Product Planning

Competitive set Category attractiveness 3C’s Analysis

Who defines competition – Company or Customer??

Customer-oriented Who they are – competition for same budget When they use it Why they use it.Bases of Competition I. Marketing-oriented: advertising and promotion Theme/copy strategy Media Distribution Price .benefits sought II.

Geographic .Bases of Competition cont. Resource-oriented Raw materials Employees Financial resources IV. III.

Levels of Competition Beers Ice cream Tea Regular colas Diet lemon limes Diet-Rite cola Wine Diet Pepsi Fast food Fruit flavored colas Diet Coke Product form competition: Diet colas Juices Bottled water Lemon limes Product category competition: Soft drinks Video rentals Baseball cards Coffee Generic competition: Beverages Budget competition: Food and entertainment .

Levels of Competition: Implications for Product Strategy Competitive Level Product Management Task Convince Customers that the Brand is Better than Others Convince Customers that the Product Form is Best in the Category Product Form Product Category Generic Convince Customers that the Product Category is the Best Way to Satisfy Needs Convince Customers that the Generic Benefits are the Most Appropriate Way to Spend their Money Budget .

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 • Frozen cake • “Stir’n Frost cake mix •Individual pie •Quick bread mix Date bar mix • Brownie mix • Homemade cookies Cookie mix • Pillsbury cookie dough • •Hostess cupcakes Pudding mix Local mix • •Jell-O Dzer ta • Custard mix •Tapioca pudding mix •Canned pudding Coffee cake mix • “Snackin’ Cake” mix • • Bakery cookies • Good for a coffee break • In my school work lunch • • Oatmeal cookies •Pepperidge Farm cookies • Between meal snack •Easy to carry with me .

Industry Analysis or Category Attractiveness Analysis .

Aggregate Category Factors • • • • • • Category size Category growth Stage in product life cycle Sales cyclicity Seasonality Profits .

Attractiveness of Market Variables .

Category Attractiveness over the Product Life Cycle Sales Stage of product life cycle Introduction Small Low Low Growth Maturity Large Low Low/high Decline Moderate Negative Time Category size Category growth Category attractiveness Moderate High High Low .

Category Factors • • • • • Threat of new entrants Bargaining power of buyers Bargaining power of suppliers Current category rivalry Pressure from substitutes .

Environmental Factors • • • • • Technological Political Economic Regulatory Social .

Competitor Analysis .

Competitor Analysis System Secondary data Primary data - Key questions: Who are they? What are the competing product features? What do they want? What is their current strategy? Differential competitor advantage analysis i.e. Who has the competitive product advantage? What are they going to do? .

Primary Sources of Competitor Information Investment Bankers Sales Force Consultants/ Specialized Firms Primary Data Employees Suppliers Customers .

Secondary Sources of Competitor Information Consultants Trade Press Customer Communi cations Internal Sources Local Newspapers Annual Reports Patent Filings Internet Promotional Literature Trade Associations Secondary data Business Press News Releases Electronic Databases Government .

Value Chain Firm Infrastructure Human Resource Management Technology Development Procurement Inbound Operations Outbound Logistics Logistics Support Activities Marketing and Sales Service Primary Activities .

continue as is • 2.What now? • What will be competitors’ strategies? • 1. change due to – Changes in marketplace – Changes in management – Changes in financial goals • How to determine new direction? – Management judgment – Simulation • What will be competitors’ reaction to our strategy? .

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