COMPETITION IS EVERYWHERE

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COMPETITION IS EVERYWHERE
CHAPTER7

• 7-1 Focusing on Market Segments
• 7-2 Positioning for Competitive Advantage
• 7-3 Competing for Market Segments
• 7-4 Learning about the Competition

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• Focus Questions
• In what ways is PJ Madisons trying to suggest
  its ice cream is different and better than other
  brands?
• What types of consumers do you believe will be
  attracted to the advertisement?
• In your view, is the ad effective at encouraging
  customers to try PJ Madisons ice cream? Why or
  why not?

Courtesy of PJ Madisons. Used with permission.
3
FOCUSING ON MARKET SEGMENTS
7-1

• GOALS
• Describe how markets can be segmented by
  geographic location, demographic characteristics,
  psychographics, product usage, and benefits
  derived.
• Explain how to evaluate market potential and
  calculate market share.

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Market Segmentation

• The benefits of segmentations
• Segmentation categories
• Geographic segmentation
• Demographic characteristics
• Psychographics
• Product usage
• Benefit expectations
• Segmenting the business market

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Demographic Characteristics of Education and
Income
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Identifying and AnalyzingMarket Segments

• Identifying Possible Segments
• Determining Market Potential

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Determining Market Potential

1. Number of potential customers
2. Interest in the product or service and other mix
   elements
3. Money available to make the purchase
4. Ability to communicate with and distribute
   product to consumers

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Market Potential

• Market potential is the total revenue that can be
  obtained from the market segment.

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Market Share

• Market share is the portion of the total market
  potential that each company expects to get in
  relation to its competitors.

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POSITIONING FORCOMPETITIVE ADVANTAGE
7-2

• GOALS
• Explain the various bases for positioning a
  product to distinguish it from the competition.
• Describe the three common positioning strategies.

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Basis for Positioning

• Attribute
• Price and quality
• Use or application
• Product user
• Product classification
• Competitor

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Market Position
Laundry Product A Laundry Product B
Attribute Cleans quickly and easily Leaves fresh scent
Price and Quality Low price, good value Higher price for highest quality
Use or Application Use as pre-wash on tough stains Use for hand-washing delicates
Product User Homemakers reliable friend New generations discovery
Product Classification Used by Olympic athletes Used by professional laundries
Competitor Gets out dirt Product B cant Gentler on clothing than Product A
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Selecting a Positioning Strategy

• Consumer perceptions
• Competition
• Business environment

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COMPETING FOR MARKET SEGMENTS
7-3

• GOALS
• Explain direct vs. indirect competition and price
  vs. non-price competition.
• Describe the benefits of competition to consumers.

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Types of Competition for Positioning Decisions

• Direct competition
• Indirect competition
• Price competition
• Non-price competition

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Benefits of Competition

• Consumer receives the best price for products.
• Competition encourages improvements in products
  with the addition of unique features and
  benefits.
• Businesses are always looking for new and
  improved products to match their competition.
• Competition offers consumers the benefit of a
  wide variety of products from which to choose.

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LEARNING ABOUT THE COMPETITION
7-4

• GOALS
• Discuss the types of information businesses need
  to know about their competitors.
• Describe the kinds of activities businesses
  engage in to gain marketing intelligence.

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Types of Competitive Information

• Pricing strategies
• Distribution decisions
• Product/Service planning
• Promotional efforts
• Competitors market position

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Collecting Competitive Information

• Information sources
• Salespeople and other employees
• Analysis of competitors products.
• Articles, research reports, and public
  information
• Professional and trade publications
• Customers and customer records
• Trade shows
• The Internet
• Ethics in information gathering