Principles of Marketing

Session 6
Dr Farrah Arif

Managing Products
vs
Managing Customer
Relationships

Customer
Advantage leads
to Competitive
Advantage

Two Steps for Competitive

Advantage
Competitor Analysis
Competitive Marketing Strategies

Competitor Analysis
1. Identifying Competitors
2. Assessing Competitors
3. Assessing Competitors to Attack and Avoid

Identifying Competitors
Similar products/services to the same customers
at similar price (industry point of view)
All companies making products that supply the
same service (industry point of view)
All companies that compete for the same
consumer dollars (share of wallet)

(market point of view)

Competitor Myopia

A company is more likely to be buried by its latent

competitors than its current ones

Assessing Competitors
1. Determining Competitors Objective
Current Profitability; Market Share Growth; Cash
Flow; Technological Leadership; Service Leadership

2. Identifying Competitors Strategies

Assessing Competitors
1. Determining Competitors Objective

Current Profitability; Market Share Growth; Cash Flow;

Technological Leadership; Service Leadership

2. Identifying Competitors Strategies

STRATEGIC GROUP: a group of firms in an industry

following the same or similar strategy in a given target
market KEY Competitors
3. Assessing Competitors Strengths and Weaknesses
What can our competitors do? Benchmarking
4. Estimating Competitors Reactions
What will our competitors do?
Likely reactions price cuts; promotion increases; newproduct introductions
Internal Culture and Guiding Beliefs

Selecting Competitors to Attack and Avoid

Strong vs Weak Competitor
Close vs Distant Competitor
Good vs Bad Competitors
Finding Uncontested Market Spaces

Designing a 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 an appropriate way
Sends key information to relevant decision makers and
responds to inquires from managers about competition

Two Steps for Competitive

Advantage
Competitor Analysis
Competitive Marketing Strategies

Approaches
Entrepreneurial Marketing
Formulated Marketing
Intrepreneurial Marketing

Formulated vs Creative

Michael Porters Basic Competitive Positioning

Strategies

Customer-centered Competitive Marketing

Strategies : Value Disciplines for
Superior Customer Value

Competitive Positions

40 %
30 %
20 %
10 %

Market Leader Strategies

Expanding the
Total Demand

Protecting Marketing Share

Expanding Market Share

Market Challenger Strategy

Second-mover Advantage
Full Frontal Attack vs Indirect Attack

Market Follower Strategy

Market Nicher Strategies

Competitive Environment The Challenge

Competitor-centered Company
+ the company develops a fighter orientation
- the company becomes too reactive

Customer-centered Company
+ identify new opportunities & set long-run Strategies that make sense

Market-centered Company The

balanced approach

Take home
Understanding of Customers is not enough
To gain competitive advantage, companies should do
Competitive Analysis and look at the Competitive
Strategies

Market-centered orientation is a way

forward