1. Entrepreneurship: Ideas in Action © Cengage Learning/South-Western ChapterChapter Identify and Meet a Market Need 4.1 Identify Your Market 4.2 How to do Research 4.3 Identify Competition 4.4 The Marketing Mix 4.5 Promotion and Goals 4

2. Entrepreneurship: Ideas in Action © Cengage Learning/South-Western Chapter 4 Slide 2 Lesson 4.3 Identify Competition Goals Determine your direct and indirect competition Analyze the strengths and weaknesses of competitors Establish strategies for maintaining customer loyalty Textbook Page 85

3. Entrepreneurship: Ideas in Action © Cengage Learning/South-Western Chapter 4 Slide 3 Terms Direct competition Indirect competition

4. Entrepreneurship: Ideas in Action © Cengage Learning/South-Western Chapter 4 Slide 4 On the Scene What could Cheryl do to make sure customers come to her spa and not a competitor’s spa? What are some things Cheryl could do at her spa to establish customer loyalty? Textbook Page 85 Coupons, discounts for repeat customers, offer products or services that her competition does not offer.

5. Entrepreneurship: Ideas in Action © Cengage Learning/South-Western Chapter 4 Slide 5 Types of Competition Direct competition originates from a business that makes most of its income by selling the same products or services as you to the same market Indirect competition originates from a business that makes only a small amount of money by selling the same products or services as you to the same market Textbook Page 85

6. Entrepreneurship: Ideas in Action © Cengage Learning/South-Western Chapter 4 Slide 6 Finding Your Competition Direct competition Use secondary data sources Indirect competition More difficult to find; you will need to do some research. Textbook Page 86

7. Entrepreneurship: Ideas in Action © Cengage Learning/South-Western Chapter 4 Slide 7 Competing with Large Retailers Reasons that large retailers can be a source of strong competition include: 1. They can order and stock large quantities of products in stock (volume discounts) 2. They do not rely on a single product line. 3. They usually have more advertising resources. Textbook Page 86

8. Entrepreneurship: Ideas in Action © Cengage Learning/South-Western Chapter 4 Slide 8 What is the difference between direct and indirect competitors? Textbook Page 86 Direct competitors are businesses competing for the same target markets. They may be in the same geographical area or far away. Indirect competitors are competing for a share of a larger market.

9. Entrepreneurship: Ideas in Action © Cengage Learning/South-Western Chapter 4 Slide 9 Study Individual Competitors Competitive analysis identifying and examining the characteristics of a competing firm Textbook Page 87

10. Entrepreneurship: Ideas in Action © Cengage Learning/South-Western Chapter 4 Slide 10 Make a list of your competitors. Summarize the products and prices offered by your competitors. List each competitor’s strengths and weaknesses. Find out the strategies and objectives of your competitors. Determine the strength of the market. First determine who your direct and indirect competitors are. Then, follow these steps to begin your competitive analysis: Textbook Page 87

11. Entrepreneurship: Ideas in Action © Cengage Learning/South-Western Chapter 4 Slide 11 Textbook Page 87

12. Entrepreneurship: Ideas in Action © Cengage Learning/South-Western Chapter 4 Slide 12 Maintaining Customer Loyalty Listen and Respond to Feedback Perpetually ask for and respond to customers’ needs. Textbook Page 88

13. Entrepreneurship: Ideas in Action © Cengage Learning/South-Western Chapter 4 Slide 13 superior service convenient hours easy return policies store-specific credit cards personal notes or birthday cards frequent-buyer programs Other strategies for Maintaining Customer Loyalty Textbook Page 88

14. Entrepreneurship: Ideas in Action © Cengage Learning/South-Western Chapter 4 Slide 14 What are some strategies for maintaining customer loyalty? Superior service, convenient hours, easy return policies, store-specific credit cards, notes of thanks or birthday cards, frequent shopping programs.