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Marketing 5850

Marketing 5850. Spring 2007 Week 5. Topics. Customer Analysis Competition Environmental Analysis. Strategic 5 - Cs. Context/Collaborators. Customer. Company. Competitor. Mktg. Strategy: Achieve max positive differentiation. Over competitor (Create greater value). Customer Analysis.

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Marketing 5850

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  1. Marketing 5850 Spring 2007 Week 5

  2. Topics • Customer Analysis • Competition • Environmental Analysis

  3. Strategic 5 - Cs Context/Collaborators Customer Company Competitor Mktg. Strategy: Achieve max positive differentiation Over competitor (Create greater value)

  4. Customer Analysis 1. Segmentation • Who are the buyers/users of product? • Who are the largest buyers? • What potential customers are not now buying from us? • How does the market segment? • How should the market be segmented? 2. Customer motivation • What motivates customers to use product? • What attributes of offering are important? • What objectives do our customers seek? • What changes in motivation are occurring or are likely to occur? 3. Unmet needs • Are customers satisfied with the product they are now buying? • Do our customers experience problems? • Are there unmet needs of which customers are unaware?

  5. Customer AnalysisWhat we need to know • Who they are: Purchaser User • What they buy: Amount Brand, features Usage situation • Where they buy it: • When they buy it: Time of year on sale/promotion

  6. Customer AnalysisWhat we need to know • How they choose: Decision participants Process Info. Sources • Why they select a product: Customer value Functional attributes Service Image Brand equity

  7. Markets andCompetitiveSpace

  8. Strategic 5 - Cs Context/Collaborators Customer Company Competitor Mktg. Strategy: Achieve max positive differentiation Over competitor (Create greater value)

  9. THE ANATOMY OF COMPETITION • All competitors who persist andsurvive have a unique advantage • The more similar competitors arethe more severe the competition • If competitors co-exist, then eachhas a distinctive advantage • Competitors who co-exist must bein equilibrium

  10. Natural and Strategic Competition • Natural Competition • Strategic Competition

  11. Natural Competition: Survival of the Fittest • Two firms doing business the same way in the same market cannot coexist forever

  12. Understanding Competition Company Viewpoint

  13. 4 Types of Rivals • Prospector • In dynamic markets • Usually “pioneer” • Monitors environment constantly • First-in first-out often • Defender • Prefers stable markets • Limited range of products • Defensive (lower prices, better quality) • Focused on own business (ignores big-picture)

  14. 4 Types of Rivals • Analyzer • Does react to market changes (slowly) • Sticks with select products, but does some innovation • A Follower • Reactor • Reacts to others’ strategies • Inconsistent prod/mkt orientation • Low risk taker • Usually forced to change by competition

  15. Factors Contributing to Competitive Rivalry • Opportunity potential • Ease of entry • Nature of product • Exit barriers • Homogeneity of market • Industry structure • Commitment to industry • Technological innovations

  16. Factors Contributing to Competitive Rivalry ( 2 ) • Scale economies • Economic climate • Diversity of firms

  17. Porter’s Model of Industry Structure Analysis Potential Entrants Threat of new entrants The Industry Degree of Rivalry Bargaining Power Bargaining Power Suppliers Buyers Threat of substitutes Substitutes

  18. Achieving Competitive Distinctiveness • Market focus • Product differentiation • Alternative distribution channel • Selective pricing

  19. Competitive Advantage: Two Analytical Tools • Industry analysis: • market attractiveness based on economic structure

  20. Competitive Advantage: Two Analytical Tools • Comparative analysis: • likely future performance of an individual firm in a particular market given the structure of the industry

  21. Analyzing Competitors • Three Variables to Monitor When Analyzing Competitors: • Share of market • Share of mind • Share of heart

  22. Market Share, Mind Share, and Heart Share

  23. Market nicher Market leader Market challenger Market follower 40% 30% 20% 10% Hypothetical Market Structure & Strategies Expand Market Attack leader Special- ize Imitate Defend Market Share Status quo Expand Market Share

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