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Marketing Management MKTG 420 Week 8 October 20, 2003

Marketing Management MKTG 420 Week 8 October 20, 2003. Competitor Analysis. Best, Chapter 6 – Competitor Analysis Marketing Warfare (Wednesday) – Cima Case (Friday) – Andy Hedden-Nicely (President, HNA Impression Management) (Monday) – Best, chapter 7 – Product Strategy.

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Marketing Management MKTG 420 Week 8 October 20, 2003

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  1. Marketing ManagementMKTG 420 Week 8 October 20, 2003

  2. Competitor Analysis • Best, Chapter 6 – Competitor Analysis • Marketing Warfare • (Wednesday) – Cima Case • (Friday) – Andy Hedden-Nicely (President, HNA Impression Management) • (Monday) – Best, chapter 7 – Product Strategy

  3. Competitive Position • Industry Forces • Market Entry/Exit • Buyer/Supplier Power • Substitutes/Rivalry • Competitor Benchmarking • Competitive Position • Cost Advantage • Differentiation Advantage • Marketing Advantage

  4. Industry Forces • Market Entry/Exit • Buyer/Supplier Power • Substitutes/Rivalry

  5. Effect on Competition?

  6. Effect on Competition?

  7. Effect on Competition?

  8. Effect on Competition?

  9. Effect on Competition?

  10. Effect on Competition?

  11. Effect on Competition?

  12. Initial State

  13. Hold or Cut 5%?

  14. Cut 5%

  15. Competitor Cuts Price 5%

  16. Hold or Cut 5%?

  17. Match 5% Cut

  18. Effect on Competition?

  19. Best Buy shares hit on Microsoft pact worryOctober 16, 2002 11:37:00 AM ET CHICAGO, Oct 16 (Reuters) - Best Buy Co. Inc. (BBY) shares tumbled as much as 13 percent on Wednesday morning after the electronics retailer said software giant Microsoft Corp. (MSFT) may not renew an alliance that expires in March. In a quarterly filing with the U.S. Securities and Exchange Commission on Tuesday, Best Buy said it was still negotiating with Microsoft, which had told the company it would let the alliance expire. The pact provides advertising money and profit sharing to Best Buy, a major retailer of Microsoft products. "If we are unable to extend our alliance with Microsoft or to replace it with a comparable strategic marketing relationship, future operating results could be affected," Best Buy said in the filing. The stock was down $1.94, or 8.9 percent, at $19.85, in late morning New York Stock Exchange trading, giving back Tuesday's strong gains racked up in a sectorwide rally. The shares had traded as low as $19.01 earlier in the session. A Best Buy spokeswoman said the company had no further comment about the Microsoft alliance. REUTERS Supplier Power

  20. Counter Strategy • Gateway to offer Corel software over MicrosoftOctober 15, 2002 8:06:00 PM ET • SEATTLE, Oct 15 (Reuters) - Canadian software maker Corel Corp. (CORL) said on Tuesday that Gateway Inc. (GTW) became the latest PC maker to begin offering its WordPerfect Office software instead of Microsoft Corp.'s (MSFT) dominant Office software. • With computer prices falling, the cost of adding Microsoft's Office word processing, spreadsheet and presentation software in some cases makes up more than half the original cost of a $600 PC, analysts have said.

  21. Competitive Advantage

  22. Competitive Advantage

  23. Marketing Warfare

  24. Basic Assumptions • Markets are competitive • Competitors are rarely of equal strength • Competitive strategy is dictated by one’s relative strength • Proper deployment of assets is key to success • I.e., what you do with your assets is as important as the strength of your assets.

  25. How Markets Divide Themselves • Leader - > 30% share • Challenger - 15-30% share • Flanker - 5 - 15% share • Nichers - 1% or less

  26. Leader Strategy

  27. Leader – Defend Position

  28. Package Delivery Market

  29. UPS Strategy

  30. UPS Strategy • Wanted to expand share in Ground Deliveries • Purchased Mailboxes Etc. • A key point of contact for FedEx

  31. Leader – Defend Position

  32. Leader Defending by Attacking GM - Avalanche

  33. The Versatile Car Category

  34. Challenger Strategy

  35. Challenger – Focus on Leader

  36. Challenger – Focus on Leader

  37. Flanker Strategy

  38. Flanker – Focus on Overlooked Areas

  39. Nicher Strategy

  40. Nichers/Guerillas – Find areas not attractive to Others

  41. A Succesful Nicher • Casual Male Retail Group (CMRG) • 475 stores in the U.S. & Puerto Rico • Target big and tall men • $340 million in annual sales (2002) vs$195 million in 2001 • No one else seems interested in this low cost, high margin business • Outsized males are not fashion leaders but trend followers

  42. Battle Field

  43. Humble Beginnings

  44. 1st Wendy’s (1969)

  45. 1st Jack in the Box

  46. Constant Combat

  47. A Battle of Words as Well as Food

  48. Fast Food Attitudes

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