Marketing Environment
Discuss the need to understand competitors as well as customers through competitor analysis
In order to prepare an effective marketing strategy, a company must consider its competitors as well as its
customers. Building profitable customer relationships requires satisfying target consumer needs better than
competitors do. A company must continuously analyze competitors and develop competitive marketing
strategies that position it effectively against competitors and give it the strongest possible competitive
advantage.
Competitor analysis first involves indentifying the company’s major competitors, using both an industry-based
and a market-based analysis. The company then gathers information on competitors’ objectives, strategies,
strengths and weaknesses, and reaction patterns. With this information in hand, it can select competitors to
attack or avoid. Competitive intelligence must be collected, interpreted and distributed continuously. Company
marketing managers should be able to obtain full and reliable information about any competitor affecting their
decisions.
Competitive advantage = an advantage over competitors gained by offering consumers greater value, either
through lower prices or by providing more benefits that justify higher prices.
Competitor analysis = process of identifying key competitors; assessing their objectives, strategies, strengths
and weaknesses, and reaction patterns; and selecting which competitors to attack or avoid.
Competitive marketing strategies= strategies that strongly position the company against competitors and that
give the company the strongest possible strategic advantage.
Competitive intelligence = continuous and in-depth, different sources: Field, Public data, Marketing research,
Of vital importance to highly competitive industries!
Steps in analyzing competitors:
Selecting which competitors to
Identifying the Assessing competitors’ objectives,
company’s strategies, strengths and attack or avoid.
competitors. weaknesses, and reaction patterns.
Determining competitors’ objectives: company wants to know the relative importance that a competitor places
Industry on current profitability, market share growth, cash flow, technological leadership, service leadership and other
point of goals. Knowing a competitor’s mix of objectives reveals whether the competitor is satisfied with its current
view situation and how it might react to different competitive actions.
(Porter’s Indentifying competitors ‘strategies: the company needs to look at all of the dimensions that identify strategic
groups within the industry. It must understand how each competitor delivers value to its customers. It needs to
Five
know each competitors’ product quality, features and mix; customer services; pricing policy; distribution
Forces of coverage; sales force strategy; and advertising and sales promotion programmes. And it must study the details
Competiti of each competitor’s R&D, manufacturing, purchasing, financial and other strategies.
on Strategic group = group of firms in an industry following the same or a similar strategy.
model) Assessing competitors’ strengths and weaknesses: marketers need to assess each competitor’s strengths and
weaknesses carefully in order to answer the critical question: what can our competitors do? Companies gather
data on each competitor’s goals, strategies and performance over the past few years. Also through secondary
data, personal experience and word of mouth. Or conduct primary marketing research with customers,
suppliers and dealers.
Benchmarking = process of comparing the company’s products and processes to those of competitors or
leading firms in other industries to find ways to improve quality and performance.
Estimating competitors’ reaction: What will our competitors do? A competitor’s objectives, strategies,
strengths and weaknesses go a long way towards explaining its likely actions. They also suggest its likely
reactions to company moves such as price cuts, promotion increases or new product introductions. In addition,
each competitor has a certain philosophy of doing business, a certain internal culture and guiding beliefs.
Marketing managers need a deep understanding of a given competitor’s mentality if they want to anticipate
how the competitor will act or react.
Discuss the need to understand competitors as well as customers through competitor analysis
In order to prepare an effective marketing strategy, a company must consider its competitors as well as its
customers. Building profitable customer relationships requires satisfying target consumer needs better than
competitors do. A company must continuously analyze competitors and develop competitive marketing
strategies that position it effectively against competitors and give it the strongest possible competitive
advantage.
Competitor analysis first involves indentifying the company’s major competitors, using both an industry-based
and a market-based analysis. The company then gathers information on competitors’ objectives, strategies,
strengths and weaknesses, and reaction patterns. With this information in hand, it can select competitors to
attack or avoid. Competitive intelligence must be collected, interpreted and distributed continuously. Company
marketing managers should be able to obtain full and reliable information about any competitor affecting their
decisions.
Competitive advantage = an advantage over competitors gained by offering consumers greater value, either
through lower prices or by providing more benefits that justify higher prices.
Competitor analysis = process of identifying key competitors; assessing their objectives, strategies, strengths
and weaknesses, and reaction patterns; and selecting which competitors to attack or avoid.
Competitive marketing strategies= strategies that strongly position the company against competitors and that
give the company the strongest possible strategic advantage.
Competitive intelligence = continuous and in-depth, different sources: Field, Public data, Marketing research,
Of vital importance to highly competitive industries!
Steps in analyzing competitors:
Selecting which competitors to
Identifying the Assessing competitors’ objectives,
company’s strategies, strengths and attack or avoid.
competitors. weaknesses, and reaction patterns.
Determining competitors’ objectives: company wants to know the relative importance that a competitor places
Industry on current profitability, market share growth, cash flow, technological leadership, service leadership and other
point of goals. Knowing a competitor’s mix of objectives reveals whether the competitor is satisfied with its current
view situation and how it might react to different competitive actions.
(Porter’s Indentifying competitors ‘strategies: the company needs to look at all of the dimensions that identify strategic
groups within the industry. It must understand how each competitor delivers value to its customers. It needs to
Five
know each competitors’ product quality, features and mix; customer services; pricing policy; distribution
Forces of coverage; sales force strategy; and advertising and sales promotion programmes. And it must study the details
Competiti of each competitor’s R&D, manufacturing, purchasing, financial and other strategies.
on Strategic group = group of firms in an industry following the same or a similar strategy.
model) Assessing competitors’ strengths and weaknesses: marketers need to assess each competitor’s strengths and
weaknesses carefully in order to answer the critical question: what can our competitors do? Companies gather
data on each competitor’s goals, strategies and performance over the past few years. Also through secondary
data, personal experience and word of mouth. Or conduct primary marketing research with customers,
suppliers and dealers.
Benchmarking = process of comparing the company’s products and processes to those of competitors or
leading firms in other industries to find ways to improve quality and performance.
Estimating competitors’ reaction: What will our competitors do? A competitor’s objectives, strategies,
strengths and weaknesses go a long way towards explaining its likely actions. They also suggest its likely
reactions to company moves such as price cuts, promotion increases or new product introductions. In addition,
each competitor has a certain philosophy of doing business, a certain internal culture and guiding beliefs.
Marketing managers need a deep understanding of a given competitor’s mentality if they want to anticipate
how the competitor will act or react.
