PRODUCT
MANAGEMENT
CHAPTER 4: Defining the competitive set
LEARNING OBJECTIVES:
After studying this chapter, you should be able to:
1.
Understand what is a competitive set
2.
Identify the levels of market competition
3.
Understand the methods of determining
competitors
CHAPTER OUTLINE
1.
2.
3.
Overview of the competitive set
Levels of market competition
Methods of determining competitors
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
Bases of Competition cont.
III.
Resource-oriented
Raw materials
Employees
Financial resources
IV.
Geographic
Levels of Competitions


Def : The proximity of other products to the physical
attributes of the product in question
In terms of product form, product category,
generic competition and budget competition
Levels of Competition
Beers
Ice
cream
Tea
Regular
colas
Diet-Rite
cola
Wine
Diet
Pepsi
Fast food
Bottled
water
Baseball
cards
Fruit
flavore
d colas
Diet
Coke
Lemon
limes
Coffee
Diet
lemon
limes
Product form
competition:
Diet colas
Juices
Product
category
Video
competition: rentals
Soft drinks
Generic
competition:
Beverages Budget
competition:
Food and
entertainment
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
Methods For Determining
Competitors


Managerial judgment
Customer-based Measures
Managerial Judgment




Experience
Salesperson call reports
Distributors
Other company sources
Managerial judgment
Markets
Product/Services
Same
Different
Same
A
B
Different
C
D
Customer-Based Measures


Behavioral data
Customer Judgements
Behavioral Data
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
Customer Judgments




Judged overall similarity
Similarity within consideration
Product deletion
Substitution in use