Principles and Practice of Marketing David Jobber Chapter 16 Competition and Marketing 1 1

D Jobber, Principles and Practice of Marketing, © 1998 McGraw-Hill Competitor analysis 1. Who are our competitors? 2. What are their strengths and weaknesses? 3. What are their strategic objectives and thrust? 4. What are their strategies? 5. What are their response patterns? Competitor analysis seeks to answer five key questions D Jobber, Principles and Practice of Marketing, © 1998 McGraw-Hill 2

D Jobber, Principles and Practice of Marketing, © 1998 McGraw-Hill Competitor analysis 1. Who are our competitors? Identify competitors Product form Product substitutes Generics New entries 2. What are their strengths and weaknesses? 3. What are their strategic objectives and thrust? 4. What are their strategies? 5. What are their response patterns? D Jobber, Principles and Practice of Marketing, © 1998 McGraw-Hill 3

D Jobber, Principles and Practice of Marketing, © 1998 McGraw-Hill Competitor analysis 1. Who are our competitors? Audit competitor capabilities 2. What are their strengths and weaknesses? Financial Technical Managerial Marketing assets Strengths and weaknesses 3. What are their strategic objectives and thrust? 4. What are their strategies? 5. What are their response patterns? D Jobber, Principles and Practice of Marketing, © 1998 McGraw-Hill 4

D Jobber, Principles and Practice of Marketing, © 1998 McGraw-Hill Competitor analysis 1. Who are our competitors? 2. What are their strengths and weaknesses? Infer competitor objectives and strategic thrust Build Hold Harvest Growth directions 3. What are their strategic objectives and thrust? 4. What are their strategies? 5. What are their response patterns? D Jobber, Principles and Practice of Marketing, © 1998 McGraw-Hill 5

D Jobber, Principles and Practice of Marketing, © 1998 McGraw-Hill Competitor analysis 1. Who are our competitors? 2. What are their strengths and weaknesses? Deduce competitor strategies 3. What are their strategic objectives and thrust? Target segments Differential advantages Competitive scope Cost leadership 4. What are their strategies? 5. What are their response patterns? D Jobber, Principles and Practice of Marketing, © 1998 McGraw-Hill 6

D Jobber, Principles and Practice of Marketing, © 1998 McGraw-Hill Competitor analysis 1. Who are our competitors? 2. What are their strengths and weaknesses? 3. What are their strategic objectives and thrust? Estimate competitor response patterns Retaliatory Complacent Hemmed-in Selective Unpredictable 4. What are their strategies? 5. What are their response patterns? D Jobber, Principles and Practice of Marketing, © 1998 McGraw-Hill 7

Competitor identification Product form competitors Technically similar products Product substitutes Technically dissimilar products Generic competitors Products that solve the problem or eliminate it in a dissimilar way Potential new entrants With technically similar products With technically dissimilar products The competitive arena D Jobber, Principles and Practice of Marketing, © 1998 McGraw-Hill 8

Company capability profiles Key success factor Our company Competitor 1 Competitor 2 Innovativeness Financial strength Technical assistance to customers Product quality Well-qualified workforce Access to international distribution channels 1 2 3 4 5 1 2 3 4 5 1 2 3 4 5 D Jobber, Principles and Practice of Marketing, © 1998 McGraw-Hill 9

Creating a differential advantage Product Promotion Distribution Price D Jobber, Principles and Practice of Marketing, © 1998 McGraw-Hill 10

Cost drivers Costs Economies of scale Learning Capacity utilization Linkages Costs Interrelationships Integration Timing Policy decisions Location Institutional factors D Jobber, Principles and Practice of Marketing, © 1998 McGraw-Hill 11