Defining the Competitive Set 3 Defining the Competitive Set

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

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

Levels of Competition Diet lemon limes Baseball cards Coffee Coke Fruit flavored colas Coffee Coke Pepsi Diet-Rite cola Bottled water Lemon Regular colas Beers Juices Wine Fast food Tea Video rentals Ice cream Product form competition: Diet colas Product category competition: 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 Convince Customers that the Product Form is Best in the Category Product 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

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

PDA Competition Level of Competition Definition Competitors Need Satisfied Product form POAs Full-features Palm Pilot VII Compaq Aero Casioplus integrated communication Cassio Poeia Personal information management plus Product category PIMs Palm III Royal Casio PV-100 PIM only Generic computers Notebook/ subnotebook Paper-based solutions IBM Toshiba Many others Rolodex Day Timer Other solutions to the above Budget Business items costing $100-$1,000 Fax machines Personal copiers Cellular phones Furniture (e.g. Steelcase)

Managerial Judgment of Competition Product/Services Markets Same Different A B Same C D Different

Brand-Switching Matrix Time t+1 A B C D E .6 .2 .3 .4 .1 .5 Time t

Defining Competition with Brand Choice Data All brands National Regional Diet Regular Family brand 1 Family brand 2 Cola Non-Cola

Defining Competition with Perceptual Mapping Moist Needs refrigeration As a formal dessert • Custard mix Bakery cake • Pudding mix Tapioca pudding mix Homemade cake • Homemade pie Local mix • Takes a long time to prepare • Layer cake mix Cheese cake mix Dzer ta • Jell-O Bundt cake mix • Frozen pie Chocolate torte mix • •• Canned pudding Frozen cake Boston crème pie mix “Light Style” cake mix “Stir’n Frost cake mix Coffee cake mix • Individual pie “Snackin’ Cake” mix • Quick bread mix Hostess cupcakes Date bar mix • Brownie mix • Homemade cookies Cookie mix • • Oatmeal cookies Bakery cookies • Pepperidge Farm cookies Pillsbury cookie dough • Good for a coffee break • Between meal snack In my school work lunch • Easy to carry with me

Methods Versus Competition Levels and Information Required

Enterprise Competition in Financial Services