Chapter 3: Company and Competitors
Disclaimers:
All logos, photos, etc. used in this presentation are the property of their respective copyright owners and are used here for educational purposes only.
Some material adapted from: Lehmann & Winer, “Analysis for Marketing Planning”, 7th ed
Some material adapted from: Kotler & Keller, “Marketing Management”, 13th ed
See book: Sorger, “Marketing Planning” for full bibliography
•
•
•
•
Marketing Planning © Stephan Sorger 2010: www.stephansorger.com; Ch. 3
Company Analysis: Identity/ Focus/ Culture
Term
Description
Identity
What makes the business different from others
Focus
Emphasis on a particular market segment or product
Culture
Shared experiences, beliefs, and norms
that characterize an organization (Kotler, MM)
The movie “Office Space”
portrayed a company
with a distinct culture
Marketing Planning © Stephan Sorger 2010: www.stephansorger.com; Ch. 3 Situation Anyl. II: 3.3
Company Analysis: Go To Market Approach
Term
Description
Go-to-Market
Delivery mechanism for firm’s value proposition
Value Proposition
Benefit firm delivers through its offering
Delivery Mechanism
Distribution channels used to deliver offering
Example: UPS Store vs. drop box vs. truck
Methods to guide customers through sales process
Initial contact  Fulfillment
UPS goes to market through several delivery mechanisms
Marketing Planning © Stephan Sorger 2010: www.stephansorger.com; Ch. 3 Situation Anyl. II: 3.4
Company Analysis: Company Strengths
Category
Description
People
Leadership, Skill, Knowledge, Background, Character
Steve Jobs vs. John Sculley
Products/ Services
Competitive advantage through technology: Subaru
Distinguishing features: Apple
Value-added services: Nordstrom, Lexus
Company
Reputation: L.L. Bean
Customer Service: Amazon.com
Customers
Loyal, happy, committed customer base: Buick
Examples of great people, great products, and great service
Marketing Planning © Stephan Sorger 2010: www.stephansorger.com; Ch. 3 Situation Anyl. II: 3.5
Company Analysis: Company Weaknesses
Category
Description
People
Inexperience, Poor judgment, Unethical: Madoff
Products/ Services
Poor design: Microsoft Vista
Company
Reputation: AIG
Customers
Unhappy customers: Moving companies, …
Examples of people, products, and service that definitely are not strengths
Marketing Planning © Stephan Sorger 2010: www.stephansorger.com; Ch. 3 Situation Anyl. II: 3.6
SWOT Analysis
Helpful to Organization
Strengths
Internal
to organization
Harmful to Organization
Weaknesses
- Dominant player
- Huge installed base
- Vista
- Perception of bloatware
Opportunities
Threats
External
- Trend: Portability
to organization
- Trend: Social Networking
- Trend: Cloud Computing
- Competitor: Ubuntu (Linux)*
* Asymmetrical threat: Microsoft more of a threat to Ubuntu than vice versa
Marketing Planning © Stephan Sorger 2010: www.stephansorger.com; Ch. 3 Situation Anyl. II: 3.7
Competitor Analysis: Approach
Competitor
Information
Goals:
• Identity/ Focus/
Culture
• Go to market
approach
• SWOT
• Market share
• Perceptual data
• Anticipated
strategies
Competitive
Research
Secondary
Primary
Competitive
Analysis
Competitive
Results
• Identify
Competitors
• Calculate
Market share
• Build SWOT
• Build profiles
• Summary table
• SWOT for each
competitor
• Perceptual
map
• Anticipated
strategies and
counterstrategies
Marketing Planning © Stephan Sorger 2010: www.stephansorger.com; Ch. 3 Situation Anyl. II: 3.8
Secondary Research: Sources
Source
Description
Analyst reports
Industry analyst reports on state of market
Example: Gartner: Magic Quadrant report: $1,995
Magazines, e-zines; gives insider look at market
Example: InfoWorld, CNET.com, CIO, InfoWeek
General business magazines, e-zines
Example: Fortune, Business Week
Gives opinionated view of activities in market
Example: http://blogs.gartner.com
Competitive collateral can give positioning hints
Example: Download brochure from website
Competitors post releases on new events
Example: See source of quote for targeted role
Public companies must issue financial information
Example: CEO outlook often suggests next steps
Government puts out wealth of info, especially B2B
Example: NAICS info, Census info
Product details, Customer details, Executive team
Trade press
Business press
Blogs
Collateral
Press Releases
Annual Reports/10Ks
Government
Competitor website
Marketing Planning © Stephan Sorger 2010: www.stephansorger.com; Ch. 3 Situation Anyl. II: 3.9
Primary Research: Sources
Source
Description
Customers
Ask customers formerly using competitor product
Caveat: Some might be limited by NDA agreements
Ask sales force about rumors on competition
Will be familiar with competitors’ sales pitches
Non-sales employees can also give market insight
Interview many to get multiple viewpoints
Technicians in field often see evidence of competitors
Example: Customer installed competitor’s system
Investors/boards have financial knowledge
Tip: Look at competitor website to see investors
Major suppliers familiar with all competitors
Caveat: Might be reluctant to share knowledge
Can provide specialized commissioned reports
Meet specific needs, but very expensive
Sales Force
Employees
Field Service
Investment bankers
Suppliers
Consulting firms
Marketing Planning © Stephan Sorger 2010: www.stephansorger.com; Ch. 3 Situation Anyl. II: 3.10
Competition Identification: Four Levels of Competition
Level
Description
Direct Competitors
Near-identical products/ services
Often companies are arch rivals
Example: Hertz vs. Avis rental cars
Category: Rental cars
Indirect Competitors
Similar, but not identical products/ services
Example: Hertz vs. Taxi
Category: Hired transportation
Need-based Competitors
Products/ services that satisfy basic need
Example: Hertz vs. Public Transit
Category: Traveler’s transportation
Budget Competitors
Products/ services with same budget
Example: Hertz vs. Seeing Broadway show
(Stay at airport hotel and save money)
Category: Traveler expenses under $200
Marketing Planning © Stephan Sorger 2010: www.stephansorger.com; Ch. 3 Situation Anyl. II: 3.11
Four Levels of Competition: Competition Identification
Level
Description
Direct Competitors
Near-identical products/ services
1 Category: Consumer-based PC CPUs
2 Possibilities: Intel, AMD, Motorola
3 Threat: AMD
Indirect Competitors
Similar, but not identical products/ services
Category: Computer components
Possibilities: High-speed RAM, SSD, GPU
Threat: nVidia, ATI graphics cards
Need-based Competitors
Products/ services that satisfy basic need
Category: Consumer-based computers
Possibilities: BlackBerry, iPhone, Cloud
Threat: Next-generation super smart phone
Budget Competitors
Products/ services with same budget
Category: Consumer electronics < $250
Possibilities: Game console, secure networks
Threat: Secure networking
Marketing Planning © Stephan Sorger 2010: www.stephansorger.com; Ch. 3 Situation Anyl. II: 3.12
Competitive Analysis: Market Share Estimation
Term
Description
Market Share
Proportion of market served by company
Calculation
Share(A) =
Secondary Research
Purchase existing industry reports that predict shares
Primary Research
Commission specialty firm to determine share
Revenue(A)
.
Revenue of Entire Market
Here, “PC Guy” explains to “Mac Guy”
how big the PC market share is
Marketing Planning © Stephan Sorger 2010: www.stephansorger.com; Ch. 3 Situation Anyl. II: 3.13
Market Share Research
Term
Description
B2C (Consumer)
Market research for business to consumer goods
Examples: Shampoo, Appliances, Bread
Firms: Nielsen, Dun & Bradstreet, Arbitron, others
B2B (Business)
Market research for business to business goods
Examples: Welding machines, Enterprise software
Firms: Gartner, Forrester, IDC, AMR, others
Much information available for free
B2C Analyst Firms
B2B Analyst Firms
Example of free research
Marketing Planning © Stephan Sorger 2010: www.stephansorger.com; Ch. 3 Situation Anyl. II: 3.14
Competitive Analysis: Predicting Future Strategies
Value Chain Model for Sources of Competitive Advantage
Firm’s Infrastructure
Human Resource Management
Technological Development
Procurement
Inbound
Outbound Marketing
Operations
Logistics
Logistics & Sales
(Delivery)
Margin
Service
Marketing Planning © Stephan Sorger 2010: www.stephansorger.com; Ch. 3 Situation Anyl. II: 3.15
Competitive Analysis: Predicting Future Strategies
Executive Team Profiles
Example: Yahoo
Autodesk - Grew revenues
Sun, Digital, 3M
On board of Cisco
On board of Intel
Skadden, el al, LLP
M & A specialist
Symantec
Adobe
McKinsey
M & A specialist
NetApp
Sun
On board of Cisco
Marketing Planning © Stephan Sorger 2010: www.stephansorger.com; Ch. 3 Situation Anyl. II: 3.16
General Competitor Attack & Counter-Attack Strategies
Encirclement Attack (Overwhelm enemy)
Bank of America vs. other banks: 17,000 ATMs
Counterattack: Differentiation: Credit Unions
Frontal Attack (Attack strength)
Attacker
Microsoft vs. Google (Bing)
Counterattacks:
Invade attacker territory: FedEx ground delivery
Diversification: BP: “Oil”  “Energy”
Contraction: Sara Lee: Spin off Hanes
Defender
Flank Attack (Exploit weakness)
Sunlight vs. Cascade: Spots on dishes
Counterattack: Fix weakness, Court action
Guerilla Attack (Random attacks)
Blog posts against major firms
Counterattack: Vigilant monitoring
Bypass Attack (Expand into new areas)
New products: Pepsi launched Aquafina before Coke could launch Dasani
New geographies: Starbucks expanded into China before competitors
New technologies: Nintendo leapfrogged Sony with Wii
(1) Adapted from Kotler & Keller, “Marketing Management”, 13th ed, Pearson, 2009. Page 306
Marketing Planning © Stephan Sorger 2010: www.stephansorger.com; Ch. 3 Situation Anyl. II: 3.17
Competitive Analysis Results: Comparison Table
Criteria
Ben & Jerry’s
Objectives
Market share=38% Market share=42% Get foothold
Overtake H-D
Increase lead
Get foothold
Strategies
Promotions
Indulgence
Low price
Go upscale
Differential Adv.
Social respons.
Global brand
Extend coffee
Luxury symbol
Expected future
2000: purchased
by Unilever
Strong finances;
Spend on ads
New flavors;
Use Nestle conn.
to build distrib.
Expand flavors
outside of coffee
Emphasize
luxury
Haagen-Dazs
Starbucks
Godiva
Marketing Planning © Stephan Sorger 2010: www.stephansorger.com; Ch. 3 Situation Anyl. II: 3.18
Competitive Analysis Results: Perceptual Map
- Perceptual Maps: Show how brands compare
- Axes labels and placement through focus groups
- Example: Computer operating systems
- Evaluation criteria:
Interoperability,
+ Ease of Use:
Reliability,
Intuitive
Scalability,
Security
Ease of Use,
Affordability
- Interoperability:
Technical Expertise
+ Interoperability:
Plug n’ Play
- Ease of Use:
Frustrating
Marketing Planning © Stephan Sorger 2010: www.stephansorger.com; Ch. 3 Situation Anyl. II: 3.19
Market Research: Approach
Define
Problem &
Research
Objectives
Develop
Research
Plan
Gather
Data
Analyze
Data
Present
Findings
Make
Decision
Example:
Should American Airlines introduce Internet service?
Too general; Change to:
1. Should American offer an Internet connection?
2. If so, should it be on First Class only?
3. What price should it charge?
4. On what planes and routes should it offer the service?
Important: Select Evaluation Criteria for Decision!
Maximize Revenue? Profit? ROI? Customer Satisfaction?
(1) Kotler & Keller, “Marketing Management”, 13th ed, Pearson, 2009. Pages 91 - 103
Marketing Planning © Stephan Sorger 2010: www.stephansorger.com; Ch. 3 Situation Anyl. II: 3.20
Market Research: Development of Research Plan
Contact Method
Data Sources
- Mail questionnaire
- Telephone interview
- Personal interview
- Online interview
Sampling Plan
- Sampling unit
- Sample size
- Sampling procedure
- Secondary
- Primary
Research
Plan
Research Instruments
- Questionnaires
- Qualitative Measures
- Technological Devices
Research Approaches
- Observational Research
- Ethnographic Research
- Focus Group Research
- Survey Research
- Behavioral Data
- Experimental Research
(1) Kotler & Keller, “Marketing Management”, 13th ed, Pearson, 2009. Pages 91 - 103
Marketing Planning © Stephan Sorger 2010: www.stephansorger.com; Ch. 3 Situation Anyl. II: 3.21
Market Research: Research Approaches
Approach
Description
Observational
Watch what people do with product
Example: Observe customer using Quicken program
Ethnographic
Similar to anthropological research
Immerse into consumers’ lives to understand them
Bank of America found that most women round up
Result was “Keep the Change” program
Focus Group
Gathering of 6 – 10 people with moderator
Non-random group; typically heavy users of product
Goal: Understand motives behind behaviors
Problems: Seen as artificial; dependent on moderator
Behavioral
Analyze records of behavior
Supermarket scanning data, Online purchases
Experimental
Scientifically valid research
Set up matched groups: Target group vs. Control group
Are differences in observed responses statistically significant?
Survey
See next slide
Marketing Planning © Stephan Sorger 2010: www.stephansorger.com; Ch. 3 Situation Anyl. II: 3.22
Market Research: Surveys & Research Instruments
Approach
Description
Surveys
Goal: Measure opinions of large group using instrument
Instruments
Qualitative measures: Unstructured, open-ended questions
Usually conducted one-on-one with respondent
Questionnaires: Closed-end and Open-end questions
Usually closed-end questions for online surveys
Technological devices: Electronic means to gather data
Example: Galvanometer to measure response to ad
Approach
Typical: Do qualitative study first to small group of respondents
Follow up with questionnaire to large group
Online
Popular: www.surveymonkey.com; Effective and free
Design survey, Collect responses, Analyze results
Marketing Planning © Stephan Sorger 2010: www.stephansorger.com; Ch. 3 Situation Anyl. II: 3.23
Questionnaire Questions: Closed-End
Name
Description
Example
Dichotomous
2 possible answers
Are you male or female?
Male___ Female_X_
Multiple choice
3+ possible answers
How many classes are you taking?
1_X_ 2___ 3 or more___
Semantic Differential Scale with bipolar words
How much homework is assigned?
Too little------------------X----Too much
Likert Scale
Agreement/Disagreement
Small class sizes permit more focus
Strongly Disagree__ Disagree__ Not Sure__
Agree__ Strongly Agree__
Importance Scale
Rates importance
In-class videos to me are:
Extremely important__ Very important__
Somewhat important __Not very important __
Not important__
Rating Scale
Rates Poor to Excellent
The teaching quality of this course is:
Poor__ Fair__ Good__ Very Good__ Exc.__
Intention to Buy
Rates Intent to Buy
If the same instructor offered another course:
Not buy__ Probably not buy__ Not sure__
Probably buy__ Definitely buy__
Marketing Planning © Stephan Sorger 2010: www.stephansorger.com; Ch. 3 Situation Anyl. II: 3.24
Questionnaire Questions: Open-End
Name
Description
Example
Unstructured
Discussion question
What is your opinion of this course?
Answer_______________________________
Word Association
Mention first word you think of What comes to mind when you think of:
(Strength of association)
This class_____________________________
The textbook___________________________
The teacher____________________________
Sentence completion Complete the sentence
When I pick a class, I look for:
______________________________________
Story completion
Complete the story
“I went to last week’s class, and noticed that
we didn’t have a video. I felt the following way:”
______________________________________
Balloon picture
Fill in the empty balloon
Fill in the balloon for the picture on the left
TAT
Thematic Apperception Test
Write a story about the picture on the right
Balloon Test Picture:
TAT Story Picture:
Marketing Planning © Stephan Sorger 2010: www.stephansorger.com; Ch. 3 Situation Anyl. II: 3.25
Market Research: Sampling Plan
Approach
Description
Sampling Unit Who should we survey?
Generally best to survey target market
Sample Size
How many people should we survey?
Large sample sizes More statistically significant
Generally, best to sample at least 1% of population (min. 20)
Procedure
How should we choose the respondents?
Probability sample: More accurate
Allows confidence limits to be calculated for sampling error
Makes sample more representative
Non-probability sample: Cheaper and faster
Market research sampling procedures
are often complicated
Marketing Planning © Stephan Sorger 2010: www.stephansorger.com; Ch. 3 Situation Anyl. II: 3.26
Market Research: Probability and Non-Probability Samples
Probability Samples
Term
Description
Simple Random Sample
Every member has an equal chance
Example: Picking phone numbers at random
Stratified Random Sample
Divide population into groups (such as age)
then pick samples from the groups
Cluster (Area) Sample
Divide population into areas (like city blocks)
then pick samples from the areas
Simple Random Sample
Stratified Random Sample
Cluster (Area) Sample
Marketing Planning © Stephan Sorger 2010: www.stephansorger.com; Ch. 3 Situation Anyl. II: 3.27
Market Research: Probability and Non-Probability Samples
Non-Probability Samples
Term
Description
Convenience Sample
Select most accessible population member
Example: Next 10 people walking into office
Judgment Sample
Select those likely to give accurate information
Example: Members of online product forum
Quota Sample
Select certain number of people per category
Example: 5 people in each age group
Convenience Sample
Judgment Sample
Quota Sample:
Pick 1 of each group
Marketing Planning © Stephan Sorger 2010: www.stephansorger.com; Ch. 3 Situation Anyl. II: 3.28
Market Research: Analyzing Information
Procedure
Description
Processing
Cleansing: Delete/ correct known bad data
Coding: Assigning numbers to open-end questions
Example: “Why selected?”: Price=1; Quality=2
Tabulation
Frequency table: # of respondents for each answer
Cross-tabulations: Frequency counts with 2+ variables
Statistics
Mean, Mode, Standard Deviation, Variance, Range
Tests: Chi-square; K-S test (Goodness of Fit)
Tests: Z-Test (Rating significantly higher than mean)
Tests: t-Test (Like Z-test, but for small sample sizes)
One-way tabulation
Cross-tabulation
What OS do you prefer?
What OS do you prefer?
Operating System
Total
Operating System
Total
18-25
26-35
35-50
Windows 7
Windows Vista
Windows XP
Apple OSX
Linux
38%
8%
22%
16%
16%
Windows 7
Windows Vista
Windows XP
Apple OSX
Linux
38%
8%
22%
16%
16%
14%
1%
2%
7%
5%
13%
3%
5%
5%
5%
11%
4%
15%
4%
6%
Marketing Planning © Stephan Sorger 2010: www.stephansorger.com; Ch. 3 Situation Anyl. II: 3.29
Market Research: Presenting the Findings
Topic
Description
Objectives
State background and objectives of research
Methodology
How research was conducted
Qualitative: What questions? How asked? How many people?
Quantitative: How was survey conducted? How many people?
Findings
Graphs helpful for displaying research results
Bar Chart: Good for showing respondent preference
Pie Chart: Good for showing parts of a whole
Histogram: Good for showing frequency of results
Bar Chart
“Most users prefer Windows 7”
Pie Chart
“40% of students use Gmail”
Histogram (Frequency Chart)
“Most users are 25-35”
Windows 7
XP
Linux
Apple OSX
Vista
Age
Marketing Planning © Stephan Sorger 2010: www.stephansorger.com; Ch. 3 Situation Anyl. II: 3.30
Market Research: Making the Decision
Topic
Description
Statistics
Tests will indicate degree of confidence in data
Solutions
Generate multiple solutions to solve problem at hand
Criteria
Review evaluation criteria set forth in beginning of research
Select solution that maximizes decision criteria
Triangulate
Use multiple data points to confirm decision
Similar to how sailors locate their position from multiple points
Avoid relying on just one data point
Use triangulation to confirm
decision using multiple
data points
Marketing Planning © Stephan Sorger 2010: www.stephansorger.com; Ch. 3 Situation Anyl. II: 3.31