Poma PPT Slides-Chapter 18-180883

Principles of Marketing: An Asian
Perspective
Instructor Supplements
• Created by Geoffrey da Silva
Creating Competitive Advantage
3 © 2012 Principles of Marketing: An Asian Perspective

18
Chapter 18 Outline
18.1 Competitor Analysis

18.2 Competitive Strategies
18.3 Balancing Customer and Competitor Orientations

Opening Case
Hyundai: Hitting the Accelerator When Competitors Throttle
Down
Hyundai’s marketing
hustle and aggressive
competitive marketing
strategy have made it the
world’s fastest-growing
major car maker. When
rivals throttled down on
marketing, Hyundai hit the
accelerator

18.1
Competitor Analysis
6
18.1
© 2012 Principles of Marketing: An Asian Perspective
Competitive advantage
Competitive advantage requires

delivering more value and
satisfaction to target consumers
than do competitors.
Competitive marketing
strategies are how companies
analyze their competitors and
develop value-based strategies for
profitable customer relationships.

•Today’s companies face their toughest competition ever.
•To win in today’s marketplace, companies must become adept not

just in managing products, but in managing customer relationships in
the face of determined competition.
•Building
profitable customer relationships and gaining competitive
advantage requires delivering more value and satisfaction to target
consumers than competitors do.
•Customers see competitive advantages as customer advantages.

•Thefirst step is competitor analysis—the process of identifying,

assessing, and selecting key competitors.
•The second step is developing competitive marketing strategies

that strongly position the company against competitors and give it the
greatest possible competitive advantage.

Competitor Analysis

Steps in analyzing competitors
As shown in Figure 18.1, competitor analysis involves first identifying

and assessing competitors and then selecting which competitors to
attack or avoid.

Identifying Competitors

Identifying Competitors
•At the narrowest level, a company can define its competitors as other
companies offering similar products and services to the same
customers at similar prices.
•But companies actually face a much wider range of competitors. The
company might define competitors as all firms making the same
product or class of products.
•Even more broadly, competitors might include all companies making
products that supply the same service.
•Finally, and still more broadly, competitors might include all
companies that compete for the same consumer dollars.

Identifying competitors: hotel example
•Companies actually face a much wider range of competitors.
•Thecompany might define competitors as all firms making the same

product or class of products.
•Thus, Shangri-La Hotel would see itself as competing against all other
hotels.
•Evenmore broadly, competitors might include all companies making

products that supply the same service.

Identifying competitors: hotel example
•Here, Shangri-La Hotel would see itself competing not only against
other hotels but also against anyone who supplies rooms for weary
travellers.
•Finally,
and still more broadly, competitors might include all
companies that compete for the same consumer dollars. Here,
Shangri-La Hotel would see itself competing with travel and leisure
services, from cruises and summer homes to vacations abroad.

Identifying competitors
•Companies must avoid “competitor myopia.” A company is more likely

to be “buried” by its latent competitors than its current ones.
•Companies can identify their competitors from the industry point of

view. A company must understand the competitive patterns in its
industry if it hopes to be an effective “player” in that industry.

Identifying competitors
•Companies can also identify competitors from a market point of view.

Here they define competitors as companies that are trying to satisfy
the same customer need or build relationships with the same
customer group.
•See Figure 18.2.
•Ingeneral, the market concept of competition opens the company’s

eyes to a broader set of actual and potential competitors.

Avoiding competitor myopia
Encyclopædia Britannica has to look

beyond print media and see
competition in the digital market.

Perspectives in identifying competition

Assess competitors
•Objectives
•Strategy
•Strengths/
Weaknesses
•Reaction

Determining Competitors’ Objectives
•Each competitor has a mix of objectives.
•The company wants to know the relative importance that a competitor

places on current profitability, market share growth, cash flow,
technological leadership, service leadership, and other goals.
•Knowing a competitor’s mix of objectives reveals whether the competitor is

satisfied with its current situation and how it might react to different
competitive actions.
•Acompany must also monitor its competitors’ objectives for various

segments.

Identifying Competitors’ Strategies
•The more that one firm’s strategy resembles another firm’s strategy,
the more the two firms compete. A strategic group is a group of
firms in an industry following the same or a similar strategy in a given
target market.
•Some important insights emerge from identifying strategic groups.

For example, if a company enters one of the groups, the members of
that group become its key competitors.

Pioneer offers a narrower line of

high-quality electronics such as
DVD-related products, home stereo
systems, and car audio equipment.
Its vision is to pursue innovation
that provides pure emotional
entertainment.

•Although competition is intense within a strategic group, there is also

rivalry among groups.
– Some of the strategic groups may appeal to overlapping customer
segments.
– The customers may not see much difference in the offers of
different groups.
– Members of one strategic group might expand into new strategy
segments.
•The company needs to look at all of the dimensions that identify

strategic groups within the industry.

Assessing Competitors’ Strengths and Weaknesses
•Marketersneed to assess each competitor’s strengths and

weaknesses carefully in order to answer the critical question: What
can our competitors do?
•As a first step, companies can gather data on each competitor’s goals,
strategies, and performance over the last few years.
•Companiesnormally learn about their competitors’ strengths and

weaknesses through secondary data, personal experience, and word
of mouth.

•They can conduct primary marketing research with customers,

suppliers, and dealers.
•They can benchmark themselves against other firms, comparing the

company’s products and processes to those of competitors or leading
firms in other industries to find ways to improve quality and
performance.

Trade shows like the annual Consumer

Electronics Show provide an arena for
companies to “check out” what their
competitors are offering.

Estimating Competitors’ Reactions
•Next, the company wants to know: What will our competitors do?
•A competitor’s objectives, strategies, and strengths and weaknesses

go a long way toward explaining its likely actions. They also suggest
its likely reactions to company moves such as price cuts, promotion
increases, or new-product introductions.
•Inaddition, each competitor has a certain philosophy of doing

business, a certain internal culture, and guiding beliefs.
•Each competitor reacts differently.

Choose competitors
Strong vs. Weak
Close vs. Distant
Good vs. Bad

Selecting Competitors to Attack and Avoid
•Strong or Weak Competitors
•The company can focus on one of several classes of competitors.
•Most companies prefer to compete against weak competitors. This

requires fewer resources and less time. But in the process, the firm
may gain little.

Customer Value Analysis
•Auseful tool for assessing competitor strengths and weaknesses is

customer value analysis.
•The aim of customer value analysis is to determine the benefits that

target customers value and how customers rate the relative value of
various competitors’ offers.
•The key to gaining competitive advantage is to take each customer

segment and examine how the company’s offer compares to that of its
major competitor. The company is searching for that “strategic sweet
spot.”

Customer Value Analysis
To gain competitive advantage, a

company must find the sweet spot
where it satisfies consumer needs
better than its rivals.

Close or Distant Competitors
•Mostcompanies will compete with close competitors—those that

resemble them the most—rather than distant competitors.
•At the same time, the company may want to avoid trying to “destroy”
a close competitor

Close or Distant Competitors
After driving smaller competitors from

the market, Bausch & Lomb faces larger,
more resourceful ones, such as Johnson
& Johnson’s Vistakon division. With
Vistakon’s Acuvue lenses leading the
way, J&J is now the top U.S. contact lens
maker. (www.acuvue.com)

Good or Bad Competitors?
•The existence of competitors results in several strategic benefits:

– They may share the costs of market and product development
and help to legitimize new technologies.
– They may serve less-attractive segments or lead to more product
differentiation.
– Competitors may help increase total demand.

Good or Bad Competitors?
• However, a company may not view all of its competitors as

beneficial. An industry often contains “good” competitors and “bad”
competitors.
• Good competitors play by the rules of the industry.
• Bad competitors break the rules. They try to buy share rather than
earn it, take large risks, and in general shake up the industry

• Good or Bad Competitors?
Digital music download services such as Yahoo!

Music Unlimited, Napster, and Sony Connect see
Apple as a bad competitor. Music downloaded
from their sites can’t be played on Apple’s iPod,
and music from Apple’s iTunes Music Store will
play only on an iPod.
Uncontested market space

Finding Uncontested Market Spaces
•Rather than competing head to head with established competitors,

many companies seek out unoccupied positions in uncontested market
spaces.
•Theytry to create products and services for which there are no direct
competitors.
•Blue Ocean Strategy

Blue Ocean Strategy
•Companies try to create products and services for which there are no
direct competitors.
•Called a “blue ocean strategy,” the goal is to make competition
irrelevant.
•Companies engaging in head-to-head competition in search of
profitable growth, have flocked for competitive advantage, battled
over market share, and struggled for differentiation.
•Yet, in today’s overcrowded industries, competing head-on results in
a bloody “red ocean” of rivals fighting over a shrinking profit pool.

Blue Ocean Strategy
•In their book, Blue Ocean Strategy, two marketing professors contend
that although most companies compete within such red oceans, the
strategy isn’t likely to create profitable growth in the future.
•Tomorrow’s leading companies will succeed not by battling
competitors but by creating “blue oceans” of uncontested
marketspace.
•Such strategic moves—termed “value innovation”—create powerful
leaps in value for both the firm and its buyers, creating all new
demand and rendering rivals obsolete.
•By creating and capturing blue oceans, companies can largely take
rivals out of the picture.

Blue Ocean Strategy
Cirque du Soleil reinvented the

circus, finding an uncontested
marketspace that created new
demand and rendered rivals
irrelevant.


Competitive intelligence system

Designing a Competitive Intelligence System
•The competitive intelligence system:

– Identifies the vital types of competitive information and the best
sources of this information
– Continuously collects information from the field and from published
data
– Checks the information for validity and reliability, interprets it, and
organizes it in an appropriate way
– Sends key information to relevant decision makers and responds to
inquiries from managers about competitors
• Smaller companies that cannot afford to set up formal competitive
intelligence offices can assign specific executives to watch specific
competitors.

18.2
Competitive Strategies
18.2
• Having identified and evaluated its major competitors, the company

must now design broad competitive marketing strategies that can
help it gain competitive advantage through superior customer
value.
• But what broad marketing strategies might the company use?
• Which ones are best for a particular company, or for the company’s
different divisions and products?

Strategy approaches

Approaches to Marketing Strategy
• No one strategy is best for all companies. Each company must

determine what makes the most sense given its position in the
industry and its objectives, opportunities, and resources.
• Even within a company, different strategies may be required for

different businesses or products.
• Many large firms develop formal competitive marketing strategies

and implement them religiously. However, other companies develop
strategy in a less formal and orderly fashion.

ENTREPRENEURIAL
FORMULATED
INTREPRENEURIAL

Approaches to marketing strategy and practice often pass through

three stages.
I. Entrepreneurial marketing: Most companies are started by
individuals who live by their wits. They visualize an opportunity,
construct flexible strategies on the backs of envelopes, and knock
on every door to gain attention.
II.Formulated marketing: As small companies achieve success, they
inevitably move toward more-formulated marketing. They develop
formal marketing strategies and adhere to them closely.

III.Intrepreneurial marketing: Many large and mature companies get

stuck in formulated marketing. These companies sometimes lose
the marketing creativity and passion that they had at the start.
They need to reestablish within their companies the entrepreneurial
spirit and actions that made them successful in the first place.

Some companies such as Virgin Atlantic Airways

break many of the “rules” of marketing strategy
and succeed. Here, the company uses air-
sickness bags to highlight how the Virgin Atlantic
experience will “rinse that bad taste of flying
right out of your mouth.”

Basic strategies
•OVERALL COST LEADERSHIP
•DIFFERENTIATION
•FOCUS
Three decades ago, Michael Porter

suggested four basic competitive
•MIDDLE OF THE ROAD
positioning strategies that companies
can follow—three winning strategies and
one losing one.

Cost leadership
Overall cost
leadership: The
company works hard
to achieve the lowest
production and
distribution costs

Differentiation
Differentiation: The
company concentrates on
creating a highly
differentiated product line
and marketing program.

Focus
Focus: The company

focuses on serving a few
market segments well
rather than going after the
whole market.

Middle of the Road
The losing strategy is:

Middle-of-the-road: The
company tries to be good
on all strategic counts, but
ends up being not very
good at anything

New Strategies
•OPERATIONAL EXCELLENCE
•CUSTOMER INTIMACY
•PRODUCT LEADERSHIP

Value Disciplines
•More recently, a new classification of competitive marketing

strategies has been offered. It suggested companies gain leadership
positions by delivering superior value to their customers.
•Companies can pursue any of three strategies—called value

disciplines—for delivering superior customer value

Value Disciplines
I.Operational excellence: The company provides superior value by

leading its industry in price and convenience.
II.Customer intimacy: The company provides superior value by
precisely segmenting its markets and tailoring its products or services
to match exactly the needs of targeted customers.
III.Product leadership: The company provides superior value by
offering a continuous stream of leading-edge products or services.
•Some companies successfully pursue more than one value discipline
at the same time. However, such companies are rare—few firms can
be the best at more than one of these disciplines.

Operational Excellence
Acer delivers superior customer value

through operational excellence. It
provides reliable, good-quality products
and yet reduces costs through an
efficient system.

Customer Intimacy
Companies provide superior

value by tailoring its products
or services to match exactly
the needs of targeted
customers.

Product Leadership

Competitive Positions
Market Market
leader challenger
strategies strategies
Market Market
follower nicher
strategies strategies

Competitive Positions
•Firms competing in a given target market, at any point in time, differ

in their objectives and resources.
•Firms can base their competitive strategies on the roles they play in
the target market—market leader (40 percent), market
challenger (30 percent), market follower (20 percent), or market
nicher (10 percent).

Competitive market positions and roles

Reviewing the Key Concepts
Discuss the need to understand competitors as well as customers

through competitor analysis.

Strategies for Market Leaders, Challengers, Followers, and

Nichers
Market Leader Market Challenger Market Follower Market Nicher

Strategies Strategies Strategies Strategies
Specialize by
Expand total market Full frontal attack Follow closely customer, market,
quality, price, service
Protect market share Indirect attack Follow at a distance Multiple niching
Expand market share
Table 18.1 shows specific marketing strategies that are available to market
leaders, challengers, followers, and nichers. Remember, however, that these
classifications often do not apply to a whole company, but only to its
position in a specific industry.

Strategies: LEADER
•Expand total demand

•Protect current market
•Expand market share

Market Leader Strategies
•Most industries contain an acknowledged market leader. Competitors

focus on the leader as a company to challenge, imitate, or avoid.
•To remain number one, leading firms can take any of three actions.
1. They can find ways to expand total demand.
2. They can protect their current market share through good
defensive and offensive actions.
3. They can try to expand their market share further, even if
market size remains constant.

Market Leader Strategies: Expanding Total Demand
•Theleading firm normally gains the most when the total market
expands.
•Market leaders can expand the market by developing new users, new
uses, and more usage of its products.

Expanding Total Demand: Finding New Users
Shiseido has expanded into a new market—skin

care products for men.
(www.shiseido.co.jp/men/html)

Expanding Total Demand: Finding New Users
In some schools, the Nintendo DS

is used as a teaching device, a
new use of the product on top of
mere entertainment. This helps
Nintendo expand total demand for
its product.

Expanding Total Demand: Creating More Usage
Campbell urges its Asian users to make soup and other

products more often by featuring new recipes on its Web site.
(www.campbellsoup.com.sg and www.campbellsoup.com.hk)
Protecting Market Share

•While trying to expand total market size, the leading firm also must
protect its current business against competitors’ attacks.
•What can the market leader do to protect its position?
a) It must prevent or fix weaknesses that provide opportunities for
competitors.
b) It must always fulfill its value promise.
c) Its prices must remain consistent with the value that customers
see in the brand.
d) It must work to keep strong relationships with valued customers.
e) It should “plug holes” so that competitors do not jump in.
•The best defense is a good offense, and the best response is continuous
innovation.

Expanding Total Demand: Creating More Usage
Companies are very protective of their market share. When

Samsung introduced its galaxy S line of smartphones to
compete against Apple’s iPhone, Apple took action decisively by
suing Samsung for patent infringement. Samsung countersued
thatApple had infringed on its technology.

Singapore Airlines: Staying Ahead Through Continuous

Innovation
To fortify its position as a premier airline,
Singapore Airlines is the world’s first commercial
airline to fly the double-decker super-jumbo
Airbus aircraft known as the A380. The 471-seat
juggernaut enables the airline to take a larger
number of passengers on long-haul routes at a
lower operating cost per seat. The services that
Singapore Airlines offer on these aircraft are
aimed at providing an unprecedented flying
experience, setting new standards for the airline
industry. Already, Singapore Airlines offers a new
class on the A380—the Singapore Airlines Suites
—and has been a pioneer in introducing
innovative in-flight entertainment services such
as multiplayer electronic games, including chess
and mahjong.

Expanding Market Share
•Studies have shown that, on average, profitability rises with

increasing market share.
•Some studies have found that many industries contain one or a few
highly profitable large firms, several profitable and more focused
firms, and a large number of medium-sized firms with poorer profit
performance. It appears that profitability increases as a business
gains share relative to competitors in its served market.
•Companies must not think that gaining increased market share will
improve profitability automatically.
•Much depends on their strategy for gaining increased share.

Strategies: Challenger
•Challenge the leader

•Play along
•2nd Mover advantage

Market Challenger Strategies
•Firms that are second, third, or lower in an industry are sometimes

quite large.
•These runner-up firms can adopt one of two competitive strategies:
1. They can challenge the leader and other competitors in an
aggressive bid for more market share (market challengers).
2. They can play along with competitors and not rock the boat
(market followers).
•Amarket challenger must first define which competitors to challenge

and its strategic objective.

•The challenger can attack the market leader, a high-risk but potentially
high-gain strategy.
•Its goal might be to take over market leadership.
•Xerox assumed leadership of the copier market from 3M by developing

a better copying process. Later, Canon took a large chunk of Xerox’s
market by launching desk copiers.
•Orthe challenger’s objective may simply be to wrest more market

share.

A market challenger can attack the

market leader with the goal of taking
over market leadership. Canon took a
large chunk of Xerox’s market by
launching desk copiers developed with
its original technologies.


Virgin Drinks took on the leaders head-
on, launching its own cola, advertising
heavily, and trying to get into all the
same retail outlets that stocked the
leading brands.
At Virgin Cola’s launch, Virgin CEO
Richard Branson even drove a tank
through a wall of rivals’ cans in New
York’s Times Square to symbolize the
war he wished to wage on the big,
established rivals.
However, Coke’s and Pepsi’s viselike grip
on U.S. shelf space proved impossible for
Virgin Drinks to break.
Although Virgin Drinks is still around, it
has never gained more than a 1 percent
share of the U.S. Cola market.

Second-Mover Advantage
•The challenger observes what has made the leader successful and
then improves upon it. This is known as the “second-mover
advantage.”
•Asian companies have typically followed this path to competitive
success. Japanese car makers like Toyota and Honda studied and
improved on the designs of their American rivals to wrest market
share away from them.
•In turn, Korean automakers such as Kia and Hyundai made big gains
in the market with better designs than their Japanese, American, and
German rivals.

Second-Mover Advantage
Kia and its award-winning Optima model.

Challenging firms of the same size
•Alternatively,
the challenger can avoid the leader and instead
challenge firms its own size, or smaller local and regional firms.
•These smaller firms may be underfinanced and not serving their

customers well.
•The challenger must choose its opponents carefully and have a

clearly defined and attainable objective.

Choosing the right type of challenger strategies
•How can the market challenger best attack the chosen competitor
and achieve its strategic objectives?
•Itmay launch a full frontal attack, matching the competitor’s

product, advertising, price, and distribution efforts. It attacks the
competitor’s strengths rather than its weaknesses.
•Rather than challenging head-on, the challenger can make an

indirect attack on the competitor’s weaknesses or on gaps in the
competitor’s market coverage.

Strategies: Follower
•Learn from leader
•Avoid development costs

Market Follower Strategies
•Not all runner-up companies want to challenge the market leader.

Challenges are never taken lightly by the leader.
•A follower can gain many advantages.
– The market leader often bears the huge expenses of developing
new products and markets, expanding distribution, and educating
the market.
– By contrast, the market follower can learn from the leader’s
experience. It can copy or improve on the leader’s products and
programs, usually with much less investment. Although the
follower will probably not overtake the leader, it often can be as
profitable.

Acer tried to compete directly
with top-tier PC makers like
IBM and Dell on American soil
Market Follower Strategies for years but suffered significant
losses. While its products were
generally praised for quality,
price, and innovation, it was
hampered by marketing and
distribution. It had a limited
advertising budget and its sales
on the corporate market were
spread out across a number of
segments, without being a leader
in any. Eventually, Acer
concentrated more on Asia and
Europe. It felt that it had an
advantage over mainland Chinese
PC makers as it was perceived as
being more international than
them. Acer felt it could compete
with international PC makers in
China because it was perceived to
be more “local” than them.

Market Follower Strategies
•Following is not the same as being passive or a carbon copy of the

leader.
•Each follower tries to bring distinctive advantages to its target
market.
•The follower is often a major target of attack by challengers.
Therefore, the market follower must keep its manufacturing costs low
and its product quality and services high. It must also enter new
markets as they open up.

Strategies: Nicher
•Specialization is key
•Focus on: markets, customers, products, mixes

Market Nicher Strategies
•Almost every industry includes firms that specialize in serving market

niches. Instead of pursuing the whole market, or even large
segments, these firms target subsegments.
•Nichers are often smaller firms with limited resources. But smaller
divisions of larger firms also may pursue niching strategies.

Market Nicher Strategies
Jollibee is king of the burger market in

the Philippines. The Jollibee burger is
similar to “what a Filipino mother would
cook at home.” (www.jollibee.com.ph)

The profitability of niching strategy
•Why is niching profitable? The main reason is that the market nicher
ends up knowing the target customer group so well that it meets their
needs better than other firms that casually sell to this niche.
•As a result, the nicher can charge a substantial markup over costs
because of the added value.
•Whereas the mass marketer achieves high volume, the nicher achieves
high margins.
•Nichers try to find one or more market niches that are safe and
profitable.
•An ideal market niche is big enough to be profitable and has growth
potential.

Specialization in Niching
•Perhapsmost important, the niche is of little interest to major

competitors.
•The key idea in niching is specialization.
•Amarket nicher can specialize along any of several market,

customer, product, or marketing mix lines.

Specialization in Niching
•The niche marketing firm can specialize in serving one type of end
user, as when a law firm specializes in the criminal, civil, or business
law markets.
•The nicher can specialize in serving a given customer-size group.
Many nichers specialize in serving small- and mid-size customers who
are neglected by the major companies.
•Some nichers focus on one or a few specific customers, selling their
entire output to a single company.
•Still other nichers specialize by geographic market, selling only in a
certain locality, region, or area of the world.
•Quality–price nichers operate at the low or high end of the market.

Risks of Niching Strategy
•Niching carries some major risks.
•Forexample, the market niche may dry up, or it might grow to the
point that it attracts larger competitors.
•Thatis why many companies practice multiple niching. By developing

two or more niches, a company increases its chances for survival.

Explain the fundamentals of competitive marketing strategies based

on creating value for customers.

18.3
Balancing Customer and Competitor Orientations
18.3
18.3 Balancing Customer and Competitor
Orientations
Balance
• CUSTOMER ORIENTATION
• COMPETITOR ORIENTATION

Orientations
Balancing Customer and Competitor Orientations
• Whether a company is a market leader, challenger, follower, or

nicher, it must watch its competitors closely and find the
competitive marketing strategy that positions it most effectively.
• And it must continually adapt its strategies to the fast-changing

competitive environment.

Orientations
Competitor centered

Orientations
Competitor-centered company
•A competitor-centered company is one that spends most of its

time tracking competitors’ moves and market shares and trying to
find strategies to counter them.
•This approach has pluses and minuses.

– On the positive side, the company develops a fighter orientation.
– On the negative side, the company becomes too reactive.

Orientations
Customer centered

Orientations
Customer-centered company
•Acustomer-centered company focuses more on customer

developments in designing its strategies.
•Clearly, the customer-centered company is in a better position to

identify new opportunities and set long-run strategies that make
sense

Orientations
Market-centered

Orientations
Market-centered company
•In
practice, today’s companies must be market-centered
companies, watching both their customers and their competitors.
•Butthey must not let competitor watching blind them to customer

focusing.

Orientations
Evolving Company Orientations
•Figure 18.4 shows how companies might move through four

orientations over the years.
i.In the first stage, they were product oriented, paying little attention to
either customers or competitors.
ii.In the second stage, they became customer oriented and started to
pay attention to customers.
iii.In the third stage, when they started to pay attention to competitors,
they became competitor oriented.
iv.Today, companies need to be market oriented, paying balanced
attention to both customers and competitors.

Orientations
Evolving Company Orientations

Orientations
Illustrate the need for balancing customer and competitor

orientations in becoming a truly market-centered organization.

Orientations
Company Case
QB House: Competing by Being Different

Orientations
Discuss the key issues related to initiating and responding to price

changes.

Thank
you

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Principles of Marketing: An Asian

3 © 2012 Principles of Marketing: An Asian Perspective

18.1 Competitor Analysis

4 © 2012 Principles of Marketing: An Asian Perspective

5 © 2012 Principles of Marketing: An Asian Perspective

Competitive advantage requires

7 © 2012 Principles of Marketing: An Asian Perspective

•Today’s companies face their toughest competition ever.

•To win in today’s marketplace, companies must become adept not

•Customers see competitive advantages as customer advantages.

8 © 2012 Principles of Marketing: An Asian Perspective

•Thefirst step is competitor analysis—the process of identifying,

•The second step is developing competitive marketing strategies

9 © 2012 Principles of Marketing: An Asian Perspective

10 © 2012 Principles of Marketing: An Asian Perspective

Steps in analyzing competitors

As shown in Figure 18.1, competitor analysis involves first identifying

11 © 2012 Principles of Marketing: An Asian Perspective

12 © 2012 Principles of Marketing: An Asian Perspective

13 © 2012 Principles of Marketing: An Asian Perspective

Identifying competitors: hotel example

•Companies actually face a much wider range of competitors.

•Thecompany might define competitors as all firms making the same

•Evenmore broadly, competitors might include all companies making

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Identifying competitors: hotel example

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•Companies must avoid “competitor myopia.” A company is more likely

•Companies can identify their competitors from the industry point of

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•Companies can also identify competitors from a market point of view.

•See Figure 18.2.

•Ingeneral, the market concept of competition opens the company’s

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Avoiding competitor myopia

Encyclopædia Britannica has to look

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Perspectives in identifying competition

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Determining Competitors’ Objectives

•Each competitor has a mix of objectives.

•The company wants to know the relative importance that a competitor

•Knowing a competitor’s mix of objectives reveals whether the competitor is

•Acompany must also monitor its competitors’ objectives for various

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Identifying Competitors’ Strategies

•Some important insights emerge from identifying strategic groups.

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Identifying Competitors’ Strategies

Pioneer offers a narrower line of

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Identifying Competitors’ Strategies

•Although competition is intense within a strategic group, there is also

•The company needs to look at all of the dimensions that identify

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Assessing Competitors’ Strengths and Weaknesses

•Marketersneed to assess each competitor’s strengths and

•Companiesnormally learn about their competitors’ strengths and

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Assessing Competitors’ Strengths and Weaknesses

•They can conduct primary marketing research with customers,

•They can benchmark themselves against other firms, comparing the