1. Chapter 2 Markets and Competitive Space

2. MARKETS AND STRATEGIES
The Challenges ― Markets are increasingly complex, turbulent, and interrelated. Importance of a broad view of the market. Essential to develop a vision about how the market is likely to change in the future. Continuous Monitoring is Necessary to: Find promising opportunities Identify shifts in value requirements Understand competitors’ positioning Guide targeting and positioning decisions

3. OPPORTUNITIES OUTSIDE THE COMPETITIVE BOX
New Types of Competition
Traditional Competitors
New Business Models
New Customers
New Customers
Conventional Value Propositions
Existing Customer Base
New Customer Base(s)

4. Markets Impact Strategies
Market changes often require altering strategies
Forces of change create both market opportunities and threats
Inherent danger in faulty market sensing

5. DEFINING AND ANALYZING PRODUCT-MARKETS
Determine the Boundaries and Structure of the Product-Market
Form the
Product-Market
Describe and Analyze End-Users
Analyze
Competition
Forecast
Market Size and
Rate of Change

6. Matching Needs with Product Benefits
A product – market matches people with needs to the product benefits that satisfy those needs
“A product – market is the set of products judged to be substitutes within those usage situations in which similar patterns of benefits are sought by groups of customers.”*

7. Product – Market Boundaries and Structure
Determining Product-Market Boundaries and Structure
Start with the generic need satisfied by the product category of interest to management
Identify the product categories (types) that can satisfy the generic need
Form the specific product – markets within the generic product – market

8. Illustrative Fast-Food Product-Market Structure
SUPER
MARKETS
MICROWAVE
OVENS
CONVENIENCE
STORES
TRADITIONAL
RESTAURANTS
FAST-FOOD MARKET

9. Extent of Market Complexity
Three characteristics of markets:
1. Functions or uses of the product
2. The enabling technology of the product
3. Customer segments in the product-market

10. Illustrative Product – Market Structure
Food and beverages
for breakfast meal
Generic Product Class
Cereals
Product Type
Ready to eat
Variant A
Regular
Natural
Variant B
Pre-sweetened
Nutritional
Life
Product 19
Special K
Brands

11. Identifying and Describing Buyers
Illustrative buyer characteristics in consumer markets:
Family size, age, income, geographical location, sex, and occupation
Illustrative factors in organizational markets:
Type of industry
Company size
Location
Type of products

12. How Buyers Make Choices
BUYING DECISION PROCESS:
Problem recognition
Information search
Alternative evaluation
Purchase decision
Post-purchase behavior

13. Environmental Influences
External factors influencing buyers’ needs and wants:
Government, social change, economic shifts, technology etc.
These factors are often non-controllable but can have a major impact on purchasing decisions

14. Building Customer Profiles
Start with generic product – market
Move next to product- type and variant profiles >> increasingly more specific
Customer profiles guide decision making (e.g. targeting, positioning, market segmentation etc.)

15. ANALYZING COMPETITION
1. Define the Competitive
Arena for the Generic,
Specific, and Variant
Product Markets
PRODUCT-
MARKET
STRUCTURE
AND
SEGMENTS
4. Identify
and
Evaluate Potential Competitors
2. Identify
and
Describe
Key Competitors
3. Evaluate
Key Competitors

16. Examples of Levels of Competition
Baseball
cards
Bottle
water
Video
Games
Fast
Food
Regular
colas
Diet lemon
limes
Ice
Cream
Beer
Diet-Rite
Cola
Fruit
flavored
colas
Diet Coke
Diet Pepsi
Wine
Product from
competition:
diet colas
Lemon
limes
Product category
competition:
soft drinks
Juices
Coffee
Generic competition:
beverages
Budget competition:
food & entertainment

17. Key Competitor Analysis
Business scope and objectives
Management experience, capabilities, and weaknesses
Market position and trends
Market target(s) and customer base
Marketing program positioning strategy
Financial, technical, and operating capabilities
Key competitive advantages (e.g., access to resources, patents)

18. DEVELOPING A STRATEGIC VISION ABOUT THE FUTURE
Industry Boundaries Blurring and Evolving
Competitive Structure and Players Changing
Value Migration Paths
Product Versus Business Design Competition
Firms are Collaborating to Influence Industry Standards