs, resources to assess vulnerabilities and predict actions/responses to strategic moves.
The document provides a framework for systematically analyzing competitors at different levels to inform strategic decision making.
The document discusses the importance of environmental analysis for strategic planning. It describes various tools and methods for analyzing a firm's external environment, including scanning, monitoring, competitive intelligence, and forecasting. These allow a firm to understand factors in the general environment like demographics, technology and the economy. The competitive environment is also important and can be analyzed using Porter's five forces model and strategic groups to understand industry competition and identify opportunities and threats.
Antibiotice S.A. in Iasi, Romania has achieved a competitive advantage in the global generic drugs market by dominating a specific "slice" or segment. It is currently the top manufacturer of the generic antifungal drug Nystatin worldwide. Through quality certifications and expanding exports to 73 countries, the company has grown its market share and profits despite challenges in the Romanian pharmaceutical industry. Antibiotice S.A. provides an example of how focusing on competitive differentiation in a niche product can lead to success against larger multinational competitors.
This document discusses Porter's five forces framework for analyzing industry competition and profitability. It explains the five competitive forces - competitive rivalry, threat of new entry, bargaining power of suppliers, bargaining power of buyers, and threat of substitutes. It provides examples of how these forces impact industry profitability. Strategies are presented for differentiating products to minimize competitive forces, including using perceptual maps to identify brand positioning opportunities.
This document discusses industry and competitor analysis for new ventures. It defines industry analysis as research focusing on an industry's potential. Industry analysis is important for determining if a niche identified during feasibility analysis is favorable. When studying an industry, entrepreneurs must answer questions about accessibility, favorable industry positions, and underserved markets. Both firm-specific and industry factors affect performance. Techniques for assessing industry attractiveness include studying trends and using Porter's five forces model. A competitor analysis involves understanding competitors' strategies. Sources of competitive intelligence and competitive analysis grids are discussed.
The document provides frameworks for analyzing companies and industries, including the Five C's for examining a company, SWOT analysis, Porter's Five Forces, and issue trees. It discusses considering trends beyond the industry level in macroeconomics, politics, consumer trends, and technology. Profitability is analyzed using equations for expected profit that include price, volume, revenues, costs, and cost of capital. An example issue tree is provided to disaggregate the problem of declining profits for a rug retailer.
This document provides an overview of key concepts in industrial marketing and business-to-business marketing. It discusses the definition of industrial marketing, the marketing concept, market orientation, marketing mix, external environment, differences between business-to-business and business-to-consumer marketing, and key aspects of selling to organizations.
The document provides a summary of a marketing requirements document (MRD) for a product called "Babylon-6" that enables teleportation. The MRD outlines key requirements such as addressing the emerging need for teleportation, improving diagnostics through telepathy, and boosting networking performance. It describes target customer categories including current customers, mergers and acquisitions firms, and plastics manufacturers. The MRD also covers the product's business model, affected groups within the company, a bill of materials, internally and externally committed requirements, desirable future requirements, and features not being implemented.
This document discusses channel conflicts that can arise in distribution networks. It defines channel conflict as any dispute between channel partners that negatively impacts one's business goals. Conflicts can be vertical between levels, horizontal between same-level partners, or multi-channel between different distribution methods. Common causes are incompatible goals, unclear roles, and poor communication. Managing conflicts requires approaches like mediation, restructuring relationships, modifying goals, improving communication, and staff exchanges between partners to realign incentives and prevent future disputes. The example provided is of Samsung facing a multi-channel conflict in India between offline and online retailers undermining each other.
The document discusses the importance of environmental analysis for strategic planning. It describes various tools and methods for analyzing a firm's external environment, including scanning, monitoring, competitive intelligence, and forecasting. These allow a firm to understand factors in the general environment like demographics, technology and the economy. The competitive environment is also important and can be analyzed using Porter's five forces model and strategic groups to understand industry competition and identify opportunities and threats.
Antibiotice S.A. in Iasi, Romania has achieved a competitive advantage in the global generic drugs market by dominating a specific "slice" or segment. It is currently the top manufacturer of the generic antifungal drug Nystatin worldwide. Through quality certifications and expanding exports to 73 countries, the company has grown its market share and profits despite challenges in the Romanian pharmaceutical industry. Antibiotice S.A. provides an example of how focusing on competitive differentiation in a niche product can lead to success against larger multinational competitors.
This document discusses Porter's five forces framework for analyzing industry competition and profitability. It explains the five competitive forces - competitive rivalry, threat of new entry, bargaining power of suppliers, bargaining power of buyers, and threat of substitutes. It provides examples of how these forces impact industry profitability. Strategies are presented for differentiating products to minimize competitive forces, including using perceptual maps to identify brand positioning opportunities.
This document discusses industry and competitor analysis for new ventures. It defines industry analysis as research focusing on an industry's potential. Industry analysis is important for determining if a niche identified during feasibility analysis is favorable. When studying an industry, entrepreneurs must answer questions about accessibility, favorable industry positions, and underserved markets. Both firm-specific and industry factors affect performance. Techniques for assessing industry attractiveness include studying trends and using Porter's five forces model. A competitor analysis involves understanding competitors' strategies. Sources of competitive intelligence and competitive analysis grids are discussed.
The document provides frameworks for analyzing companies and industries, including the Five C's for examining a company, SWOT analysis, Porter's Five Forces, and issue trees. It discusses considering trends beyond the industry level in macroeconomics, politics, consumer trends, and technology. Profitability is analyzed using equations for expected profit that include price, volume, revenues, costs, and cost of capital. An example issue tree is provided to disaggregate the problem of declining profits for a rug retailer.
This document provides an overview of key concepts in industrial marketing and business-to-business marketing. It discusses the definition of industrial marketing, the marketing concept, market orientation, marketing mix, external environment, differences between business-to-business and business-to-consumer marketing, and key aspects of selling to organizations.
The document provides a summary of a marketing requirements document (MRD) for a product called "Babylon-6" that enables teleportation. The MRD outlines key requirements such as addressing the emerging need for teleportation, improving diagnostics through telepathy, and boosting networking performance. It describes target customer categories including current customers, mergers and acquisitions firms, and plastics manufacturers. The MRD also covers the product's business model, affected groups within the company, a bill of materials, internally and externally committed requirements, desirable future requirements, and features not being implemented.
This document discusses channel conflicts that can arise in distribution networks. It defines channel conflict as any dispute between channel partners that negatively impacts one's business goals. Conflicts can be vertical between levels, horizontal between same-level partners, or multi-channel between different distribution methods. Common causes are incompatible goals, unclear roles, and poor communication. Managing conflicts requires approaches like mediation, restructuring relationships, modifying goals, improving communication, and staff exchanges between partners to realign incentives and prevent future disputes. The example provided is of Samsung facing a multi-channel conflict in India between offline and online retailers undermining each other.
This document outlines the key steps and considerations for conducting a thorough situation analysis to inform strategic decision making. It involves analyzing the external industry environment through identifying dominant economic traits, competitive forces, drivers of change, and key success factors. It also involves assessing the competitive positions of rivals and predicting their likely moves. The overall goal is to evaluate the attractiveness of the industry and identify opportunities and threats to frame a company's strategic options.
The document analyzes the casual dining industry. It finds the industry is currently not attractive due to rising costs and economic challenges. There are low barriers to entry for new competitors. Both suppliers and buyers have high power in the industry. Rivalry is intense as many new restaurants continually enter the market. Opportunities exist through new concepts, but threats include increasing costs and competition. The document recommends casual dining restaurants expand offerings, explore international markets, and increase take-out options.
Marketing Channels and Supply Chain Managementmandalina landy
The document discusses marketing channels and supply chain management. It defines key terms like marketing channels, intermediaries, and supply chain. It describes channel structures for consumer and business products. It discusses the functions of intermediaries and issues that influence channel strategy decisions. It also covers managing relationships, logistical components of supply chains, and new technologies and trends in supply chain management.
This document provides an overview of business marketing. It begins by defining business marketing as the marketing of products and services to business organizations, as opposed to consumer marketing which is the marketing of products and services to individuals. It then discusses the nature of business markets, identifying the main components as commercial markets, trade industries, government, and public and private institutions. The document also differentiates between business-to-business (B2B) and business-to-consumer (B2C) markets using Dell as an example. Finally, it briefly discusses differences that may exist in foreign business markets.
This document provides an overview of industrial magazines. It discusses that industrial magazines are targeted publications that provide industry-specific information to help consumers compare their needs to developments in that industry. They typically publish on a weekly, monthly, or quarterly basis. Content includes editorials, product reviews and comparisons, industry news, profiles of key figures, and advertisements. Industrial magazines benefit companies by promoting industries and providing an additional marketing channel. They help readers understand consumer behavior, identify gaps, and plan actions to address challenges and market changes. Overall, industrial magazines are an important information source for business-to-business markets.
This document provides an overview of identifying market segment, target, and position strategies. It begins by outlining the learning objectives, which are to understand market segmentation bases, the segmentation process, target market evaluation and selection, positioning strategies, and practices in Nepal. Several key aspects of segmentation are then defined and explained, including the concept, requirements, bases for consumer and industrial segmentation, the segmentation process, target market evaluation, selection, and developing positioning strategies. Specific variables, types, and the process are outlined for each topic.
Organizational buying involves groups within a company deciding together on purchases for goods and services. This process considers needs, available alternatives, and influences within the buying center. It typically progresses through stages from problem recognition to performance review. Business marketers must understand these buying groups, centers, situations and stages to effectively target their marketing.
Does Current Advertising Cause Future Sales?Trieu Nguyen
findings from a large-scale field experiment that allows us to study whether
there is a causal relationship between current advertising and future sales. The
experimental design overcomes limitations that have affected previous investigations of
this issue. We find that current advertising does affect future sales but the sign of the
effect varies depending on the customers targeted. For the firm’s best customers the
long-run effect of increases in current advertising is actually negative, while for other
customers the effect is positive. We argue that these outcomes reflect two competing
effects: brand-switching and inter-temporal substitution. Furthermore, our data suggest a way to distinguish between the informative and persuasive roles of advertising, providing insight into the mechanism by which advertising differentially affects various customer subsets
This complete deck is oriented to make sure you do not lag in your presentations. Our creatively crafted slides come with apt research and planning. This exclusive deck with thirty three slides is here to help you to strategize, plan, analyse, or segment the topic with clear understanding and apprehension. Utilize ready to use presentation slides on Industrial Marketing PowerPoint Presentation Slides with all sorts of editable templates, charts and graphs, overviews, analysis templates. It is usable for marking important decisions and covering critical issues. Display and present all possible kinds of underlying nuances, progress factors for an all inclusive presentation for the teams. This presentation deck can be used by all professionals, managers, individuals, internal external teams involved in any company organization. http://bit.ly/2OAoH6e
The document discusses market analysis and marketing management. It provides information on dimensions to consider in a market analysis including submarkets, size, growth, profitability, costs, distribution systems, and trends. It discusses how to structure a market analysis through asking questions about these dimensions. It also discusses emerging submarkets, the customer decision process, and risks of high-growth markets.
This document discusses competitor analysis and provides guidance on analyzing competitors. It outlines four key stages: collecting information on competitors, converting information to intelligence, analyzing and interpreting the intelligence, and countering competitor actions. Various marketing strategies are discussed that can be used to minimize losses to competitors and gain market share, drawing parallels between business competition and military warfare strategies. The importance of ongoing competitor monitoring is emphasized to stay aware of their strengths, weaknesses, and potential moves.
The document discusses analyzing a company's external environment. It covers:
1. Diagnosing a company's situation involves assessing external/macro factors like general economic conditions and internal/micro factors like market position.
2. The macroenvironment includes societal, technological, political/legal, and cultural forces that influence a company. Important variables to analyze include economic, technological, political, and socio-cultural trends.
3. Understanding driving forces of change like globalization, innovation, and regulations is important to assess their impact on industry and competitive conditions.
The document discusses an MKT 421 final exam containing 15 multiple choice questions. The exam covers various topics in marketing such as the marketing concept, international marketing, marketing mix, and global business environments. It provides answers to assess understanding of fundamental marketing principles and strategies relevant for international business operations.
This document provides an overview of analyzing a company's external environment from a strategic perspective. It discusses the key components of situational analysis including the macroenvironment and microenvironment. It outlines seven questions to consider when analyzing an industry's competitive environment, including the dominant economic traits, competitive forces, drivers of change, success factors, and attractiveness. Several models are presented for assessing the five competitive forces of rivalry, potential entry, substitutes, supplier power, and buyer power. Factors that influence the strength of each competitive force are also discussed.
This document discusses evaluating a company's external environment. It covers:
1. The five forces model of competition - analyzing rivalry, threat of new entrants, substitute products, supplier power, and buyer power. Key factors that influence each force are identified.
2. Common drivers of industry change such as growth rates, technology, regulations. Their impact on industry attractiveness must be assessed.
3. Key success factors - the strategic elements, attributes, resources necessary for competitive success in an industry.
4. Strategic groups - clusters of rivals with similar competitive approaches and positions. Strategic group maps can assess competitors' market positions.
This document summarizes key points about industrial market segmentation. It discusses segmentation variables that can be applied, including measurability, substantiality, and operational relevance to marketing strategy. It also describes a two-stage model of macro-segmentation based on factors like company size and geographic location, followed by micro-segmentation. However, it notes some challenges in applying theoretical segmentation models in practice.
Module 3 - BackgroundPRINCIPLES OF MARKETINGAll readings are r.docxroushhsiu
Module 3 - Background
PRINCIPLES OF MARKETING
All readings are required unless noted as “Optional” or “Not Required.”
Introduction
In practice, Marketers use various models to describe the different marketing functions. Some of the more popular models are the 7 step model, STP (segmentation, targeting, positioning), or the 4 C's (Consumer Behavior, Company Analysis, Competitor Analysis, and Context). Each has advantages and drawbacks regarding comprehensiveness. Readings describing each of these models are provided in the Optional Reading list at the end of this section. For this module, however, we will use a model that integrates and abridges these other models.
Consumers, Markets, and Competition
Though many people think of marketing as consisting of sales and advertising, one of the most important marketing functions begins even before the final product or service has been developed. In this early stage, the organization conducts research to determine customer needs, how the market is structured, and the number and nature of competitors addressing that need. As you will see below, these three topics are intertwined.
Consumers
The purpose of marketing is to discover how to provide value to consumers while earning a profit. Marketers must understand the entire consumer base: the customer served by the organization, the customer currently served by competitors, and customers who may be served in the future. One way marketers do this is by analyzing buyer behavior (i.e., how consumers get information and how consumers make buying decisions). Consumer behaviors are influenced by a number of considerations such as psychological factors, convenience, competing choices, and cultural preferences. Read the following book chapter on consumer behavior.
Tanner, J., and Raymond, M. (2012). Marketing Principles (v. 2.0). Ch. 3: Consumer behavior: How people make buying decisions. Sections 3.1-3.6. Retrieved from https://2012books.lardbucket.org/pdfs/marketing-principles-v2.0.pdf
Markets
Any business needs to know the characteristics of the markets in which the firm operates. Understanding the customer and the market requires extensive and sophisticated research efforts to gather and analyze social and economic trends, human decision-making, and potential competitors. The goal of market research is to enable the firm to identify opportunities and threats in the business environment as well as the organization’s capacity to exploit its strengths and shore up its weaknesses.
Market research can be either primary (collected directly from the source), or secondary (collected/published by someone outside the organization). Some examples of secondary data include:
· US Census
· www.Data,gov
· Internal data (such as customer cards at grocery stores that collect data on buying patterns)
· Nielsen or Arbitron ratings
· Published articles and reports
· Blog posts
· Social media
The following chart illustrates the differences between primary and secondary market re ...
S3 - Customers, Segmentation, and Target Marketing.pdfJMHemachandra
This document discusses market segmentation and target marketing. It defines market segmentation as dividing the total market into relatively homogeneous segments based on characteristics like demographics, needs, preferences, etc. Traditional approaches include mass marketing, differentiated marketing, market concentration, and niche marketing. More advanced approaches involve individualized segmentation using one-to-one marketing, mass customization, and permission marketing enabled by new technologies. Successful segmentation requires segments to be identifiable, substantial, accessible, responsive, and viable/sustainable. Identifying target segments involves selecting relevant variables and may require shifting targets based on marketing strategy changes.
Running Head Competitive Analysis of the Organization .docxMARRY7
Running Head: Competitive Analysis of the Organization 6
Competitive analysis of the organization
It is important for any organization to thrive and succeed in their business markets. It is also vital for these particular firms to develop the need to analyze their competitor’s needs and strategies. Understanding competitor analysis however is important in ascertaining marketing planning strategies and processes. Strong competitors perhaps can hinder best performances of the firm and its general success, and at an advanced stages, it can lead to total failures. Competitive analysis however enables firms to anticipate their close competitor’s actions and that can enable the organization to exploit competitor’s weaknesses. The strategy also enables firms to identify their most unique selling points. The identification of the selling points however can be strengthened trough marketing campaigns. Competitive analysis however enables and aids successful competitors to continuously develop their best marketing strategies in acute response to the changes in the market place.
Based on porter’s five competitive forces, these strategies were developed basically as a framework for assessing and evaluating the business competitive strength and the firm’s business position. This strategy believes in the notion that five forces exist that determines the competitiveness and attractiveness of the market. It also identifies greatly where power lies in a business situation. Porter’s specifications are therefore important in realizing the strengths of the organization current competitive position, and it also predicts the organizational strength in the future. The forces however can be used by strategic analysts at advanced stages to realize if new products or services that prevail in the business environment are potentially profitable.
They can also use it to ascertain the areas that posses more strength, this will help in improving weaknesses and helps to avoid mistakes.
Porters five forces of competitive positions
Supplier power is the certainty of how suppliers make it easy to drive and raise prices. Normally, supplier power is driven by the number of suppliers for each particular input, the available of their products and services, the strengths supplier posses and the relative cost of switching from one particular supplier to the other. Suppliers posses power when: there are very few suppliers of a particular product, when substitute don’t exist, when the product is extremely important to the potential buyer who cannot do without it and also the degree of differentiation of inputs
Buyer power.Buyer’s posses the potential of lowering prices. This is normally ascertained by the number of buyers existing in the market. It is also related to the individual buyer to the organization. Cost of ...
The document discusses key concepts for analyzing markets and competitive spaces including:
1) Defining product-market boundaries and structures and identifying/describing end-users and how they make purchasing decisions.
2) Analyzing industry characteristics, competitors, and competitive forces within an industry.
3) Developing a strategic vision about how markets may change in the future given trends like blurring industry boundaries and evolving competitive landscapes.
This document outlines the key steps and considerations for conducting a thorough situation analysis to inform strategic decision making. It involves analyzing the external industry environment through identifying dominant economic traits, competitive forces, drivers of change, and key success factors. It also involves assessing the competitive positions of rivals and predicting their likely moves. The overall goal is to evaluate the attractiveness of the industry and identify opportunities and threats to frame a company's strategic options.
The document analyzes the casual dining industry. It finds the industry is currently not attractive due to rising costs and economic challenges. There are low barriers to entry for new competitors. Both suppliers and buyers have high power in the industry. Rivalry is intense as many new restaurants continually enter the market. Opportunities exist through new concepts, but threats include increasing costs and competition. The document recommends casual dining restaurants expand offerings, explore international markets, and increase take-out options.
Marketing Channels and Supply Chain Managementmandalina landy
The document discusses marketing channels and supply chain management. It defines key terms like marketing channels, intermediaries, and supply chain. It describes channel structures for consumer and business products. It discusses the functions of intermediaries and issues that influence channel strategy decisions. It also covers managing relationships, logistical components of supply chains, and new technologies and trends in supply chain management.
This document provides an overview of business marketing. It begins by defining business marketing as the marketing of products and services to business organizations, as opposed to consumer marketing which is the marketing of products and services to individuals. It then discusses the nature of business markets, identifying the main components as commercial markets, trade industries, government, and public and private institutions. The document also differentiates between business-to-business (B2B) and business-to-consumer (B2C) markets using Dell as an example. Finally, it briefly discusses differences that may exist in foreign business markets.
This document provides an overview of industrial magazines. It discusses that industrial magazines are targeted publications that provide industry-specific information to help consumers compare their needs to developments in that industry. They typically publish on a weekly, monthly, or quarterly basis. Content includes editorials, product reviews and comparisons, industry news, profiles of key figures, and advertisements. Industrial magazines benefit companies by promoting industries and providing an additional marketing channel. They help readers understand consumer behavior, identify gaps, and plan actions to address challenges and market changes. Overall, industrial magazines are an important information source for business-to-business markets.
This document provides an overview of identifying market segment, target, and position strategies. It begins by outlining the learning objectives, which are to understand market segmentation bases, the segmentation process, target market evaluation and selection, positioning strategies, and practices in Nepal. Several key aspects of segmentation are then defined and explained, including the concept, requirements, bases for consumer and industrial segmentation, the segmentation process, target market evaluation, selection, and developing positioning strategies. Specific variables, types, and the process are outlined for each topic.
Organizational buying involves groups within a company deciding together on purchases for goods and services. This process considers needs, available alternatives, and influences within the buying center. It typically progresses through stages from problem recognition to performance review. Business marketers must understand these buying groups, centers, situations and stages to effectively target their marketing.
Does Current Advertising Cause Future Sales?Trieu Nguyen
findings from a large-scale field experiment that allows us to study whether
there is a causal relationship between current advertising and future sales. The
experimental design overcomes limitations that have affected previous investigations of
this issue. We find that current advertising does affect future sales but the sign of the
effect varies depending on the customers targeted. For the firm’s best customers the
long-run effect of increases in current advertising is actually negative, while for other
customers the effect is positive. We argue that these outcomes reflect two competing
effects: brand-switching and inter-temporal substitution. Furthermore, our data suggest a way to distinguish between the informative and persuasive roles of advertising, providing insight into the mechanism by which advertising differentially affects various customer subsets
This complete deck is oriented to make sure you do not lag in your presentations. Our creatively crafted slides come with apt research and planning. This exclusive deck with thirty three slides is here to help you to strategize, plan, analyse, or segment the topic with clear understanding and apprehension. Utilize ready to use presentation slides on Industrial Marketing PowerPoint Presentation Slides with all sorts of editable templates, charts and graphs, overviews, analysis templates. It is usable for marking important decisions and covering critical issues. Display and present all possible kinds of underlying nuances, progress factors for an all inclusive presentation for the teams. This presentation deck can be used by all professionals, managers, individuals, internal external teams involved in any company organization. http://bit.ly/2OAoH6e
The document discusses market analysis and marketing management. It provides information on dimensions to consider in a market analysis including submarkets, size, growth, profitability, costs, distribution systems, and trends. It discusses how to structure a market analysis through asking questions about these dimensions. It also discusses emerging submarkets, the customer decision process, and risks of high-growth markets.
This document discusses competitor analysis and provides guidance on analyzing competitors. It outlines four key stages: collecting information on competitors, converting information to intelligence, analyzing and interpreting the intelligence, and countering competitor actions. Various marketing strategies are discussed that can be used to minimize losses to competitors and gain market share, drawing parallels between business competition and military warfare strategies. The importance of ongoing competitor monitoring is emphasized to stay aware of their strengths, weaknesses, and potential moves.
The document discusses analyzing a company's external environment. It covers:
1. Diagnosing a company's situation involves assessing external/macro factors like general economic conditions and internal/micro factors like market position.
2. The macroenvironment includes societal, technological, political/legal, and cultural forces that influence a company. Important variables to analyze include economic, technological, political, and socio-cultural trends.
3. Understanding driving forces of change like globalization, innovation, and regulations is important to assess their impact on industry and competitive conditions.
The document discusses an MKT 421 final exam containing 15 multiple choice questions. The exam covers various topics in marketing such as the marketing concept, international marketing, marketing mix, and global business environments. It provides answers to assess understanding of fundamental marketing principles and strategies relevant for international business operations.
This document provides an overview of analyzing a company's external environment from a strategic perspective. It discusses the key components of situational analysis including the macroenvironment and microenvironment. It outlines seven questions to consider when analyzing an industry's competitive environment, including the dominant economic traits, competitive forces, drivers of change, success factors, and attractiveness. Several models are presented for assessing the five competitive forces of rivalry, potential entry, substitutes, supplier power, and buyer power. Factors that influence the strength of each competitive force are also discussed.
This document discusses evaluating a company's external environment. It covers:
1. The five forces model of competition - analyzing rivalry, threat of new entrants, substitute products, supplier power, and buyer power. Key factors that influence each force are identified.
2. Common drivers of industry change such as growth rates, technology, regulations. Their impact on industry attractiveness must be assessed.
3. Key success factors - the strategic elements, attributes, resources necessary for competitive success in an industry.
4. Strategic groups - clusters of rivals with similar competitive approaches and positions. Strategic group maps can assess competitors' market positions.
This document summarizes key points about industrial market segmentation. It discusses segmentation variables that can be applied, including measurability, substantiality, and operational relevance to marketing strategy. It also describes a two-stage model of macro-segmentation based on factors like company size and geographic location, followed by micro-segmentation. However, it notes some challenges in applying theoretical segmentation models in practice.
Module 3 - BackgroundPRINCIPLES OF MARKETINGAll readings are r.docxroushhsiu
Module 3 - Background
PRINCIPLES OF MARKETING
All readings are required unless noted as “Optional” or “Not Required.”
Introduction
In practice, Marketers use various models to describe the different marketing functions. Some of the more popular models are the 7 step model, STP (segmentation, targeting, positioning), or the 4 C's (Consumer Behavior, Company Analysis, Competitor Analysis, and Context). Each has advantages and drawbacks regarding comprehensiveness. Readings describing each of these models are provided in the Optional Reading list at the end of this section. For this module, however, we will use a model that integrates and abridges these other models.
Consumers, Markets, and Competition
Though many people think of marketing as consisting of sales and advertising, one of the most important marketing functions begins even before the final product or service has been developed. In this early stage, the organization conducts research to determine customer needs, how the market is structured, and the number and nature of competitors addressing that need. As you will see below, these three topics are intertwined.
Consumers
The purpose of marketing is to discover how to provide value to consumers while earning a profit. Marketers must understand the entire consumer base: the customer served by the organization, the customer currently served by competitors, and customers who may be served in the future. One way marketers do this is by analyzing buyer behavior (i.e., how consumers get information and how consumers make buying decisions). Consumer behaviors are influenced by a number of considerations such as psychological factors, convenience, competing choices, and cultural preferences. Read the following book chapter on consumer behavior.
Tanner, J., and Raymond, M. (2012). Marketing Principles (v. 2.0). Ch. 3: Consumer behavior: How people make buying decisions. Sections 3.1-3.6. Retrieved from https://2012books.lardbucket.org/pdfs/marketing-principles-v2.0.pdf
Markets
Any business needs to know the characteristics of the markets in which the firm operates. Understanding the customer and the market requires extensive and sophisticated research efforts to gather and analyze social and economic trends, human decision-making, and potential competitors. The goal of market research is to enable the firm to identify opportunities and threats in the business environment as well as the organization’s capacity to exploit its strengths and shore up its weaknesses.
Market research can be either primary (collected directly from the source), or secondary (collected/published by someone outside the organization). Some examples of secondary data include:
· US Census
· www.Data,gov
· Internal data (such as customer cards at grocery stores that collect data on buying patterns)
· Nielsen or Arbitron ratings
· Published articles and reports
· Blog posts
· Social media
The following chart illustrates the differences between primary and secondary market re ...
S3 - Customers, Segmentation, and Target Marketing.pdfJMHemachandra
This document discusses market segmentation and target marketing. It defines market segmentation as dividing the total market into relatively homogeneous segments based on characteristics like demographics, needs, preferences, etc. Traditional approaches include mass marketing, differentiated marketing, market concentration, and niche marketing. More advanced approaches involve individualized segmentation using one-to-one marketing, mass customization, and permission marketing enabled by new technologies. Successful segmentation requires segments to be identifiable, substantial, accessible, responsive, and viable/sustainable. Identifying target segments involves selecting relevant variables and may require shifting targets based on marketing strategy changes.
Running Head Competitive Analysis of the Organization .docxMARRY7
Running Head: Competitive Analysis of the Organization 6
Competitive analysis of the organization
It is important for any organization to thrive and succeed in their business markets. It is also vital for these particular firms to develop the need to analyze their competitor’s needs and strategies. Understanding competitor analysis however is important in ascertaining marketing planning strategies and processes. Strong competitors perhaps can hinder best performances of the firm and its general success, and at an advanced stages, it can lead to total failures. Competitive analysis however enables firms to anticipate their close competitor’s actions and that can enable the organization to exploit competitor’s weaknesses. The strategy also enables firms to identify their most unique selling points. The identification of the selling points however can be strengthened trough marketing campaigns. Competitive analysis however enables and aids successful competitors to continuously develop their best marketing strategies in acute response to the changes in the market place.
Based on porter’s five competitive forces, these strategies were developed basically as a framework for assessing and evaluating the business competitive strength and the firm’s business position. This strategy believes in the notion that five forces exist that determines the competitiveness and attractiveness of the market. It also identifies greatly where power lies in a business situation. Porter’s specifications are therefore important in realizing the strengths of the organization current competitive position, and it also predicts the organizational strength in the future. The forces however can be used by strategic analysts at advanced stages to realize if new products or services that prevail in the business environment are potentially profitable.
They can also use it to ascertain the areas that posses more strength, this will help in improving weaknesses and helps to avoid mistakes.
Porters five forces of competitive positions
Supplier power is the certainty of how suppliers make it easy to drive and raise prices. Normally, supplier power is driven by the number of suppliers for each particular input, the available of their products and services, the strengths supplier posses and the relative cost of switching from one particular supplier to the other. Suppliers posses power when: there are very few suppliers of a particular product, when substitute don’t exist, when the product is extremely important to the potential buyer who cannot do without it and also the degree of differentiation of inputs
Buyer power.Buyer’s posses the potential of lowering prices. This is normally ascertained by the number of buyers existing in the market. It is also related to the individual buyer to the organization. Cost of ...
The document discusses key concepts for analyzing markets and competitive spaces including:
1) Defining product-market boundaries and structures and identifying/describing end-users and how they make purchasing decisions.
2) Analyzing industry characteristics, competitors, and competitive forces within an industry.
3) Developing a strategic vision about how markets may change in the future given trends like blurring industry boundaries and evolving competitive landscapes.
This document outlines a 6-step framework for designing distribution channels for new industrial products. The key steps are: 1) Identifying customer segments, 2) Prioritizing customers' channel function requirements, 3) Benchmarking the seller's and competitors' channel capabilities, 4) Generating feasible channel options, 5) Evaluating the costs and benefits of each option, and 6) Aggregating options to maximize synergies across product lines and markets. The goal is to systematically evaluate different channel structures and identify the option that best satisfies customers' needs while optimizing costs and revenues for the firm.
This document provides an overview and introduction to business marketing. It begins by defining key terms like business marketing, business products, business buyers, and business markets. It then explains how business marketing differs from consumer marketing in that business purchases are made to achieve organizational objectives rather than for self-gratification. The document also classifies business products into seven categories based on how the goods are used, such as capital equipment, components, materials, and services. It notes that business buying decisions are more formalized and evaluated based on factors like potential demand, inventory levels, and profitability.
This chapter discusses organizational consumers (business-to-business marketing) and how they differ from final consumers. It defines various types of organizational consumers like manufacturers, wholesalers, retailers, and governments. Organizational consumers buy in teams, use specifications and competitive bidding, and their demand is ultimately derived from final consumer demand. The chapter also covers organizational consumers' decision-making process and how understanding their goals, purchasing methods, and industry classifications can help with marketing to them.
The document discusses various frameworks for conducting a situation analysis for advertising planning, including the 5Cs analysis, SWOT analysis, Porter's 5 forces model, AIDA model, DAGMAR model, and hierarchy of effects model. It explains how to use these models to analyze the company, competitors, customers, collaborators, climate/environment, and to identify strengths, weaknesses, opportunities, threats. It also discusses how to define advertising objectives and target audiences, and the importance of brand personality in positioning strategy. The planning process involves situation analysis, objective setting, targeting, strategy development, implementation, and evaluation.
Industrial Marketing (1 to 7th Lectures.pptxAdnanHaleem
The document discusses key differences between industrial (business-to-business) marketing and consumer marketing. It notes that industrial marketing involves creating value for organizational customers by addressing their needs and objectives. The buying process in industrial marketing is more complex, as purchase decisions are made by multiple influencers within an organization and are based on various technical and economic factors. Personal selling plays a more important role than advertising in industrial marketing compared to consumer marketing.
Marketing involves identifying, anticipating, and satisfying customer needs profitably. It is important for organizations as it allows them to communicate with customers, identify changing trends, and ensure their products meet customer requirements. Key factors that affect marketing decisions include government regulations, competition, technology changes, the economy, and consumer behavior trends.
A Business Market Segmentation Procedure For Product PlanningBrittany Brown
This document outlines a market segmentation procedure for business product planning and marketing. It begins by discussing the need for segmentation in business markets to identify groups of customers with distinct needs. It then reviews past research on business market segmentation, noting shortcomings like a lack of agreement on criteria and difficulties in data collection. The document proposes criteria for an effective segmentation model and outlines a multi-stage procedure using past purchase behavior to identify early adopters. It applies this procedure to the US information processing market as an example.
This document provides an overview of key concepts for conducting a market analysis. It discusses frameworks for analyzing the macroenvironment including SLEPT factors (social, legal, economic, political, technological). It also covers analyzing the microenvironment including Porter's 5 forces model to evaluate competitive rivalry, bargaining power of suppliers and buyers, and threat of substitutes and new entrants. Cultural dimensions from Hofstede that influence markets are outlined. The impacts of emerging markets, income distribution, and legal systems on international marketing are reviewed. Technologies relevant to marketing like mobile and digital media are covered.
1. Arndt, 1979, Towards a concept of domesticated markets
2. Jaworski et al, 2000, Market-driven vs. driving markets
3. Day, 1981, Strategic market analysis and definition
4. Caldwell et al, 2005, Promoting competitive markets
This document discusses differences between business-to-business (B2B) and business-to-consumer (B2C) marketing. It defines key concepts like derived demand, the accelerator effect, and market concentration in B2B markets. It also classifies different types of B2B customers like industrial distributors, value added resellers, original equipment manufacturers, users or end users, and government units. Finally, it notes differences in buying behavior and marketing practices between B2B and B2C.
This document summarizes key concepts from Chapter 3 of BPL 5100 related to analyzing the business environment and industry forces. It defines environmental awareness and forecasting, discusses favorable and unfavorable conditions for businesses. It then outlines the generic (macro) environment including economic, social, cultural, technological, political/legal factors. Finally, it discusses analyzing industry forces using Porter's five forces model, including rivalry, potential new entrants, supplier power, buyer power, and substitutes.
This document discusses Porter's five forces model of competitive strategy. It provides details on each of the five competitive forces: the threat of new entry, competitive rivalry, threat of substitution, bargaining power of suppliers, and bargaining power of customers. It explains how these forces shape industry competition and profitability. The document also discusses Michael Porter's development of the five forces framework and how it can be used to analyze industries and improve a firm's competitive position.
Competitor analysis involves three main steps:
1) Identifying competitors and grouping them into strategic groups based on similarities.
2) Gathering intelligence on competitors' performance, strategies, capabilities by examining public sources.
3) Analyzing competitors' objectives, assumptions, strategies, and resources to understand their strengths/weaknesses and how they may respond to strategic actions. Conducting a thorough competitor analysis helps firms make strategic decisions and predict competitive dynamics in their industry.
This document discusses market segmentation and reviews relevant literature. It begins by defining market segmentation as dividing a market into smaller groups with distinct characteristics and needs. The key bases for segmentation are identified as geographic, demographic, psychographic, and behavioral.
The document then reviews several studies and their findings. One study found that customers are willing to pay more for products tailored to their specific needs. Another argued that any proposed segmentation should meet tests for measurability, accessibility, stability, and substantiality. A third proposed segmenting based on factors causally related to future purchasing behavior.
The benefits of market segmentation are then discussed. Segmentation allows tailoring marketing mixes to specific target segments, which can increase profits and reduce competition.
Whirlpool Corporation reported lower first quarter earnings compared to the previous year due to challenging economic conditions in the US market. While sales increased 5% to $4.6 billion, net earnings decreased 24% to $94 million due to a 9% decline in US appliance industry demand. Operating profit also declined due to higher material and oil costs and lower US volume. Whirlpool revised its full-year US industry demand forecast downward to a 5-6% decline. International operations showed improved results and offset some of the losses in North America.
The document discusses employee welfare, which refers to benefits and facilities provided by employers to employees. It outlines the objectives of employee welfare such as enabling richer lives for workers, improving health, promoting belongingness, and deterring issues like drinking. It then describes the various agencies that provide welfare like central/state governments, employers, and trade unions. It categorizes welfare facilities as intramural (within establishments) or extramural (outside) and gives examples of each type. Finally, it briefly outlines some Indian employer measures, relevant labor statutes, and the role of labor welfare officers.
The document discusses communication, including its nature, principles, types, processes, barriers, and achieving effectiveness. Some key points:
- Communication is the exchange of information between two parties and requires both a sender and receiver. It aims to share information, ideas, and feelings.
- The communication process involves encoding a message, transmitting it through a channel, receiving it, decoding it, and providing feedback.
- Barriers like semantic issues, noise, physical barriers, and rumors can interfere with effective communication.
- Two-way communication, clarity of ideas, empathy, appropriate language, and credibility can help achieve more effective communication.
Sign language uses hands, face and eyes rather than vocal cords or ears to communicate. It is not derived from spoken language. Sign languages like American Sign Language (ASL) have their own distinct grammars and are not universal across countries. ASL has its own phonology, morphology, syntax and other linguistic properties similar to spoken languages. It can convey the same complex meanings as spoken languages. The study of sign language provides insights into the nature of all human language.
This document discusses interpersonal communication and effective communication models. It introduces the basic sender-receiver communication model and the pyramid of mutuality model which emphasizes mutual purpose, meaning, and respect. Communication styles are examined on a continuum from silence to violence, outlining strategies like politicking, hiding, withdrawing, monologuing, labeling and attacking. Examples of these strategies in work, school, home and social settings are provided. The document concludes with discussions around practicing new communication techniques and monitoring progress.
This document discusses various forms of body language and their meanings, including:
- Facial expressions like frowning and smiling and what they convey
- Gestures involving the hands, arms, legs and how their meanings can differ across cultures
- Paralanguage sounds and what they communicate
- How gestures are interpreted differently in different countries
It aims to outline the wide range of nonverbal signals sent through body language and paralanguage.
The document provides information about new employee benefits at UW Madison, including health insurance, dental, vision, flexible spending accounts, and retirement plans. It discusses who should review the benefits information, including short term academic staff, grad assistants, fellows, scholars, and post-docs. It also outlines the various benefits options and resources for enrolling and making changes, such as the deadline to enroll being within 30 days of the appointment start date.
This document discusses employee benefits and their administration. It begins by defining benefits and their strategic value in incentivizing employee retention. It then outlines various statutory and voluntary benefits, including retirement benefits, health insurance, life insurance, and time off. The document also covers benefit administration, communicating the value of benefits to employees, and utilizing tools like cafeteria and modular plans.
Demand forecasting uses historical data to predict future customer demand for products and services. This helps businesses make informed supply decisions to optimize inventory levels and meet sales targets. Common demand forecasting methods include time series analysis, surveys, and statistical modeling to predict sales from analyzing historical trends. Accurate forecasting allows businesses to improve production planning, inventory management, and capital investment decisions.
The document discusses the business environment and its importance for strategic decision making. It defines the business environment as the aggregate of political, economic, social, technological, legal and other factors that influence organizational operations. It then classifies the business environment into internal and external factors, and discusses various components of the external environment like suppliers, customers, competitors, and socio-cultural, demographic, technological, political and economic conditions. The document emphasizes that regular environmental scanning and analysis is crucial to identify opportunities and threats and enable organizations to adapt proactively.
Technology transfer is the process of sharing skills, knowledge, technologies, and manufacturing methods between governments, institutions, and companies. In India, many companies obtain updated technologies through joint ventures with companies in more advanced countries like Japan. For example, Tata Telecom has a joint venture with DOCOMO of Japan for technology and services. International businesses facilitate technology transfer between developed and developing countries through foreign subsidiaries, joint ventures, acquisitions, and alliances. This benefits developing countries by bringing in newer products and processes.
Rural marketing strategies should consider the rural environment and segment the heterogeneous rural market based on needs. Key strategies include developing small, affordable products and using various distribution methods like cooperatives or fairs. Promotion uses mass media like TV and focuses messaging on regional needs. Network marketing is a potential model, allowing rural residents to sell to trusted peers and leverage word-of-mouth. Challenges include remote locations while opportunities include tight communities and existing collaboration networks.
This document discusses job evaluation methods. It defines job evaluation as analyzing and assessing jobs systematically to determine their relative worth. It outlines objectives like gathering job data and determining job hierarchies. Common job evaluation methods are discussed, including ranking, classification, point and factor comparison. The point method assigns points to compensable factors like skills, effort, responsibility and conditions. The factor comparison method ranks benchmark jobs and allocates pay across compensable factors. In conclusion, the appropriate job evaluation scheme depends on market and organizational factors.
This document discusses job evaluation methods. It defines job evaluation as analyzing and assessing jobs systematically to determine their relative worth. It outlines objectives like gathering job data, comparing duties, and determining pay ranks. Common methods discussed are ranking, classification, point and factor comparison. Ranking simply arranges jobs in order. Classification matches jobs to predefined categories. Point assigns numerical scores to job characteristics. Factor comparison compares jobs based on compensable factors like skills, effort, responsibility. The conclusion states the appropriate method depends on market factors.
This document provides an overview of the South Asian Association for Regional Cooperation (SAARC). It discusses that SAARC was established in 1985 and currently has 8 member countries. The objectives of SAARC include promoting economic and social development in South Asia. It also outlines the structure and history of SAARC, describes the SAARC summits that have been held, and summarizes the goals and functions of the organization.
The document provides an overview of the European Union, including its history, membership, symbols, languages, economy, policies, and institutions. Some key points:
- The EU has 28 member countries and over 500 million citizens. It was founded after World War 2 to promote peace and prosperity in Europe.
- Important EU policies include the single market, euro currency, open borders policy, support for underdeveloped regions, environmental protection, consumer rights, and development aid.
- The main EU institutions are the European Parliament, European Council, Council of the EU, European Commission, European Court of Justice, and European Central Bank. They work to pass laws, manage policies, and uphold EU treaties.
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The document discusses the main institutions and activities of the European Union. It describes the three main political institutions - the European Parliament, Council, and Commission. It also outlines two financial institutions - the European Central Bank and European Investment Bank. On the legal side, it mentions the Court of Justice. Additionally, it provides overviews of the key policy areas of agriculture, fisheries, regional development, finance, and economics within the EU.
Rural marketing refers to activities undertaken by companies to encourage rural populations to convert their purchasing power into demand for goods and services. Over 70% of India's population lives in rural areas, which are scattered across thousands of villages. While rural populations have traditionally had lower standards of living, infrastructure development and rising incomes have increased rural purchasing power in recent decades. However, rural markets remain seasonal, price-sensitive, and challenging for marketers due to factors like low product exposure, traditional mindsets, and heterogeneous consumer characteristics across different rural communities.
Social Media Marketing – A Practical Approach.pptxdrgurudutta
This document provides an overview of social media marketing. It defines social media marketing and lists popular social media platforms. It discusses the nature and characteristics of social media, as well as statistics on social media usage. The document outlines benefits of social media marketing and provides strategies for using specific platforms like Facebook, YouTube, and blogs for business purposes. It also introduces tools that can be used to create content, advertise, analyze performance, and listen to social conversations.
The document discusses organizational initiatives and individual initiatives for career planning and development. Organizational initiatives include job posting systems, mentoring, career resource centers, career development workshops, human resource planning, performance appraisals, and career pathing programs. Individual initiatives include career planning, career awareness, utilizing career resource centers, and interests and competency analysis. Specific organizational initiatives like job posting systems, career paths, and individual initiatives like career planning are then described in more detail over several pages.
The European Union consists of 28 member states with a combined population of over 500 million people. It has a single market and allows freedom of movement between member states. Key EU institutions that make decisions include the European Parliament, European Council, Council of the EU, and European Commission. The EU began with six founding members and has undergone several enlargements to reach its current 28 members.
From Hope to Despair The Top 10 Reasons Businesses Ditch SEO Tactics.pptxBoston SEO Services
From Hope to Despair: The Top 10 Reasons Businesses Ditch SEO Tactics
Are you tired of seeing your business's online visibility plummet from hope to despair? When it comes to SEO tactics, many businesses find themselves grappling with challenges that lead them to abandon their strategies altogether. In a digital landscape that's constantly evolving, staying on top of SEO best practices is crucial to maintaining a competitive edge.
In this blog, we delve deep into the top 10 reasons why businesses ditch SEO tactics, uncovering the pain points that may resonate with you:
1. Algorithm Changes: The ever-changing algorithms can leave businesses feeling like they're chasing a moving target. Search engines like Google frequently update their algorithms to improve user experience and provide more relevant search results. However, these updates can significantly impact your website's visibility and ranking if you're not prepared.
2. Lack of Results: Investing time and resources without seeing tangible results can be disheartening. The absence of immediate results often leads businesses to lose faith in their SEO strategies. It's important to remember that SEO is a long-term game that requires patience and consistent effort.
3. Technical Challenges: From site speed issues to complex metadata implementation, technical hurdles can be daunting. Overcoming these challenges is crucial for SEO success, as technical issues can hinder your website's performance and user experience.
4. Keyword Competition: Fierce competition for top keywords can make it hard to rank effectively. Businesses often struggle to find the right balance between targeting high-traffic keywords and finding less competitive, niche keywords that can still drive significant traffic.
5. Lack of Understanding of SEO Basics: Many businesses dive into the complex world of SEO without fully grasping the fundamental principles. This lack of understanding can lead to several issues:
Keyword Awareness: Failing to recognize the importance of keyword research and targeting the right keywords in content.
On-Page Optimization: Ignorance regarding crucial on-page elements such as meta tags, headers, and content structure.
Technical SEO Best Practices: Overlooking essential aspects like site speed, mobile responsiveness, and crawlability.
Backlinks: Not understanding the value of high-quality backlinks from reputable sources.
Analytics: Failing to track and analyze data prevents businesses from optimizing their SEO efforts effectively.
6. Unrealistic Expectations and Timeframe: Entrepreneurs often fall prey to the allure of quick fixes and overnight success. Unrealistic expectations can overshadow the reality of the time and effort needed to see tangible results in the highly competitive digital landscape. SEO is a long-term strategy, and setting realistic goals is crucial for success.
#SEO #DigitalMarketing #BusinessGrowth #OnlineVisibility #SEOChallenges #BostonSEO
Mindfulness Techniques Cultivating Calm in a Chaotic World.pptxelizabethella096
In today’s fast-paced world, stress and anxiety have become common companions for many. With constant connectivity and an unending stream of information, finding moments of peace can seem like an insurmountable challenge. However, mindfulness techniques offer a beacon of calm amidst the chaos, helping individuals to center themselves and find balance. These practices, rooted in ancient traditions and supported by modern science, are accessible to everyone and can profoundly impact mental and emotional well-being.
In this humorous and data-heavy session, join us in a joyous celebration of life honoring the long list of SEO tactics and concepts we lost this year. Remember fondly the beautiful time you shared with defunct ideas like link building, keyword cannibalization, search volume as a value indicator, and even our most cherished of friends: the funnel. Make peace with their loss as you embrace a new paradigm for organic content: Pillar-Based Marketing. Along the way, discover that the results that old SEO and all its trappings brought you weren’t really very good at all, actually.
In this respectful and life-affirming service—erm, session—join Ryan Brock (Chief Solution Officer at DemandJump and author of Pillar-Based Marketing: A Data-Driven Methodology for SEO and Content that Actually Works) and leave with:
• Clear and compelling evidence that most legacy SEO metrics and tactics have slim to no impact on SEO outcomes
• A major mindset shift that eliminates most of the metrics and tactics associated with SEO in favor of a single metric that defines and drives organic ranking success
• Practical, step-by-step methodology for choosing SEO pillar topics and publishing content quickly that ranks fast
Mastering Local SEO for Service Businesses in the AI Era"" is tailored specifically for local service providers like plumbers, dentists, and others seeking to dominate their local search landscape. This session delves into leveraging AI advancements to enhance your online visibility and search rankings through the Content Factory model, designed for creating high-impact, SEO-driven content. Discover the Dollar-a-Day advertising strategy, a cost-effective approach to boost your local SEO efforts and attract more customers with minimal investment. Gain practical insights on optimizing your online presence to meet the specific needs of local service seekers, ensuring your business not only appears but stands out in local searches. This concise, action-oriented workshop is your roadmap to navigating the complexities of digital marketing in the AI age, driving more leads, conversions, and ultimately, success for your local service business.
Key Takeaways:
Embrace AI for Local SEO: Learn to harness the power of AI technologies to optimize your website and content for local search. Understand the pivotal role AI plays in analyzing search trends and consumer behavior, enabling you to tailor your SEO strategies to meet the specific demands of your target local audience. Leverage the Content Factory Model: Discover the step-by-step process of creating SEO-optimized content at scale. This approach ensures a steady stream of high-quality content that engages local customers and boosts your search rankings. Get an action guide on implementing this model, complete with templates and scheduling strategies to maintain a consistent online presence. Maximize ROI with Dollar-a-Day Advertising: Dive into the cost-effective Dollar-a-Day advertising strategy that amplifies your visibility in local searches without breaking the bank. Learn how to strategically allocate your budget across platforms to target potential local customers effectively. The session includes an action guide on setting up, monitoring, and optimizing your ad campaigns to ensure maximum impact with minimal investment.
Gokila digital marketing| consultant| Coimbatoredmgokila
Myself Gokila digital marketing consultant located in Coimbatore other various types of digital marketing services such as SEM
SEO SMO SMM CAMPAIGNS content writing web design for all your business needs with affordable cost
Digital Marketing Services | Techvolt Software :
Digital Marketing is a latest method of Marketing techniques widely used across the Globe. Digital Marketing is an online marketing technique and methods used for all products and services through Search Engine and Social media advertisements. Previously the marketing techniques were used without using the internet via direct and indirect marketing strategies such as advertising through Telemarketing,Newspapers,Televisions,Posters etc.
List of Services offered in Digital Marketing |Techvolt Software :
Techvolt Software offers best Digital Marketing services for promoting your products and services through online platform on the below methods of Digital marketing
1. Search Engine Optimization (SEO)
2. Search Engine Marketing (SEM)
3. Social Media Optimization (SMO)
4. Social Media Marketing (SMM)
5. Campaigns
Importance | Need of Digital Marketing (Online Promotions) :
1. Quick Promotions through Online
2. Generation of More leads and Business Enquiries via Search Engine and Social Media Platform
3. Latest Technology development vs Business promotions
4. Creation of Social Branding
5. Promotion with less investment
Benefits Digital Marketing Services at Techvolt software :
1. Services offered with Affordable cost
2. Free Content writing
3. Free Dynamic Website design*
4. Best combo offers on website Hosting,design along with digital marketing services
5. Assured Lead Generation through Search Engine and Social Media
6. Online Maintenance Support
Free Website + Digital Marketing Services
Techvolt Software offers Free website design for all customer and clients who is availing the digital marketing services for a minimum period of 6 months.
With Regards
Gokila digital marketer
Coimbatore
Breaking Silos To Break Bank: Shattering The Divide Between Search And SocialNavah Hopkins
At Mozcon 2024 I shared this deck on bridging the divide between search and social. We began by acknowledging that search-first marketers are used to different rules of engagement than social marketers. We also looked at how both channels treat creative, audiences, bidding/budgeting, and AI. We finished by going through how they can win together including UTM audits, harvesting comments from both to inform creative, and allowing for non-login forums to be part of your marketing strategy.
I themed this deck using Baldur's Gate 3 characters: Gale as Search and Astarion as Social
As 2023 proved, the next few years may be shaped by market volatility and artificial intelligence services such as OpenAI's ChatGPT and Perplexity.ai. Your brand will increasingly compete for attention with Google, Apple, OpenAI, and Amazon, and customers will expect a hyper-relevant and individualized experience from every business at any moment. New state-legislated data privacy laws and several FTC rules may challenge marketers to deliver contextually relevant customer experiences, much less reach unknown prospective buyers. Are you ready?Let's discuss the critical need for data governance and applied AI for your business rather than relying on public AI models. As AI permeates society and all industries, learn how to be future-ready, compliant, and confidentlyscaling growth.
Key Takeaways:
Primary Learning Objective
1: Grasp when artificial general intelligence (""AGI"") will arrive, and how your brand can navigate the consequences. Primary Learning Objective
2: Gain an accurate analysis of the continuously developing customer journey and business intelligence. Primary Learning Objective
3: Grow revenue at lower costs with more efficient marketing and business operations.
The digital marketing industry is changing faster than ever and those who don’t adapt with the times are losing market share. Where should marketers be focusing their efforts? What strategies are the experts seeing get the best results? Get up-to-speed with the latest industry insights, trends and predictions for the future in this panel discussion with some leading digital marketing experts.
Mastering Local SEO for Service Businesses in the AI Era"" is tailored specifically for local service providers like plumbers, dentists, and others seeking to dominate their local search landscape. This session delves into leveraging AI advancements to enhance your online visibility and search rankings through the Content Factory model, designed for creating high-impact, SEO-driven content. Discover the Dollar-a-Day advertising strategy, a cost-effective approach to boost your local SEO efforts and attract more customers with minimal investment. Gain practical insights on optimizing your online presence to meet the specific needs of local service seekers, ensuring your business not only appears but stands out in local searches. This concise, action-oriented workshop is your roadmap to navigating the complexities of digital marketing in the AI age, driving more leads, conversions, and ultimately, success for your local service business.
Key Takeaways:
Embrace AI for Local SEO: Learn to harness the power of AI technologies to optimize your website and content for local search. Understand the pivotal role AI plays in analyzing search trends and consumer behavior, enabling you to tailor your SEO strategies to meet the specific demands of your target local audience. Leverage the Content Factory Model: Discover the step-by-step process of creating SEO-optimized content at scale. This approach ensures a steady stream of high-quality content that engages local customers and boosts your search rankings. Get an action guide on implementing this model, complete with templates and scheduling strategies to maintain a consistent online presence. Maximize ROI with Dollar-a-Day Advertising: Dive into the cost-effective Dollar-a-Day advertising strategy that amplifies your visibility in local searches without breaking the bank. Learn how to strategically allocate your budget across platforms to target potential local customers effectively. The session includes an action guide on setting up, monitoring, and optimizing your ad campaigns to ensure maximum impact with minimal investment.
Efficient Website Management for Digital Marketing ProsLauren Polinsky
Learn how to optimize website projects, leverage SEO tactics effectively, and implement product-led marketing approaches for enhanced digital presence and ROI.
This session is your key to unlocking the secrets of successful digital marketing campaigns and maximizing your business's online potential.
Actionable tactics you can apply after this session:
- Streamlined Website Management: Discover techniques to streamline website development, manage day-to-day operations efficiently, and ensure smooth project execution.
- Effective SEO Practices: Gain valuable insights into optimizing your website for search engines, improving visibility, and driving organic traffic to your digital assets.
- Leverage Product-Led Marketing: Explore strategies for incorporating product-led marketing principles into your digital marketing efforts, enhancing user engagement and driving conversions.
Don't miss out on this opportunity to elevate your digital marketing game and achieve tangible results!
Can you kickstart content marketing when you have a small team or even a team of one? Why yes, you can! Dennis Shiao, founder of marketing agency Attention Retention will detail how to draw insights from subject matter experts (SMEs) and turn them into articles, bylines, blog posts, social media posts and more. He’ll also share tips on content licensing and how to establish a webinar program. Attend this session to learn how to make an impact with content marketing even when you have a small team and limited resources.
Key Takeaways:
- You don't need a large team to start a content marketing program
- A webinar program yields a "one-to-many" approach to content creation
- Use partnerships and licensing to create new content assets
Conferences like DigiMarCon provide ample opportunities to improve our own marketing programs by learning from others. But just because everyone is jumping on board with the latest idea/tool/metric doesn’t mean it works – or does it? This session will examine the value of today’s hottest digital marketing topics – including AI, paid ads, and social metrics – and the truth about what these shiny objects might be distracting you from.
Key Takeaways:
- How NOT to shoot your digital program in the foot by using flashy but ineffective resources
- The best ways to think about AI in connection with digital marketing
- How to cut through self-serving marketing advice and engage in channels that truly grow your business
Build marketing products across the customer journey to grow your business and build a relationship with your customer. For example you can build graders, calculators, quizzes, recommendations, chatbots or AR apps. Things like Hubspot's free marketing grader, Moz's site analyzer, VenturePact's mobile app cost calculator, new york times's dialect quiz, Ikea's AR app, L'Oreal's AR app and Nike's fitness apps. All of these examples are free tools that help drive engagement with your brand, build an audience and generate leads for your core business by adding value to a customer during a micro-moment.
Key Takeaways:
Learn how to use specific GPTs to help you Learn how to build your own marketing tools
Generate marketing ideas for your business How to think through and use AI in marketing
How AI changes the marketing game
Unlock the secrets to enhancing your digital presence with our masterclass on mastering online visibility. Learn actionable strategies to boost your brand, optimize your social media, and leverage SEO. Transform your online footprint into a powerful tool for growth and engagement.
Key Takeaways:
1. Effective techniques to increase your brand's visibility across various online platforms.
2. Strategies for optimizing social media profiles and content to maximize reach and engagement.
3. Insights into leveraging SEO best practices to improve search engine rankings and drive organic traffic.
Mastering Dynamic Web Designing A Comprehensive Guide.pdfIbrandizer
Dynamic Web Designing involves creating interactive and adaptable web pages that respond to user input and change dynamically, enhancing user experience with real-time data, animations, and personalized content tailored to individual preferences.
janani Digital Marketer|Digital Marketing consultant|Marketing Promotion|Coim...janudm24
Myself Janani Digital marketing consultant located in coimbatore I offer all kinds of digital marketing services for your business requirements such as SEO SMO SMM SMO CAMPAIGNS content writing web design for all your business needs with affordable cost
Digital Marketing Services | Techvolt Software :
Digital Marketing is a latest method of Marketing techniques widely used across the Globe. Digital Marketing is an online marketing technique and methods used for all products and services through Search Engine and Social media advertisements. Previously the marketing techniques were used without using the internet via direct and indirect marketing strategies such as advertising through Telemarketing,Newspapers,Televisions,Posters etc.
List of Services offered in Digital Marketing |Techvolt Software :
Techvolt Software offers best Digital Marketing services for promoting your products and services through online platform on the below methods of Digital marketing
1. Search Engine Optimization (SEO)
2. Search Engine Marketing (SEM)
3. Social Media Optimization (SMO)
4. Social Media Marketing (SMM)
5. Campaigns
Importance | Need of Digital Marketing (Online Promotions) :
1. Quick Promotions through Online
2. Generation of More leads and Business Enquiries via Search Engine and Social Media Platform
3. Latest Technology development vs Business promotions
4. Creation of Social Branding
5. Promotion with less investment
Benefits Digital Marketing Services at Techvolt software :
1. Services offered with Affordable cost
2. Free Content writing
3. Free Dynamic Website design*
4. Best combo offers on website Hosting,design along with digital marketing services
5. Assured Lead Generation through Search Engine and Social Media
6. Online Maintenance Support
Free Website + Digital Marketing Services
Techvolt Software offers Free website design for all customer and clients who is availing the digital marketing services for a minimum period of 6 months.
With Regards
Janani Digital Marketer
Coimbatore,Tamilnadu.
Dive deep into the cutting-edge strategies we're employing to revolutionize our web presence in the age of AI-driven search. As Gen Z reshapes the digital realm, discover how we can bridge the generational divide. Unlock the synergistic power of PPC, social media, and SEO, driving unparalleled revenues for our projects.
1. COMPETITOR ANALYSIS
John A. Czepiel
Professor of Marketing and Stern Teaching Excellence Fellow
Leonard N. Stern School of Business
New York University
New York, New York 10012
Telephone: (212) 998-0510
e-mail: jczepiel@stern.nyu.edu
and
Roger A. Kerin
Harold C. Simmons Distinguished Professor of Marketing
Edwin L. Cox School of Business
Southern Methodist University
Dallas, Texas 75275
Telephone: (214) 768-3162
e-mail: rkerin@mail.cox.smu.edu
2. 1
COMPETITOR ANALYSIS
Competitive marketing strategies are strongest either when they position a firm's strengths against
competitors' weaknesses or choose positions that pose no threat to competitors. As such, they require
that the strategist be as knowledgeable about competitors' strengths and weaknesses as about customers'
needs or the firm's own capabilities. This chapter is designed to assist the strategist understand how to
gather and analyze information about competitors that is useful in the strategy development process. It
discusses the objectives of competitor analysis and proceeds through the processes involved in
identifying important competitors and information needs, gathering necessary information, and
interpreting this information.
THE OBJECTIVES OF COMPETITOR ANALYSIS
The ultimate objective of competitor analysis is to know enough about a competitor to be able to think
like that competitor so the firm's competitive strategy can be formulated to take into account the
competitors' likely actions and responses. From a practical viewpoint, a strategist needs to be able to
live in the competitors’ strategic shoes. The strategist needs to be able to understand the situation as the
competitors see it and to analyze it so as to know what actions the competitors would take to maximize
their outcomes to be able to calculate the actual financial and personal outcomes of the competitor’s
strategic choices. They must be able to:
1. Estimate the nature and likely success of the potential strategy changes available
to a competitor;
2. Predict each competitor’s probably responses to important strategic moves on
the part of the other competitors; and
3. Understand competitors’ potential reactions to changes in key industry and
environmental parameters.
What then should one expect from competitor analysis? Underneath all of the complexities and depth of
competitor analysis are some simple and basic practical questions, of which the following are typical:
Which competitors does our strategy pit us against?
Which competitor is most vulnerable and how should we move on its customers?
3. 2
Is the competitor's announced move just a bluff? What's it gain if we accept it at
face value?
What kind of aggressive moves will the competitor accept? Which moves has it
always countered?
IDENTIFYING COMPETITORS
Identifying competitors for analysis is not quite as obvious as it might seem. Two complementary
approaches are possible. The first is demand-side based, comprised of firms satisfying the same set of
customer needs. The second approach is supply-side based, identifying firms whose resource base,
technology, operations, and the like, is similar to that of the focal firm. However, the firm must pay
attention not only to today's immediate competitors but also to those that are just over the horizon (such
as cellphones once were to cameras, social networking sites once were to web portals, or the internet
once was to video rental stores). There are three domains for recognizing the sources and types of direct
and less direct competitors to which the firm must also attend. These domains represent (1) the areas of
influence, (2) the contiguous area, and (3) the areas of interest.1
The area of influence is the territory, market, business, or industry in which the
firm is directly competing with other firms to serve the same customer needs
using the same resources. It is the arena in which Ford, Honda, Toyota, Kia, and
General Motors compete with each other; where Nokia competes with Samsung
and Motorola in cellphones. These are a firm’s direct competitors.
Immediately contiguous areas are those in which competition is close but indirect;
comprising those firms that serve the same customer need but with different
resources. Many food products fit into this category such as snack foods (potato
chips versus pretzels versus peanuts), or packaging (glass versus plastic versus
aluminum). They may serve the same need but through differing distribution
channels (direct such as Avon versus retail such as Revlon). These are a firm’s
indirect competitors.
Areas of interest are composed of firms that do not currently serve the same
customer base but have the same resource base or, in broader terms, have
capability equivalence – the ability to satisfy similar customer needs.2
For
1
William L. Sammon, Mark A. Kurland, and Robert Spitalnic, Business Competitor Intelligence: Methods for Collecting,
Organizing, and Using Information. John Wiley and Sons, 1984; Mark Bergen and Margaret A. Peteraf,”Competitor
Identification and Competitor Analysis: A Broad-Based Managerial Approach,” Managerial and Decision Economics 23,
(June-August 2002): 157-169; Bruce H. Clark and David B. Montgomery, “Managerial Identification of Competitors,”
Journal of Marketing, (July 1999), 67-83.
2
Margaret A. Peteraf and Mark E. Bergen, “Scanning Dynamic Competitive Landscapes: A Market-Based and Resource-
Based Framework,” Strategic Management Journal 24, 2003, 1027-1041.
4. 3
example, many firms possess the necessary capabilities to produce a wide range
of digital electronic devices whether cell phones, PDAs, cameras, or “pad”
computers. These comprise a firm’s potential competitors.
We will first examine product/market level competition – serving the same needs to the same customer
group. Next we will examine firm-level competition.
Identifying Competitors at the Product-Market Level
The most direct competitor competes for the exact same customers in exactly the same way as the
subject firm. It sells the same product made by the same technology to the same customers via the same
marketing channels. If the firm cannot win customer patronage versus such an identical competitor, then
it is unlikely that it can do any better competing against its indirect or potential competitors. Why? If the
firm's exact counterpart can win in direct competition, then that same competitor should also win more
against the less direct competitors.
Companies, per se, do not compete with each other in the marketplace. Rather, their individual
businesses compete with each other. The strategic marketing literature denotes a business as a division,
product line, or other profit center with a company that produces and markets a well-defined set of
related products and/or services, serves a clearly defined set of customers, and competes with a distinct
set of competitors.3
A business is further defined in terms of a number of key dimensions, which reflect the ways and places
in which it has chosen to compete. Primary among these are the products it offers and the types of
customers to whom it chooses to sell.
The products a firm offers can be defined along three dimensions: functions, technology, and materials:
Customer function is concerned with what need is being satisfied. This is the most natural
way to think about a product. Electromechanical devices, for example, can frequently be
designed to satisfy any size set of functions from very narrow to very wide. For example,
some cooking appliances are single function (microwave ovens), others are dual function
(combination convection-microwave ovens), while others are multifunction (combination
convection-microwave-conventional ovens). Another example concerns over-the-counter
medications which, although identical in ingredients, may be positioned or sold for the
3
Roger A. Kerin, Vijay Mahajan, and P. Rajan Varadarajan, Contemporary Perspectives on Strategic Market Planning.
Boston: Allyn & Bacon, 1990.
5. 4
relief of colds or allergies or sinus symptoms. Others, such as Nyquil, are sold for even
more specific usage applications (night-time cold relief).
Technology tells how the customer function(s) are being satisfied. For example, kitchen
ranges may use two sources of thermal energy (gas or electric) or, alternatively,
microwave energy to cook. X rays, computerized axial tomography (CAT scan
machines), and NMR (nuclear magnetic resonance) are three different technologies used
in medical diagnostic imaging.
The materials used in the manufacture of the product may also differ, producing slight
differences in products that are otherwise identical. Cabinets may be made of chipboard
versus plywood; bottles of glass or of such plastics as PET, polypropylene, or
polyethylene; and beverage cans of aluminum or steel.
The customer group being served is a key dimension. Automobile parts manufacturers, for example,
may choose to serve either the original equipment manufacture (OEM) market or the automotive
aftermarket, or both. One competitor may focus on serving urban markets while another serves rural
markets. Wal-Mart's initial success came from its focus on serving small, rural markets that traditional
discounters had thought too small and too poor to serve. In contrast, J.C. Penney has defined its
customers as those households in the middle 80% of the U.S. income distribution. Lane Bryant stores
cater to women in need of larger sizes. There are obviously many ways of defining a firm's targeted
customer groups.
The product manager needs to understand the exact extent of competition among the products available
on the market. At this level, competitors are best identified by customers – the demand side – rather than
by supply characteristics.
Substitution-in-use. Current thinking about identifying the competitive structure for any given product
is based on the idea of substitution-in-use. Three premises underlie the idea:
1. People seek the benefits that products provide rather than the products per se.
2. The needs to be satisfied and the benefits which are being sought are dictated by the
usage situations or applications being contemplated.
3. Products and technologies are considered part of the set of substitutes if they are
perceived to provide functions which satisfy the needs determined by intended
usage.4
4
George S. Day, "Strategic Market Analysis: Top-Down and Bottom-Up Approaches" (Cambridge, MA: Marketing Science Instjtute,
Report No. 80-105, August 1980), p. 14.
6. 5
Determining a product's direct competition, then, may provide an answer that says, "It depends." It
depends on (l) the number of separate and different uses or applications for the products in the market;
(2) the number of different usage situations which customers encounter; and (3) user characteristics,
including the number of product types or brands that a customer would evoke and choose among.5
Some markets are relatively simple because the offerings within them provide only a single function for
one or a few uses. Travelers checks or bathroom tissue are two such products. Other examples include
home pasta makers and irons, both of which perform a specific function across a small number of
different usage situations. At the other extreme are complex markets in which each customer has many
uses for the product and many alternatives to consider. Snack foods or dessert foods are such.
Depending on the intended usage occasion or situation, each of those product categories has many
different kinds of products in competition. In the snack category, potato chips, pretzels, and various
kinds of nuts, among others, compete. In the dessert realm, cakes, pies, ice cream, cookies, brownies,
among others, compete.
Consider the cosmetics market structure shown in Exhibit 1. Consumers have a number of different
need states ranging from personal expression, everyday usage, health or nourishing, reward, or special
times. Depending on both their own economics and the need state, they may seek different price points
and distribution outlets for their purchase. For any given need state, then, the competitive set will vary
depending on price points, distribution, and exact type of outlet chosen or encountered. Consider the
cosmetics brand Aveda. Aveda distributes its cosmetics and personal care products through its own
stores. While its products compete at a high level with those offered by such firms as Revlon or
L’Oreal, the competition is not as direct as it is between brands whose products are next to each other on
the drugstore shelf .
Financial services offer a similar example. One study, for example, defined a product market to be "the
set of products judged to be substitutes within those usage situations in which similar patterns of benefits
are sought by groups of customers."6
In the study, upscale customers were asked to judge the
appropriateness of twenty-four different financial services across each of twelve different usage
situations. One such usage situation was described thus: While you are out of town on a trip you have
5
Day, "Strategic Market Analysis, "p. 20; see also Glen L. Urban, Philip L. Johnson, and John R. Hauser, "Testing Competitive Market
Structures," Marketing Science, 3, no.2 (spring 1984), 83-112.
7. 6
some unexpected problems with your car. The repair bill, at a small independent garage, is about $100
and must be paid immediately.
EXHIBIT 1: Cosmetics Market Structure
Cosmetics
Female Situations
Everyday
Usage
Health/
Nourishing
Reward
Special
Times
Personal
Expression
Everyday
Usage
Health/
Nourishing
Special
Times
Low Medium High
Super
Premium
Male Situations
Quality/
Price:
Need
States:
Broad Prestige Alternative
Food
Free
Standing
Mail/TV/
Print
Drug
Discount
Mass
Club
Specialty
Chain
Dept.
Stores
Direct
Health
Food
Salons
Distribution:
Outlets:
Using Purchase Behavior to Identify Competitors. No matter how much logical sense an analysis
such as the foregoing makes, it is based on what customers say, not on what they do. Several researchers
have developed techniques which are based on actual purchase data. Exhibit 2, for example, depicts the
competitive structure of the toothpaste and bathroom tissue markets estimated on the basis of
supermarket scanning data.7
In this instance, the map positions products on the basis of their attributes
on a per-dollar basis. As the map shows clearly, all toothpastes are not alike. Customers preferring taste
over anti-cavity qualities are more likely to buy Close-Up or Aim than Crest. Furthermore, Close-Up
and Aim are closer competitors than either is with Crest. The bathroom tissue market shows a similar
6
Rajendra K. Srivastava, Mark I. Alpert, and Allan D. Shocker, "A Customer-Oriented Approach for Determining Market Structures,"
Journal of Marketing, 48, no.2 (spring 1984), p. 32.
7
Steven M. Shugan, "Estimating Brand Positioning Maps Using Supermarket Scanning Data," Journal of Marketing Research, XXIV
(February 1987), 1-18; see also Steven M. Shugan, "Brand Positioning Maps from Price/Share Data: The Case of Bathroom Tissue"
(unpublished working paper, University of Chicago Graduate School of Business, July 1986, Revised) and Terry Elrod, "Choice Map:
Inferring a Product-Market Map from Panel Data," Marketing Science, 7, no. 1 (winter 1988), 21-39.
8. 7
positioning along its two primary dimensions: absorbency and softness. To say that Scott and White
Cloud compete is true and not true at the same time. One might better say that Scott and Northern are in
closer competition than either is with White Cloud or Charmin.
EXHIBIT 2: Brand Positioning Maps
Anticavity
Toothpaste market
(attributes per dollar)
(a)
Softness
Bathroom tissue market
(attributes per dollar)
(b)
Texture/taste
Absorbency
•
•
•
•
• •
•
•
•
Close-up/Aim mint
Aim regular
Aqua Fresh
Crest
Scott
Northern
Soft ‘N Pretty
Charmin
White Cloud
SOURCE: Adapted from Steven M. Shugan, “Estimating Brand Positioning Maps Using Supermarket Scanning
Data,” Journal of Marketing Research, XXIV (February 1987), p.8; and “Brand Positioning Maps from Price/Share
Data: The Case of Bathroom Tissue” (unpublished working paper, University of Chicago Graduate School of
Business, July 1986), p.21
Identifying Potential Competitors
Depending on the purposes of the competitive analysis, it may also be important to identify potential
competitors. The process starts by identifying firms for whom the various barriers to entry to the
industry are low or easily surmountable. These may include the following:
Technology: Firms which possess the technologies necessary to operate in an industry
represent one source of potential competitors. Analysis of patent activity frequently
signals intentions well prior to actual entrance.
Market access: In businesses where market access is a key factor for success, firms
with that access frequently attempt to leverage it by acquiring additional product lines
to be sold in that channel or to those customers.
Reputation and image: Brand extension strategies are based on the use of a firm's
reputation in one product area to leverage its entry into another. Clairol used its
reputation in hair coloring to enter into the hair dryer business.
9. 8
Operating knowledge and skills: Regional competitors in a business often expand
geographically. Entenmann's Bakeries moved into Florida and Midwestern markets
from their original Northeastern base, similar to the path taken by Thomas's English
Muffins. Folger's coffee was originally a regional brand on the West Coast until
purchased by Procter & Gamble which expanded its distribution nationwide.
Identifying Competitors at the Firm Level
The concept of interfirm rivalry extends beyond the product/market level. Competition can also occur as
firms use related resources to bear on individual product/market level rivalry. The theory of
multimarket competition describes those situations in which firms compete against each other in
multiple markets.8
For example, in 1989, America West entered the Houston, Texas market –
Continental Airline’s home base -- with low introductory fares.9
Continental retaliated, not by lowering
prices in Houston but by lowering prices in Phoenix, Arizona , America West’s home base and then
communicated its displeasure with America West’s actions in Houston. As a result, America West
rescinded its low prices in the Houston market and, subsequently, Continental ceased its low-price
counterattack in Phoenix. Such behavior requires that the manager understand the broader firm-level
competitive set capable of such competitive behavior. One approach is to identify the different strategic
groups in an industry.
The strategic group approach to identifying competitors is based on the differences in firms' strategies
for competing in an industry. As such, it is a more general concept than the business definition approach.
Like the business definition approach, the concept is intuitively appealing and understandable. For
example, a hypothetical industry may be composed of three strategic groups:
1. A set of large firms pursuing a strategy of low-cost production of a full line of
standardized products through mass-market outlets;
2. Another set of firms whose strategy emphasizes high-quality, differentiated, and
branded products sold through specialty shops; and
8
Aneel Karni and Birger Wernerfelt, “Multiple Point Competition,” Strategic Management Journal, 6 1985, 87-96 and
Satish Jayachandran, Javier Gimeno, and P. Rajan Varadarajan, “The Theory of Multimarket Competition: A Synthesis and
Implications for Marketing Strategy,” Journal of Marketing, (July 1999), 49-66.
9
Asra Nomani, “Airlines May be using a Price-Data Network to Lessen Competition,” The Wall Street Journal, June 28,
1994, A1.
10. 9
3. A group of smaller firms which have gained strategic advantage by specializing in
serving either specific customer groups or producing a very narrow range of
products.10
The strategic group concept is useful in identifying and analyzing firm-level competitors because
members of a strategic group not only resemble each other but are also affected similarly by any given
event or change in the environment. Given that they are playing the same game in the same way, it
would indicate that their economics are similar. The commonality in their strategies means that they will
likely respond in a similar manner to competitive threats or moves.
A further point should be noted about strategic groups. While all of the firms in an industry are in
competition at a broad level, those in the same strategic group compete more closely among themselves
than with those in other groups.11
For example, Proctor & Gamble, Unilever, and Colgate-Palmolive in
the household and personal care products markets are in closer competition with each other than they are
with direct sellers of household and personal care products such as Amway or Avon. Further, the
competition between and among groups is not equal – the various pairs of groups may compete more or
less intensely. By observing the successes of the different strategic groups, one can better understand the
potential for multimarket competition.
Competitive Blind Spots
Much competitive information is bounded by the assumptions that managers’ have with respect to their
industry and these assumptions may lead to blind spots. The effect of such blind spots may cause the
strategist to not recognize the significance of events, interpret them inappropriately, or see them only
slowly.12
There are six serious blind spots in competitive analysis:13
1. Misjudging Industry Boundaries. Too often firms define their industry around their current
products, customer groups, and geographies blinding themselves to adjacent competitors which
subsequently enter their current space.
10
This hypothetical industry, in fact resembles the home appliance industry in the 1960s as described by Michael S. Hunt in his dissertation.
Hunt coined the phrase "strategic groups" to explain the differences in profitability he observed within the industry. Michael S. Hunt,
"Competition in the Major Home Appliance Industry, 1960-1970" (unpublished doctoral dissertation, Harvard University, 1972).
11
The biological analogy predicts this. As Bruce Henderson(the founder of the Boston Consulting Group) noted, "The more similar
competitors are to each other, the more severe their competition. This observation was made by Darwin in The Origin of Species." Bruce
Henderson, "The Anatomy of Competition," Journal of Marketing, (Spring 1983), p. 8.
12
Michael E. Porter, Competitive Strategy. New York: The Free Press, 1980, 59.
11. 10
2. Poor Identification of Competitors. Strategists frequently focus on only the largest and most
well-known companies to the exclusion of other viable competitors – those potential competitors
noted earlier in this chapter.
3. Overemphasis on Competitors’ Visible Competence. Competitor analysis often focuses on
competitors’ hard assets and technology skills and ignore equally potent capabilities such as
logistics, product design, or human resources.
4. Emphasis on Where, Not How to Compete. Strategists too often assume that competitors’
strategies will shift only incrementally to the exclusion of radical repositioning in how they could
compete.
5. Faulty Assumptions about Competitors. Prisoners of assumptions about competitors – the
overuse of stereotypes – cause strategists to misjudge competitors’ competences and competitive
advantages.
6. Paralysis by Analysis. Obsession with the task of data collection results in information overload
to the detriment of analysis and insight.
IDENTIFYING COMPETITOR INFORMATION NEEDS
The goal of competitor analysis is to be able to predict a competitor's probable future actions, especially
those made in response to the actions of the focal business. This requires information that is both
quantitative and factual (what the competitor is doing and can do) as well as that which is qualitative and
intentional (what the competitor is likely to do). There are four key knowledge areas:
1. The competitor’s marketplace strategy in terms of scope, posture, and goals;14
2. The sources of competitive advantage that give its marketplace strategy potency
including resources and capabilities, organization, mind-set, and its place in the
industry eco-system;
3. The interpretation of the signals being sent by the competitor both by its actions and
communications; and
4. A competitive response profile which analyzes the competitor’s possible future
moves.
13
Shaker A. Zahra and Sherry S. Chaples, “Blind Spots in Competitive Analysis,” Academy of Management Executive, 7,
no.2, (1993), 7-28; E. J. Zajac and M. H. Bazerman, “Blind Spots in Industry and Competitor Analysis: Implications of
Interfirm (Mis)perception for Strategic Decisions, Academy of Management Review, 16:1, 1991, 37-56.
14
Liam Fahey, Competitors: Outwitting, Outmaneuvering, and Outperforming. New York: John Wiley & Sons, 1999.
12. 11
The Competitor’s Marketplace Strategy
The competitor’s marketplace strategy defines the way the competitor is currently competing in the
marketplace. 15
It defines the strategic choices the competitor has made about where, how, and why it
seeks to attract, win, and retain customers. A competitor’s marketplace strategy has three elements:
1. Scope – the product-customer segments the organization is in or wants to be in;
2. Posture – how it competes or wants to compete in those marketplace segments;
3. Goals – its purpose in being in those segments.
Scope defines the products offered to the market and the customers that purchase them. It needs to
incorporate both “static” and “dynamic” analyses. A static analysis defines where the competitor is and
what it is doing at the present time; dynamic analysis refers to the moves the competitor has or is
making over time in its choice of products or customers or both. Customer segments may be identified
by needs or the demographics tied to those need states.
Posture defines how a competitor plays in the marketplace to win customers; most importantly it is
about how it differentiates itself from competitors in the eyes of customers. As with scope, it needs be
both static and dynamic. Exhibit 3 lists eight of the more common means of defining how the
competitor competes, such as product line width, product features, and the like. Successful competitors
generally employ a number of interrelated modes to compete. Seldom is the reliance on one dominant
mode (say low price, for example) a successful strategy.
Goals address the why of the scope and posture strategies that a competitor uses. Goals are the end
whereas scope and posture are the means to that end. While it is easy to say that the goal is to generate
profit, that is an end result several steps beyond the scope and posture actions being taken. Goals may
be at the highest level of the business’s intent and vision, such as Apple’s intention to integrate voice,
data, and video. It may be at a lower level focusing on the short to medium term such as penetrating
each major channel of distribution or the attainment of a specific gross margin objective. Or it may be
even more short term as achieving market share goals, cost efficiencies, or cash flow targets. Unless the
goals have been publicly announced as a signal to the marketplace or to competitors, the analysis often
15
This section is based on Liam Fahey, pp. 108 – 118.
13. 12
must infer the competitor’s goals from the flow of observable actions it has taken. At the heart of such
an analysis is the question: “Why is the competitor taking the observed action?”
EXHIBIT 3 Identifying How a Competitor Competes
Modes of Competition Possible Dimensions Sample Indicators
Product line width Breadth of product lines
Breadth of types within lines
Product lines and items
Features Physical aspects of individual
products
Packaging
Terms and conditions
Shape
Style
Color
Design
Functionality Performance
Reliability
Durability
Ease of use
Taste
Shelf life
Speed
Breakdowns
Customer perceptions
Service Maintenance
Installation
Help line
Training
Technical assistance
Repair
Response time
Contracts
Service announcements and
programs
Customer reports
Speed of competitor’s responses
Availability Distribution channels
Amount
Delivery
Individual channels
Image and reputation Image of the company
Image of products
Reputation for rapid response time
Reputation for best value
Content of advertising
Actions and words of customers
Third-party reports
Selling and relationships Customer coverage
Detailing of products
Relationships with distributors
Relationships with end users
Actions of sales force
Frequency of calls
Judgments of channels
Customer’s comments
Price List prices
Discount prices
Price-performance
Price-value
Actual prices
Channel/Customer assessments
SOURCE: Liam Fahey, Competitors: Outwitting, Out Maneuvering, and Out Performing. John Wiley & Sons, Inc. 1999 at
p.11.
14. 13
The Competitor’s Source(s) of Competitive Advantage
Beneath a competitor’s marketplace strategy lie the organization and the functional operations and
processes that make the strategy possible. If the competitor is rational, then its marketplace strategy will
have been built around those functions and activities where it is competitively advantaged versus
competitors.16
The ability to assess the economics of a competitor is key to competitive analysis.
Incorporating knowledge about the competitor’s advantages is key to understanding its strengths and
weaknesses and its likely moves in the marketplace.
Inputs are a key source of advantage in many industries. Since very few businesses are completely
vertically integrated, but simply add value to purchased inputs through its operations, assessing a
competitor’s costs of its raw materials is an important analysis. Identifying a competitor’s suppliers and
estimating such things as transportation costs is the first step. In businesses for which labor is a large
part of its cost structure, that is the second step. Labor contracts are one source of such information as
are the various wage surveys available. The third element of inputs is the firm’s weighted average cost
of capital (WACC). A firm with a lower WACC can invest at a lower hurdle rate – the rate of return an
investment must earn to gain corporate approval – and expand faster than one with a higher WACC.
Equity analysts and many financial data services calculate the WACCs of firms.
Technology is the second focus, especially in industries that are still evolving. Assessing competitors’
current operations and product technology is one step. Assessing the direction of its technology
investments is the second. Many firms announce the present and future state of their technology to
signal to competitors their competitive advantages. In other instances, following a competitor’s
published patents and scientific publications can give the analyst good indications of its direction.
Estimating the number of R&D personnel is another common technique. As a generalization, a
competitor that put more resources against a given technology will create better technology faster than
competitors giving it better products and operations.
Operations is the third focus. Many aspects of a competitor’s operations can be accessed simply by
buying its products and examining or reverse engineering them. Quality, fit and finish, durability, and
the like can give the analyst insight into aspects of its operations. In service businesses, it is not difficult
15. 14
to benchmark one’s own operations versus competitors’ to understand how customers experience those
operations. Comparing the Cost of Goods Sold line of competitors’ operating statements is another
route.
Products are the primary locus of marketplace strategy. There are many ways to assessing advantage of
competitors’ products. The important aspect is to assess the products as customers see them. Customer
surveys are a key and frequently used tool in this analysis. While many of the technical performance
features are easy to measure, understanding the sources of customer value indicate what aspects of the
products to analyze.
Access, Segments, and Customers are the final steps in understanding a competitor's sources of
competitive advantage. Analyzing the type, number, and quality of channel members serving a
competitor, and its coverage in different channels of distribution are key to assessing a competitor’s
advantage. For example, Anheuser-Busch, which sells almost 50 % of the beer in the United States, has
been able to attract the highest quality distributors. In fact, some 60 to 70% of those distributors carry
only Anheuser-Busch products. Other brewers, therefore, are not able to attract the same quality or must
settle for distributors that also sell competing beers. Knowledge of competitors’ penetration of the
various segments is also important. Competitors who have a large share of growing customer segments
are advantaged. Similarly, the customers a firm chooses sells to can be a source of competitive
advantage or disadvantage. One supplier to the slow growing personal care market, for example, chose
to target as its customers the small number of firms that were growing in the otherwise stagnant market,
thereby growing while its competitors lost volume. In the early 2000s, Mitsubishi targeted the youth
market in the United States with fast, small and sporty cars. Unfortunately, their customers’ credit was
poor and too many defaulted on the car loans.
Assessing and Interpreting Competitive Signals and Actions
Competitor analysis is more than a static activity. It requires more than the creation of a comprehensive
report detailing the apparent strategies of the key industry competitors. It often means having only an
hour or two to interpret the meaning of a competitor's 10% across-the-board price cut and to formulate a
response. It often means being able to predict the reaction of competitors to your announcement of a
16
George S. Day and Prakash Nedungadi, “Managerial Representations of Competitive Advantage,” Journal of Marketing
16. 15
major joint venture with the technology leader from an adjacent industry, or to your preannouncement of
a major new product.17
It means being able to understand what the leading competitor's chief executive
means when quoted as saying of his company, "We must absolutely be as competitive as we possibly
can." Is the message intended to rally the troops or to warn competitors?
Interpreting Competitive Signals. Exhibit 4 presents a representative picture of the domain of
competitive signaling. Interpreting a competitor’s message requires that one simultaneously consider the
form of the message, its probable function, the forum or medium in which it is communicated, and the
probable veracity of the message.
Message Form. Prior announcements are perhaps the most often used form of competitive signaling
because of their absolute versatility and ambiguity. One can announce with complete truthfulness the
intention to expand capacity at some future point in time and change one’s mind at some point
thereafter. Prior announcements admit to the largest range of purposes and forums.
Announcements of accomplished fact or results, on the other hand, admit to a smaller range of
application perhaps, but gain in the willingness of the receiver to believe that what has been announced
has actually happened. Of course, this belief does not necessarily extend to swallowing whole the exact
numbers, market shares, and so forth that are offered in the announcement.
Public discussions of the state of the industry or competition within it rival prior announcements in their
frequency and breadth of purpose. Speeches made at industry conferences, especially those attended
exclusively by top-level executives, are carefully crafted to convey messages to participants and just as
carefully dissected by rivals. Some, of course, need little interpretation. In an article in the Wall Street
Journal, a portfolio manager with large holdings of Alcatel-Lucent stock was quoted saying:
“the debilitating price wars between Alcatel-Lucent and its rivals could be
“stabilizing,” citing statements by Ericsson’s (an Alcatel-Lucent competitor)
management that the firm wouldn’t push to gain market share in wireless equipment by
cutting prices as it had early last year.”18
(April 1994), 31-44.
17
Jehoshua Eliasberg and Thomas S. Robertson, "New Product Preannouncing Behavior," Journal of Marketing Research, (August 1988),
282-92.
18
Wall Street Journal, “Alcatel-Lucent Deal, Revisited,” February 7, 2007, p.C2.
17. 16
EXHIBIT 4: The Domain of Competitive Signaling
FORM
PURPOSE
(UNDERLYING
OSTENSIBLE) VERACITY
FORUM OR
MEDIUM
MESSAGE
CONTENT
Prior announcement
Announcement after
the fact
Public discussion of
industry
Discussion of own
moves
Preemption
Communicate
strategic advantages
Threat of contingent
action
Express pleasure or
displeasure
Test of competitors’
sentiments
Minimize
provocative
potential of own
action
Avoid simultaneous
actions
Inform financial
community
Gain internal
support
True/untrue
Bluff
Misleading
Over/understated
Broad, prestigious
industry audience
Financial analysts
meeting
Interview in major
industry/business
publication
Press release
Letter to customers
or suppliers
Private
communication
with competitor
Firm’s goals
Internal situation of
firm
Firm’s intention
Expectations of
competitor behavior
Rules of
game/nature of
dilemma
Discussing one's own move in terms of its intent or rationale happens with less frequency than prior
announcements but possibly with greater impact. The apparent openness with which a competitor
discusses the rationale underlying a given strategic move adds the luster of truth to the message,
especially if it is shared in whispered tones with key customers or suppliers, Few public relations
campaigns can spread news through an industry faster than sharing a strategy "in confidence, of course,"
with a customer whose greatest benefit is served by keeping competition for his or her business at a high
pitch.
Message Function. The range of functions served by signaling is wide, and any given message may
fulfil1 several simultaneously. Attempts to preempt competitors are certainly a leading function. During
periods of shortages, industry publications are replete with competitors trying to preempt others from
adding capacity by announcing their own capacity additions first. Announcing the future availability of
major product developments to postpone customer purchase of competitors' products is another form of
preemption. To the extent that it can be achieved, preemptive announcements are also used as the
18. 17
occasion to communicate strategic advantage to discourage less advantaged competitors from cluttering
up the playing field.
Some messages are intended to minimize competitive provocation by explaining the rationale behind
projected actions which could otherwise be interpreted as aggressively competitive. Consider, as an
example, the announcement for lowering CD prices by the Universal Music Group in 2003:
"We're going to reinvigorate the record business in North America. Our new pricing policy will
allow us to take the initiative in making music the best entertainment value and most compelling
option for consumers. UMG is responsible for almost 30 percent of album sales in the U.S. so
we are uniquely positioned to try this new strategy. . . . We strongly believe that when prices are
dramatically reduced on so many titles, we will drive consumers back to stores and significantly
bolster music sales."19
Some external signals are given to gain internal support. Announcements in the public press by a
company's president or chairman of its new drive to provide the highest level of quality are frequently
more credible to employees than many internal communications programs. A variation is the external
announcement that is made to cutoff further internal discussion of a given strategy or specific action.
Along the same line, some announcements are made primarily to communicate indirectly with the
financial community. Signals such as these may indeed carry little of import for competitors.
Message Content. The actual content type of the message is important. One researcher has studied the
various messages allowed in experimental studies of negotiation, cooperation, and competition built
around the various forms of the prisoner's dilemma and was able to discern different types of content.20
Communication about the firm's goals has the potential to remove the dilemma in a situation in which
the motivations are not clear. For example, if both are cooperatively disposed and both are aware of that,
the obvious choice is to cooperate. Signals which communicate information about the internal situation
of the firm, its health, success, and feelings about its outcomes and situation give others that knowledge
necessary to infer its payoff matrix.
Signals about a firm's intentions give competitors information about how best to plan their own actions;
this is especially so if the statement reveals commitment as well. Such knowledge is clearly important if
19
Ethan Smith, "Universal Slashes CD Prices to Revive Music Industry," Wall Street Journal, September 4, 2003, pp. B1,
B8.
20
Marian Chapman Bourke, "Signalling and Screening: Tactics in Negotiations Across Organizations" in Blair Sheppard, Max Bazerman,
and Roy Lewicki, eds., Research on Negotiations in Organizations (Greenwich, CT: JAI Press, 1988).
19. 18
the goal is to chart nonintersecting strategies. Communications or signals which state expectations of the
competitor's behavior maybe helpful in situations in which competition or cooperation are the choices
and it is not clear to others how they should act.
It has been said that discussing the rules of the game and nature of the dilemma is particularly relevant
in competitive inter-firm situations because this message content contains more information than any of
the others. Not only are statements about the nature of the game the most innocuous, but a cooperative
equilibrium typically requires that competitors share a common view of how the game is played.
Ultimately, of course, all competitors must limit their competitive behavior, and public discussions
about how the buyer is the only winner in price wars are one way of signaling the need to cool the
competitive state. David Steiner, the then Chief Executive Office of industry-leading Waste
Management, made the following statements during a conference call with investors:
“If you are going to continue to raise prices as an industry you’ve got to have all the industry
players acting consistently. We’re going to continue to raise price. We would certainly hope that
the industry follows along with us.”21
Forum or Medium. Where and how a message is delivered is of key importance in its interpretation.
Messages delivered before prestigious industry audiences or to a formal meeting with financial analysts
are taken to contain higher truth content than those delivered in other forums. This is simply because
both groups have good memories and require relationships based on personal trust.
Interviews in industry and business publications, on the other hand, are taken for what they are---the
attempt by the competitor to deliver a carefully crafted message to a specific audience. The reality of the
situation is that no executive has to consent to be interviewed and that consent is only given when there
is some purpose to be served. Press releases are in a similar category. Letters to customers, on the other
hand, carry a lot of weight.
Veracity. Truth in strategic communication is a relative concept. While a communication may indeed be
just what it is and says, the strategist is better off asking how it would benefit the sender if it were to be
accepted as true by the receiver. Some signals are bluffs which will not be implemented if the bluff is
successful in deterring competitive action but probably would not have been implemented anyway. Too
20. 19
many bluffs, however, and all parties suspend belief and the firm has lost a valuable tool through
overuse. More often, the content of communications contains some aspects that are misleading or
simply over or understated. These aspects require the analyst to cross-check all numbers and to analyze
every statement for possible alternative interpretations. Sometimes ambiguity is intentional to allow one
to read a possible worst-case scenario into an otherwise innocuous message. Some signals carry as much
contradictory and hidden meaning as the gambits and contrivances one finds in the best of the Cold War
spy novels.
Interpreting Competitive Actions. Interpreting a competitor’s actions follows a similar analysis,
beginning with the overriding question: “Why is the action being taken?” In seeking to answer that
question, the first step is to characterize the type of action. A frontal attack is where the competitor
directly attacks with an identical or similar product. In the 1990s, Unilever directly attacked P&G’s Joy
brand dishwashing liquid with an identical product under the brand name Sunlight. Both were yellow,
lemon scented products in identical bottles promising shiny dishes. A flanking attack, on the other hand,
is when the competitor enters an adjacent product-customer segment rather than going head-to-head. In
the 1980s, for example, Bic entered the men’s shaving business with a disposable razor rather than the
traditional razors offered by Gillette. Pricing actions are of a number of types. They may simply be
meeting the competition, undercutting the competition, a cross parry in order to retaliate, or a widely
announced increase. Alternatively, a pricing action may be a “non-action” – that is not following a
price leader’s announced price increases. Northwest Airlines (now Delta) frequently acted as a spoiler
by not following competitors’ price increases in the early 2000s, causing them to be rescinded.
The nature of the action is the next step. The analyst needs to ask the following questions:
What was the action relative to the potential actions that could have been taken? Was it
more or less severe?
How was the action taken? Was it announced? Quietly implemented?
How did it match or differ from the competitor’s past actions and strategies? Does it
suggest a continuation of past policies or does it mark a change in its strategy or mode of
action?
Does the action follow accepted industry practice? Is the competitor seeking to lead the
industry into a new competitive territory?
21
Lan Brat, “Garbage Haulers Raise Prices: Truce Allows Waste Management, Allied, and Republic to Push Higher.” Wall
Street Journal, September 18, 2008, page B1.
21. 20
Does the competitor expect other firms to follow it?
Is the move aggressive or does it suggest a more “cooperative” way of competing?
It should be noted that competitive actions can be outside of the marketplace. Legal actions are a case in
point. Lawsuits over trademarks and brands are frequent and can tie up a firm’s executive and managers
for long periods of time. Private antitrust suits are another form of competitive action. In both
instances, a deep pocketed competitor can cause great harm to smaller, less wealthy firms.
The Competitor's Response Profile
The likelihood of competitive reactions depends on:
1. The characteristics of the firm taking the action. For example, its size and reputation for
competitiveness.
2. The characteristics of the action. It could be a new market entry or price change.
3. The characteristics of the rival. Its size, performance, or desired reputation.
4. Environmental characteristics such as market turbulence, growth.22
Given some insight into these four factors, the firm or analyst can take some more concrete steps as
shown in Exhibit 5 which portrays a helpful framework for analyzing present and potential competitor
moves and responses. The combination of this analysis of competitors' goals and assumptions together
with competitors' current strategies and capabilities allow one to estimate their response profiles. A
response profile tells one what kinds of actions a competitor is likely to take, if any, in response to the
firm's own actions. Again, what this means is that you have to be able to think like your competitor.
It may sound simplistic, but one of the most powerful determinants of a competitor's future actions is the
set of economic outcomes that would result from each different competitive response. To the extent,
then, that one can calculate the financial results that would flow from different actions, one should be
able to predict competitors' actions.
22
David B. Montgomery, Marian Chapman Moore, and Joel E. Urbany, “Reasoning About Competitive Reactions: Evidence
from Executives,” Marketing Science (Winter 2005) 138-149;
22. 21
One approach is to estimate the competitor’s reactiveness to a competitive move on a particular product
in a given geographical (or other defined market) market and the relative clout it has with which to
respond to competitive move.23
Reactiveness is simply the competitor’s incentive to counter
competitive moves. It can be measured by estimating the contribution (revenues, profits, etc.) that the
product delivers in that market and that it delivers to the business unit of which it is a part adjusted for
the strategic importance of the product and market to the competitor. Take, for example, a move against
P&G’s Tide laundry detergent product in the United States. With its leading market share it contributes
both book profits and strong cash flow to the division of which it is a part and to the corporation as a
whole. As the anchor product of the detergent aisle in supermarkets it is of strategic importance in
maintaining the support of the channel. One can say with reasonable certainty that P&G would exhibit
high reactiveness to any competitive move against Tide. Relative Clout asks which of the competitors is
in a better position to make a strategic move in that specific product/market arena. It is the ability to
fight or to fight back. As with reactiveness, relative clout can be estimated from the competitors’
relative sizes, cash positions, distribution coverage, and the relative number of salespeople.
Theoretically, the issue goes beyond reactiveness and clout. It is more complex. Economists use the
term conjectural variation to refer to what is known about the likelihood and the intensity of competitors'
responses. Specifically, a conjectural variation is what is believed about the relationship between a
firm's own behavior and the corresponding return-maximizing action that will be taken by the
competitor.24
The interesting aspect is that estimating a competitor's actions requires the recognition
that the competitor's decision involves more than simply choosing the action that yields it the highest
relative financial result from among the set of actions available to it. This is because those financial
results themselves are simultaneously affected by the competitor’s own conjectures concerning the
acting firm’s response profile to its response.
23
Ian C. MacMillan, Alexander B. van Putten, and Rita Gunther McGrath, “Global Gamesmanship.” Harvard Business
Review Vol. 81, May 2003, pp 62-71.
24
Raphael Amit, Ian Domowitz, and Chaim Fershtman, "Thinking One Step Ahead: The Use of Conjectures in Competitor Analysis,"
Strategic Management Journal, 9, (1988), 431-442.
23. 22
EXHIBIT 5: Analyzing a Competitor’s Response Profile
FUTURE GOALS
At all levels of management and in
multiple dimensions
CURRENT STRATEGY
How the business is currently
competing
COMPETITOR’S RESPONSE PROFILE
Is the competitor satisfied with its current position?
What likely moves or strategy shifts will the competitor make?
Where is the competitor vulnerable?
What will provoke the greatest and most effective retaliation by the
competitor?
ASSUMPTIONS
Held abut itself and the industry
CAPABILITIES
Both strengths and weaknesses
What Drives the Competitor
What the Competitor is Doing
and Can Do
SOURCE: Michael Porter, Competitive Advantage, (New York: The Free Press, 1980, p. 49.
In more practical terms for the strategist, this means working two moves ahead—estimating whether the
competitor would see its action choices as leading to more or less effective countermoves. Game theory
provides one framework for analyzing the situation. The main point, however, is to attempt to calculate
the relative financial implications of the competitor's possible responses. A second approach suggests
that one analyze the past effectiveness of the competitor's marketing mix elements. As theory would
suggest, a competitor's response to, say, the market entry of a new product will be to adopt the approach
that has shown the greatest response elasticity in the past. 25
SUMMARY
Competitive marketing strategy requires that the strategist position the firm's offerings such that they
minimize direct competition either by choosing vulnerable competitors or by pitting strength against
weakness. The goal of competitor analysis is to provide the strategist with the means needed to achieve
that result.
25
Kevin P. Coyne and John Horn, "Predicting Your Competitor's Reaction," Harvard Business Review, April 2009, pp. 90-
97.