COMPETITION IS
EVERYWHERE
7.1 Targeting Market Segments
7.2 Positioning for Competitive
Advantage
7.3 Competing for Market
Segments
7.4 Learning About the
Competition
TARGETING MARKET
SEGMENTS
GOALS for Lesson 7.1
 Describe how markets can be
segmented by geographic location,
demographic characteristics,
psychographics, product usage, and
benefits derived.
 Explain how to evaluate market
potential and calculate market share.
Identifying Market Segments
 Marketing Segment – a group of
individuals or organizations within a
larger market that share one or more
important characteristics.
 Mass Marketing – aimed at a broad
population of consumers rather than
a narrow segment.
Identifying Market
Segments
 Geographic segmentation –
dividing customers based on where
they live
 Demographic characteristics –
age, gender, race, income, education
 Psychographics – people’s interests
and values
Identifying Market Segments
 Product usage – frequency with
which consumers use a product.
 Benefits derived – divides the
population into groups depending on
the value they receive form the
product or service.
Analyzing Market
Segments
1. Number of potential consumers
2. Interest in the product or service and
other mix elements
3. Money available to make the
purchase
4. Ability to communicate with
consumers through the promotional
mix
Market Segment Analysis
 People who
vacation at ski
resorts
People who like to ski
 People who read
ski magazines
 People with annual
income over
$50,000
Market Potential
Market potential is the total revenue
that can be obtained from the market
segment.
Market Share
Market share is the portion of the total
market potential that each company
expects to get in relation to its
competitors.
Review Activities
 Review Questions, pg. 170, #1-4
 Review Activity, pg. 185, #28, a - e
POSITIONING FOR
COMPETITIVE ADVANTAGE
GOALS for Lesson 7.2
 Explain the various bases for
positioning a product to distinguish it
from the competition.
 Describe the three common
positioning strategies.
Positioning
 To highlight differences between
competitors in the mind of the
consumer that may influence
purchases.
 Market Position – refers to the
unique image of a product or service
in a consumer’s mind relative to
similar competitive offerings.
Bases for Positioning
 Attribute – product characteristics or
features
 Price and quality – desired level of
quality in the product and
establishing an appropriate price
 Use or application – stressing
unique uses
Bases for Positioning
 Product user – encourages use of a
product or service by associating a
personality or type of user with the
product
 Product classification – to
associate with a particular category
 Competitor – demonstrate how they
positioned against competitors
Market Position
Laundry Product A
Laundry Product B
Attribute
Cleans quickly and easily
Leaves fresh scent
Price and Quality
Low price, good value
Higher price for highest quality
Use or Application
Use as pre-wash on tough stains
Use for hand-washing delicates
Product User
Homemaker’s reliable friend
New generation’s discovery
Product Classification
Used by Olympic athletes
Used by professional laundries
Competitor
Gets out dirt Product B can’t
Gentler on clothing than Product A
Positioning Examples
 Attribute - Windex http://www.funnyville.com/funnycommercials/windex.html
 User - Pepsi http://www.pepsinut.com/pepsi_slogans.htm
 Price/Value - Wal-Mart – see favorites
 Classification - Titleist Golf Balls http://www.titleist.com/myt/default.asp?choice=initial
s-420.flv
Selecting a Positioning
Strategy
 Consumer perceptions are the
images consumers have of competing
goods and services in the market
place
 Ex. – Hersey produces the ideal
chocolate bar
 Ex. – BMW the ultimate driving
machine
Selecting a Positioning
Strategy
 Competition – that your product is
superior to the competition
 Ex – Coke vs. Pepsi
 Business environment – changes
that might affect the position of its
products or services
 Ex – golf clubs (new technology)
Positioning Strategy?






Hospital’s Emergency Services
Fast Food
Furniture
Guitar Classes
Cell Phones
Energy Drinks
If you were a business owner, which
positioning technique would be best for
each product or service? Why?
COMPETING FOR MARKET
SEGMENTS
GOALS for Lesson 7.3
 Explain direct vs. indirect competition
and price vs. non-price competition.
 Describe the benefits of competition
to consumers.
Types of Competition for
Positioning
 Direct competition – competition in
a market segment with businesses
that offer the same type of product or
service
 Marriott vs. Hyatt
 McDonalds vs. Burger King
Types of Competition for
Positioning
 Indirect competition – competes
with a product that is outside its
product classification group.
 Ex –
Types of Competition for
Positioning
Price competition – emphasis on price
when companies compete.
Ex – restaurants, grocery stores,
airlines
Types of Competition for
Positioning
Non-price competition – emphasis on
non price factors, quality, brand,
location, or service
Ex – insurance companies, high end
products.
Benefits of Competition
 Consumer receives the best price for
products available.
 Competition encourages improvements in
products with the addition of unique
features and benefits.
 Businesses are always looking for new and
improved products to put into the
marketplace to compete with their
competitors.
 Competition offers consumers the benefit
of a wide variety of products from which to
choose.
Product Development Project –
Element #4
Competition Analysis – 7.2 and 7.3
Who are your competitors?
 Who are your direct competitors?
What are their strengths and
weaknesses? How can you use them
to help your business?
 Who are your indirect competitors?
How are you going to position your
product, what are the bases for the
positioning, why?
LEARNING ABOUT THE
COMPETITION
GOALS for Lesson 7.4
 Discuss the types of information
businesses need to know about their
competitors.
 Describe the kinds of activities
businesses engage in to gain
marketing intelligence.
Types of Information





Price
Distribution
Product/Service planning
Promotion
Competitor’s market position
Sources of Information
Marketing Intelligence
 Attend trade shows
 Talk to customers
 Analyze sales reports
 Ship in competitor’s business
 Subscribe to information services
 Examine competitor’s product
Collecting and Analyzing
Information
 Collection is an organized process
 Objectives
 To identify the strengths and weaknesses
of key competitors
 To assess competitors’ current market
strategies
 To predict competitors’ future actions