2-1
2
Defining the Competitive Set
McGraw-Hill/Irwin
Copyright © 2005 by The McGraw-Hill Companies, Inc. All rights reserved.
Bases of Competition
I.
Customer-oriented
Who they are – competition for same budget
When they use it
Why they use it- benefits sought
II. Marketing-oriented: advertising and
promotion
Theme/copy strategy
Media
Distribution
Price
2-3
Bases of Competition cont.
III. Resource-oriented
Raw materials
Employees
Financial resources
IV. Geographic
2-4
Levels of Competition
Beers
Ice
cream
Tea
Regular
colas
Diet
lemon
limes
Diet-Rite
cola
Wine
Diet
Pepsi
Diet
Coke
Fast food
Bottled
water
Baseball
cards
Fruit
flavored
colas
Coffee
Lemon
limes
Product form
competition:
Diet colas
Juices
Product
category
Video
competition: rentals
Soft drinks
Generic
competition:
Beverages
Budget
competition:
Food and
entertainment
2-5
Levels of Competition: Implications for Product Strategy
Competitive Level
Product Management Task
Product
Form
Convince Customers that the
Brand is Better than Others
Product
Category
Convince Customers that the
Product Form is Best in the
Category
Generic
Convince Customers that the
Product Category is the Best
Way to Satisfy Needs
Budget
Convince Customers that the
Generic Benefits are the Most
Appropriate Way to Spend
their Money
2-6
Energy Bar Competition
Other Snacks
Healthy Snacks
Snack/Health
Bars
Energy
Bars
Odwalla
Power Bar
Balance Bar
Clif
Nutrigrain Bars
Slimfast Bars
Granola Bars
Fruits
Nuts
Juice
Crackers
Chips
Candy
2-7
PDA Competition
Level of
Competition
Definition
Product form POAs
Full-features
Product category
PIMs
Generic computers
Notebook/
subnotebook
Paper-based solutions
Budget
Business items costing
$100-$1,000
Competitors
Palm Pilot VII
Compaq Aero
Casioplus integrated
communication
Cassio Poeia
Palm III
Royal
Casio PV-100
IBM
Toshiba
Many others
Rolodex
Day Timer
Need Satisfied
Personal information
management plus
PIM only
Other solutions to the
above
Fax machines
Personal copiers
Cellular phones
Furniture (e.g.
Steelcase)
2-8
Managerial Judgment of Competition
Product/Services
Markets
Same
Different
Same
A
B
Different
C
D
2-9
Brand-Switching Matrix
Time t+1
Time t
A
B
C
D
E
A
.6
.2
.2
0
0
B
.2
.3
.4
.1
0
C
.2
.3
.5
0
0
D
0
.1
.1
.5
.3
E
.1
0
0
.4
.5
2-10
Defining Competition with Brand Choice Data
All brands
National
Diet
Cola
Regional
Regular
Family
brand 1
Family
brand 2
Non-Cola
2-11
Defining Competition with Perceptual Mapping
•Moist
•Needs refrigeration
As a formal dessert
•
Bakery cake
Homemade cake • •
• Homemade pie
• Layer cake mix
Takes a long time
• Cheese cake mix
to prepare •
Bundt cake mix •••
• Frozen pie
Chocolate torte mix •
Boston crème pie mix
“Light Style” cake mix
Pudding mix
Local mix •
•Jell-O
Dzer ta •
Custard mix
•Tapioca
pudding mix
•Canned pudding
• Frozen cake
• “Stir’n Frost cake mix
•Individual pie
•Quick bread mix
Coffee cake mix •
“Snackin’ Cake” mix •
•Hostess cupcakes
Date bar mix •
Brownie mix •
Homemade cookies
Cookie mix •
•
Good for a coffee break •
Bakery cookies •
Pillsbury cookie dough •
In my school work lunch •
• Oatmeal cookies
•Pepperidge Farm cookies
• Between meal snack
•Easy to carry with me
2-12
Methods Versus Competition Levels
and Information Required
2-13
Enterprise Competition in Financial Services
2-14