Chapter 9Dealing with the Competitionby.ppt

Chapter 9Dealing with the Competitionby PowerPoint by Milton M. Pressley University of New Orleans Kotler on Marketing Poor firms ignore their competitors; average firms copy their competitors; winning firms lead their competitors. Chapter Objectives In this chapter, we focus on five things companies need to know about their competition: Who the primary competitors are How to ascertain their strategies, objectives, strengths and weaknesses, and reaction patterns How to design a competitive intelligence system Whether to position as market leader, challenger, follower, or nicher How to balance a customer versus competitor orientation Figure 9-1: Five Forces Determining Segment Structural Attractiveness Figure 9-2: Barriers and Profitability Identifying Competitors Industry Concept of Competition Industry Number of Sellers and Degree of Differentiation Pure monopoly Oligopoly Pure oligopoly Differentiated oligopoly Monopolistic competition Pure competition Identifying Competitors Entry, Mobility, Exit Barriers Entry barriers Mobility barriers Exit barriers Cost Structure Degree of Vertical Integration Vertical integration Degree of Globalization Market Concept of Competition Figure 9-3: Competitor Map – Eastman Kodak Analyzing Competitors Objectives Table 9-1: Customer’s Ratings of Competitors on Key Success Factors Analyzing Competitors Three Variables to Monitor When Analyzing Competitors: Share of market Share of mind Share of heart Table 9-2: Market Share, Mind Share, and Heart Share Analyzing Competitors Reaction Patterns 1. If competitors are nearly identical and make their living the same way, then their competitive equilibrium is unstable. 2. If a single major factor is the critical factor, then the competitive equilibrium is unstable. 3. If multiple factors may be critical factors, then it is possible for each competitor to have some advantage and be differentially attractive to some customers. The more factors that may provide an advantage,