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2Chap002StrategicMarketing.pptxMarkets and Competitive Space
Chapter 02
Markets and strategies
Matching needs with product benefits
Defining and analyzing product-markets
Describing and analyzing end-users
Analyzing competition
Market size estimation
Developing a strategic vision about the future
Learning Objectives
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Markets and strategies are interlinked
An array of challenges
Markets and Strategies
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Challenges:
Markets are increasingly complex, turbulent, and interrelated
Need for a broader view of the market
Essential to develop a vision about markets are likely to change
Continuous monitoring is necessary to:
Identify promising business opportunities
Assess the shifting requirements of buyers
Evaluate changes in competitive positioning
Markets and Strategies
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Market changes require altering business and marketing strategies
Many forces are:
Causing the transformation of industries
Changing the structure of markets and nature of competition
Markets and Strategies are Interlinked
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These influences create market opportunities and threats by:
Altering the nature and scope of products, markets, and competitive space
Markets and Strategies are Interlinked
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Exhibit 2.1 - Opportunities Outside the Competitive Box
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Disruptive innovation
Commoditization threats
Creating new market space
Fast-changing markets
An Array of Challenges
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Product-market recognizes that a market exists only when:
There are buyers with needs who have the ability to purchase goods and services
Products are available to satisfy the needs
Matching Needs with Product Benefits
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Markets are comprised of groups of people who have:
The ability to buy something because they have a need for it
The willingness to buy something because they have a need for it
Matching Needs with Product Benefits
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Determining product-market boundaries and structure
Forming product-markets
Illustrative product-market structure
Defining and Analyzing Product-Markets
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Exhibit 2.2 - Defining and Analyzing Product-Markets
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Product-market structure
Generic product-market
Broad group of products that satisfy a general, yet similar, need
Product-type product-market
Brands of a particular product type, such as ovens for use in food preparation by consumers
Product-variants
Created by differences in the products within a product-type product-market may exist
Determining Product-Market Boundaries and Structure
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Guidelines for definitions
The basis for identifying buyers in the product-market of interest
The market size and characteristics
The brand and/or product categories competing for the needs and wants of the buyers included in the product-market
Determining Product-Market Boundaries and Structure
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Exhibit 2.3 - Determining the Composition of a Product-Market
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Includes:
Purpose of analysis
Changing composition of markets
Extent of market complexity
Functions
Technology
Customer segments
Forming Product-Markets
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Exhibit 2.4 - Illustrative Fast-Food Product-Market Structure
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Exhibit 2.5 - Illustrative Product-Market Structure
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Identifying and describing buyers
How buyers make choices
Environmental influences
Building customer profiles
Describing and Analyzing End-Users
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Characteristics such as family size, age, income, geographical location, sex, and occupation
Illustrative factors such as type of industry, company size, location, and types of products
Identifying and Describing Buyers
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Steps in the buying process:
Recognize a need
Seek information
Identify and evaluate alternative products
Purchase a brand
How Buyers Make Choices
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External factors that influence buyers’ needs and wants:
Government, social change, economic shifts, and technology
Not controlled by the buyer or the firms that market the product
But they can have a major impact on purchasing decisions
Environmental Influences
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Begin with the generic product-market
Likely to describe the size and general composition of the customer base
Product-type and variant profiles are more specific about customer characteristics
Building Customer Profiles
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Defining the competitive arena
Key competitor analysis
Anticipating competitors’ actions
Analyzing Competition
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Exhibit 2.8 - Analyzing the Competition
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Exhibit 2.9 - Examples of Levels of Competition
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Two kinds of information are needed:
A descriptive profile of the industry
An analysis of the value chain channels that link together the various organizations in the value-added system
The industry analysis includes:
Industry characteristics and trends
Operating practices of the firms in the industry
Industry Analysis
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Rivalry among existing firms
Threat of new entrants
Threat of substitute products
Bargaining power of suppliers
Bargaining power of buyers
Competitive Forces
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Exhibit 2.11 - Describing and Evaluating Key Competitors
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Estimating competitors’ future strategies
Identifying new competitors - Four major sources
Companies competing in a related product-market
Companies with related technologies
Companies already targeting similar customer groups with other products
Companies competing in other geographical regions with similar products
Anticipating Competitors’ Actions
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Market potential
Sales forecast
Market share
Evaluating market opportunity
Market Size Estimation
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Market potential - Maximum amount of product sales that can be obtained from a defined product-market during a specified time period
Sales forecast - Indicates the expected sales for a defined product-market during a specified time period
Market Size Estimation
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Market share of a firm - Determined by the company sales divided by the total sales of all firms for a specified product-market
Essentials in preparing forecasts to specify:
What is being forecast
Time period involved
Geographical area
Evaluating market opportunity
Projections of key competitors are useful in evaluating market opportunities
Market Size Estimation
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Exhibit 2.13 - Summary of Advantages and Disadvantages of Various Sales Forecasting Techniques
Source: Mark W. Johnston and Greg W. Marshall, Sales Force Management, 9th ed. (New York: McGraw-Hill/Irwin, 2009), 141.
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Exhibit 2.13 - Summary of Advantages and Disadvantages of Various Sales Forecasting Techniques
Source: Mark W. Johnston and Greg W. Marshall, Sales Force Management, 9th ed. (New York: McGraw-Hill/Irwin, 2009), 141.
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Exhibit 2.13 - Summary of Advantages and Disadvantages of Various Sales Forecasting Techniques
Source: Mark W. Johnston and Greg W. Marshall, Sales Force Management, 9th ed. (New York: McGraw-Hill/Irwin, 2009), 141.
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Phases of competition
Anticipating the future
Developing a Strategic Vision about the Future
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Phases of competition
Useful to distinguish between different phases in the development of competition
Anticipating the future
Organizations that choose to invest substantial time and effort in anticipating the future create an opportunity for competitive advantage
Developing a Strategic Vision about the Future
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Exhibit 2.14 - Developing a Strategic Vision
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