Levels of Market Competition -One way to delineate the set of competitors facing a brand is to consider the proximity of other

products to the physical attributes of the products question. Product Features It is the presence of characteristics or attribute. The value of a feature is the level of the characteristic or attribute. - The value of a feature is the level of the characteristics. Product Form It is the narrowest perspective one can take of competition. Product form competition is a narrow view of competition because it considers only those products that look the same as the product of service in question. This might be an acceptable perspective in the short run, as these would be the most competitors on a day-to-day basis. It is also a convenient definition of the competition because it mimics the way commercial data services often measure market shares. The second level of competition is based on those products or services with similar features. This type of competition, called product category, is what product managers naturally think of as the industry. For example, personal computers, fast food, television, and the like describe sets of competitors that are aggregates, or composites, of narrower product forms. The third level of competition is longer term and focuses on substitutable product categories. Term form competition by kotler. It defines the competition, and therefore the market, as consisting of those products and services fulfilling the same customer need. A critical difference between generically defined competitors and either product form or product category competition is that the former is outward oriented while the latter two are inward. Product form and product category competitors are defined by products that look like those we are producing. Product Strategy Implications The four level model of competition just described has significant implications for developing product strategy and for a product managers marketing problems. Different set tasks must be accomplished at each level of competition for a product to be successful in the market. At each level of competition, part of the job of the product manager is fairly clear, and marketing managers are trained to handle it Convince the costumer that your companys version of the product, your brand, is better than others available. In other words, your most direct competitors are other brands of like product form. At the product form level, none is required: clearly when the competition is viewed as consisting only of other products with similar levels of features, marketing activities aimed at the similar competitors are all that is required.

Overlapping Market Segments An additional and valuable way to conceptualize the definition of competitors based on market segments. Methods for Determining Competitors The easiest way to define competition is to let someone else do it for you. Managerial Judgment Through experience, sales person call report, distributors, or other company sources, product managers can often develop judgments about the sources of present and future competition. Cell D - competitors are the most difficult to predict, as they currently sell different products to different customer. Technology substitution is a particular relevant for technological products. Customer-Based measures Two types of customer data are commonly used to asses market structures: actual purchase or usage data and judgements. The former are particularly useful for understanding product form and category competition; because it is difficult to understand what alternatives were considered when actually made, the usual assumption is that purchases are made within a narrow definition of competition. Using Purchase Data A key source of purchase data used in consumer package goods application is data collected from electronics scanners. Using Customer Judgments Several methods have been proposed for estimating competition from customer judgments. Judged Overall Similarity Measures between pairs of products or brands can be used to create geometric representations in multidimensional spaces called perceptual maps. The brands or products are represented by points in the space, while the dimension represents the attributes customers use to make the similarity judgments. Brands located close to one another are judged to be similar and thus form a defined market. Similarity of consideration sets an approach developed by Bourgeois, Haines, and Sommers that asks customers to take a large set of products and divide them into groups of items that can be substituted for one another, that is, items that would be considered on a purchase occasion.

Product deletion an interesting approach to defining competition based on customer reaction to product unavailability. Products or brands in a set are presumed to be substitute and consequently form a market if, when one of them is deleted from the choice set, customers are more likely to buy from the remaining products than from products outside the original set. Substitution in use estimates degree of competitiveness through judged similarities of products in usage contexts. First, customers list all possible uses and contexts for a target product or brand. Next, either the original sample or a fresh sample of respondent list other products or brands that provide the same benefits or uses and rate their appropriateness for the different contexts or use occasions. This method clearly has the potential to produce a large number of generic competitors or even budget competitors.

Competitor Selection
Examining competition at four levels makes intuitive sense, and the practical implications for a product manager are substantial. One implication already mentioned is that marketing strategy must be developed with an eye toward four different problems: 1. Convincing customers in your market segment that your brand is the best (product form competition); 2. Convincing buyers that your product form is the best (product category competition); 3. Convincing buyers that your product category is best (generic competition); 4. Convincing buyers that the basic need your product fulfills is an important one. A second implication of the four levels of competition is that the product managers must choose a selective competitor focus. A product manager cannot be focus either analysis or strategy on every product in the market perceived to be a competitor due to limited available resources. The product manager can decide which competitors to focus on by examining three factors: 1. The time horizon of the marketing plan being developed, 2. The stage of the product life cycle relevant for the product, and 3. The rate of change in the technological base of the product In one-year Operating Marketing plan- primarily on a product from basis and secondarily using any other appropriate bases. On a day to day basis are in the product form or subcategory. The stage of product life cycle may relevant to defining competition because the breadth of view of industry varies over time In early growth stage of a product, particularly a new technology, competition must be broadly define (generic competition) Characteristic of the communication

Word processor Fax machine The internet Home computers Cable tv Satellite for compete for certain service

Enterprise Competition Ultimately products and services do not compete against one another; companies do. The resources a company has to support the product are a key determinants in its ability to successfully implement a marketing strategy. It is important to note that firm versus firm of enterprise competition involved a higher level of perspective in developing strategy.

Chapter 4 Category attractiveness Analysis Aggregate market factors Category sized Is an important piece of data about any market. It is clearly an important determinant of the likelihood that a product will generate revenues to support a given investment. Market Growth Is a key market factor advocated by various planning models. Not only is current growth important, but growth projection over the horizon of the plan are also critical. Fast-growing categories are almost universally desired due to their abilities to support high margins and sustain profit in future years. Product life Cycle Categories size and category growth are often portray simultaneously in the form of the product life cycle. This curve breaks down product sales into four segments: Introduction Growth Maturity Decline The introduction and growth phases are the early phases of life cycle when sales are growing rapidly, maturity represent a levelling off in sales, and the decline phase represents the end of the life cycle. Sales Cyclicality Many categories experience substantial inter year variation in demand highly capital intensive businesses are often tied to general business conditions and therefore suffer to peaks and values of sales as gross domestic product values. This is clearly not unattractive characteristic of a category, as this sales swings affect profits employment levels, and cash available for new product development. Seasonality Intra year cycles in sales is generally not viewed possibility. Seasonal business tends to generate price wars because there maybe few other opportunities to make substantial sales. Profits Vary across products or brands in a category. Large inter industry differences also exist. These differences in profitability across industries are actually based on a variety of underlying factors. Differences can be due to factors of production, manufacturing technology, and competitive rivalry to name a few. A

second aspect of profitability is that in varies overtime. Variants in profitability is often use as a measure of industry risks.

Category Factors
Threat of new entrants If the threat of new entrants into the product category is high, the attractiveness of the category is diminished. When new entrant can help a market to expand, new entrants bring additional capacity and resources that usually heighten the competitiveness of the market and the diminished profit margins. The barriers to entry erected by the existing completion are key to the likelihood that new competitors that will enter the market. Economies of Scale An important barrier to entry in the automobile industry is the large plant size needed to operate efficiently, obtain quantity discount on raw materials and so on. Product Differentiation Well-established brand names or company reputation can make it difficult for new competitors to enter. Capital Requirements Large amount of capital maybe necessary to established manufacturing facilities, chain store locations, or marketing programs. These capital are clearly not confine to plant and equipment. Switching Costs These are the costs of switching from one supplier to another. Supplier can be interpreted in business-to-businesses sense or in an and-customer context. If switching costs are high, as they are in the main frame computer and computer software businesses, it is difficult to convert a competitors existing customers. Distribution New product can find it difficult to obtain shelf space. The willingness of the competitors in the category to vigorously retaliate against new comers can also as a barrier. Bargaining power of buyers Buyers are any people or institution that received finished goods and services from the organization in the category being analyze. Buyers can be distributors, original equipment manufacturers or and customer. Suppliers are any institution that supply the category of concern with factors of production. Bargaining power of suppliers

This assessment is really the mirror image of the buyer power analysis. High supplier power is clearly not unattractive situation because it allows suppliers to dictate price and other terms. Current Category Rivalry Product categories characterized by intense competitions among the major participants are not as attractive as those in which the rivalry more seduce. The high degree of rivalry can result in escalated marketing expenditure, pricewars, employee raids. Pressure from Substitute Categories making product are delivering service for which there are a large number of substitute are less attractive than those that deliver a relatively

Category Capacity
Chronic over capacity is not a positive sign for long term profitability. When a category