Competition in the Economy
Introduction to Marketing
Kentucky Senator and Representative
 Senator Henry
Clay was right
when he told the
U.S. Senate in
1832, “Of all
human powers
operating on the
affairs of mankind,
none is greater
than that of
competition.”
Competition is…
 Rivalry among sellers trying to achieve such goals
as increasing profits, market share, and sales
volume by varying the elements of the marketing
mix: price, product, distribution, and promotion.
 Sellers compete with other sellers, and buyers
with other buyers
 Keen sellers cut prices to attract buyers, and
buyers reveal their preferences by raising their
offer
Monopolies
 One company that controls the products in a particular
market
 Leaders in a variety of industries worked to create
monopolies in the 1800s—no government regulation
 Railroad and petroleum
 What kinds of regulations does the government impose to
avoid the development of monopolies?
 Conduct research on the internet with a partner to
answer this question
Competition strategies
 Differentiated products may give pioneering suppliers a
“market niche”
 Process innovation to lower costs, which allows producers to
undercut competitors on price
 Advertising that brings one’s wares to buyers’ attention
Buyers must ask…
 What products are available?
 What can we afford?
 How do various products compare, taking prices into
account?