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Principles of Marketing Lecture-40. Summary of Lecture-39.

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Presentation on theme: "Principles of Marketing Lecture-40. Summary of Lecture-39."— Presentation transcript:

1 Principles of Marketing Lecture-40

2 Summary of Lecture-39

3 Simple Marketing System Producer/SellerConsumer Communication Product/Service Money Feedback


5 Promotion Mix Advertising Personal Selling Sales Promotion Public Relations

6 Today’s Topics

7 Creating Competitive Advantage

8 Competitive Advantage – An advantage over competitors gained by offering consumers greater value than competitors offer.

9 Competitive Analysis – The process of identifying key competitors; assessing their objectives, strategies, strengths and weaknesses, and reaction patterns; and selecting which competitors to attack or avoid.

10 Competitor Analysis

11 Strengths & Weaknesses Reaction Patterns

12 Steps Identifying Competitors Assessing Competitors Selecting Competitors to Attack or Avoid

13 Identifying Competitors

14 Firms face a wide range of competition Be careful to avoid “competitor myopia” Methods of identifying competitors: – Industry point-of-view – Market point-of-view

15 Assessing Competitors

16 Determining competitors’ objectives Identifying competitors’ strategies – Strategic groups Assessing competitors’ strengths and weaknesses – Benchmarking Estimating competitors’ reactions

17 Selecting Competitors to Attack or Avoid

18 Strong or weak competitors – Customer value analysis Close or distant competitors – Most companies compete against close competitors “Good” or “Bad” competitors – The existence of competitors offers several strategic benefits

19 Designing Competitive Intelligence Systems

20 A Well-Designed CI System: Identifies types and sources of competitive information Continuously collects information Checks reliability and validity of information Interprets and organizes information Distributes information to decision makers and responds to queries

21 Competitive Strategies

22 Approaches to Marketing Strategy – No single strategy is best for all companies – Marketing strategy and practice often passes through three stages: Entrepreneurial marketing Formulated marketing Intrepreneurial marketing

23 Basic Competitive Strategies

24 Overall cost leadership Lowest production and distribution costs Differentiation Creating a highly differentiated product line and marketing program Focus Effort is focused on serving a few market segments

25 – Operational excellence Superior value via price and convenience – Customer intimacy Superior value by means of building strong relationships with buyers and satisfying needs – Product leadership Superior value via product innovation

26 Competitive Positions

27 Market Leader Market Challenger Market Follower Market Nicher

28 Market Leader

29 The firm with the largest market share in an industry

30 Expanding the total demand – Finding new users – Discovering and promoting new product uses – Encouraging greater product usage Protecting market share – Many considerations – Continuous innovation Expanding market share – Profitability rises with market share

31 Market Challenger

32 A runner-up firm that is fighting hard to increase its market share in an industry.

33 Option 1: challenge the market leader – High-risk but high-gain – Sustainable competitive advantage over the leader is key to success Option 2: challenge firms of the same size, smaller size or challenge regional or local firms Full frontal vs. indirect attacks

34 Market Follower

35 A runner-up firm that wants to hold its share in an industry without rocking the boat.

36 Follow the market leader – Focus is on improving profit instead of market share – Many advantages: Learn from the market leader’s experience Copy or improve on the leader’s offerings Strong profitability

37 Market Nicher

38 A firm that serves small segments that the other firms in the industry overlook or ignore

39 Serving market niches means targeting subsegments Good strategy for small firms with limited resources Offers high margins Specialization is key – By market, customer, product, or marketing mix lines

40 Balancing Customer and Competitor Orientations

41 Companies can become so competitor centered that they lose their customer focus.

42 Types of companies

43 Competitor-centered companies Customer-centered companies Market-centered companies

44 What next?

45 Global Village


47 Globalization

48 Global Marketplace

49 Global Marketing

50 Reasons for Global Marketing

51 Growth – Access to new markets – Access to resources Survival – Against competitors with lower costs (due to increased access to resources)

52 Global Firm A firm that, by operating in more than one country, gains R&D, production, marketing, and financial advantages in its costs and reputation that are not available to purely domestic competitors.

53 Global Marketing Vs. Marketing

54  Marketing is the process of planning and executing the conception, pricing, promotion, and distribution of goods, ideas, and services to create exchanges that satisfy individual and organizational goals.  Global marketing focuses on global market opportunities and threats.

55 Enough for today...

56 Summary

57 Creating Competitive Advantage

58 Competitor Analysis

59 Steps Identifying Competitors Assessing Competitors Selecting Competitors to Attack or Avoid

60 Competitive Strategies

61 Competitive Positions

62 Market Leader Market Challenger Market Follower Market Nicher

63 Global Marketplace

64 Next….

65 Global Marketing

66 Principles of Marketing Lecture-40

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