Competitor Analysis

Bases of Competition:
Customer oriented
Who they are: competition for the same budget When they use it Why they use it: benefits sought

Marketing oriented: advertising and promotion

Theme/copy strategy Media Distribution Price

Resource-oriented
Raw materials Employees Financial resources

Geographic

Levels of Competition:
Product form competition: This form of competition is a narrow view of competition because it considers only those products that look the same as the product or service in question. This might be an acceptable perspective in the short run, as these would be the most serious competitors on a day to day basis. Product category competition: This type of competition is based on products or services with similar features and is popularly called as product category.

 Generic competition: This is the 3rd level of competition and it is of longer term and focuses on substitutable product categories. At this level, competition and the market is defined 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 & product category competitors are defined by products that look like those we are producing. Generic competitors are defined by looking outside the firm to the customers.

 Budget competition: This is the broadest view of competition. It considers all products and services competing for the same customer share (in terms of money) as forming the market. While this view of competition is conceptually useful, it is very difficult to implement strategically since it implies an enormous number of competitors.

Competitor Selection
The practical implications of examining the competition at four levels to the product manager are as follows: The marketing strategy must be developed with an eye towards 4 different problems (1) convincing customers in your market segment that your brand is best (product form competition); (2) convincing buyers that your product form is best (product category competition), (3) convincing buyers that your product category is best (generic competition); and occasionally, (4) convincing buyers that the basic need your product fulfills is an important one.

 The product manager must choose a selective competitor focus. He/She can decide on which competitors to focus on by examining 3 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. After selecting the appropriate levels of competition i.e., by defining the market, the next step is choosing relevant competitors. This assessment may require preparing a preliminary competitor analysis or updating the previous plans competitor analysis.

Secondary data

Primary data

Key questions: Who are they? What are the competing product features? What do they want? What is their current strategy?

Competitor Analysis System

Differential competitor advantage analysis, i.e., who has the competitive product advantage?

What are they going to do?

Sources of Information
Secondary sources are generally less expensive and easier to obtain than primary data and often cover most of the important questions we need to know about competitors. Some of the popular secondary sources companies can use are:
Consultants Customer communications Internal sources Local newspapers Annual reports Patent filings Government Electronic databases News releases Trade associations Promotional literature Internet Trade press

Primary Sources of Competitor Information

Following is the list of the most important primary sources of information about competitors. Many of these are also sources of secondary information, depending on when the information was originally collected. Investment bankers Sales force Suppliers Customers Employees Consultants/Specialized Firms

Assessing Competitors Current Strategies

This stage of competitor analysis determines how competitors are attempting to achieve their objectives. It can be understood by examining their past and current marketing strategies. At the product level, a marketing strategy can be thought of in terms of three major components: target market selection, core strategy (i.e., positioning and differential advantage), and implementation (i.e., supporting marketing mix).

Comparing Value Chains Porters concept of value chain can be used to compare a brands or companys strengths and weakness against another. The different ways in which the product/service can be differentiated depending on value chain is as follows: Inbound logistics Operations advantage Outbound logistics Marketing and sales Service

Marketing Mix This is another important component of competitors that must be assessed. Pricing: any price-related information pertaining to the implementation of strategy is relevant. Promotion: sales promotion activities which types and how often are important. Distribution: the role of distribution channel in competitors market. ProductCapabilities: A major determinant of a companys capabilities is the physical makeup of its product or service, which in general, is less likely easily changed than price or advertising.

Assessing a Competitors Will Assessing competitors strength of will requires going beyond objectives to assess the intensity with which they approach the task. One can do so by assessing the following factors: 1. How critical is this product to the firm? 2. How visible is the commitment to the market? 3. How aggressive are the managers?