COMPETITION IS EVERYWHERE

7.17.1 Targeting Market Segments

7.27.2 Positioning for Competitive Advantage

7.37.3 Competing for Market Segments

7.47.4 Learning About the Competition

TARGETING MARKET SEGMENTS

GOALSGOALS for Lesson 7.1 Describe how markets can be

segmented by geographic location, demographic characteristics, psychographics, product usage, and benefits derived.

Explain how to evaluate market potential and calculate market share.

Identifying Market Segments

Marketing Segment – a group of individuals or organizations within a larger market that share one or more important characteristics.

Mass Marketing – aimed at a broad population of consumers rather than a narrow segment.

Identifying Market Segments

Geographic segmentation – dividing customers based on where they live

Demographic characteristics – age, gender, race, income, education

Psychographics – people’s interests and values

Identifying Market Segments

Product usage – frequency with which consumers use a product.

Benefits derived – divides the population into groups depending on the value they receive form the product or service.

Analyzing Market Segments

1. Number of potential consumers2. Interest in the product or service and

other mix elements3. Money available to make the

purchase4. Ability to communicate with

consumers through the promotional mix

Market Segment Analysis

People who like to ski

People who vacation at ski resorts

People who read ski magazines

People with annual income over $50,000

Market Potential

Market potentialMarket potential is the total revenue that can be obtained from the market segment.

Market Share

Market shareMarket share is the portion of the total market potential that each company expects to get in relation to its competitors.

Review Activities

Review Questions, pg. 170, #1-4

Review Activity, pg. 185, #28, a - e

POSITIONING FOR COMPETITIVE ADVANTAGE

GOALSGOALS for Lesson 7.2 Explain the various bases for

positioning a product to distinguish it from the competition.

Describe the three common positioning strategies.

Positioning To highlight differences between

competitors in the mind of the consumer that may influence purchases.

Market Position – refers to the unique image of a product or service in a consumer’s mind relative to similar competitive offerings.

Bases for Positioning

Attribute – product characteristics or features

Price and quality – desired level of quality in the product and establishing an appropriate price

Use or application – stressing unique uses

Bases for Positioning Product user – encourages use of a

product or service by associating a personality or type of user with the product

Product classification – to associate with a particular category

Competitor – demonstrate how they positioned against competitors

Market Position

Laundry Product A Laundry Product BAttribute

Cleans quickly and easily Leaves fresh scentPrice and Quality

Low price, good value Higher price for highest qualityUse or Application

Use as pre-wash on tough stains Use for hand-washing delicatesProduct User

Homemaker’s reliable friend New generation’s discoveryProduct Classification

Used by Olympic athletes Used by professional laundriesCompetitor

Gets out dirt Product B can’t Gentler on clothing than Product A

Positioning Examples

Attribute - Windex - http://www.funnyville.com/funny-commercials/windex.html

User - Pepsi - http://www.pepsinut.com/pepsi_slogans.htm

Price/Value - Wal-Mart – see favorites Classification - Titleist Golf Balls -

http://www.titleist.com/myt/default.asp?choice=initials-420.flv

Selecting a Positioning Strategy

Consumer perceptions are the images consumers have of competing goods and services in the market place

Ex. – Hersey produces the ideal chocolate bar

Ex. – BMW the ultimate driving machine

Selecting a Positioning Strategy Competition – that your product is

superior to the competition Ex – Coke vs. Pepsi

Business environment – changes that might affect the position of its products or services Ex – golf clubs (new technology)

Positioning Strategy?

Hospital’s Emergency Services Fast Food Furniture Guitar Classes Cell Phones Energy Drinks If you were a business owner, which

positioning technique would be best for each product or service? Why?

COMPETING FOR MARKET SEGMENTS

GOALSGOALS for Lesson 7.3 Explain direct vs. indirect competition

and price vs. non-price competition. Describe the benefits of competition

to consumers.

Types of Competition for Positioning

Direct competition – competition in a market segment with businesses that offer the same type of product or service Marriott vs. Hyatt McDonalds vs. Burger King

Types of Competition for Positioning

Indirect competition – competes with a product that is outside its product classification group.

Ex –

Types of Competition for Positioning

Price competition – emphasis on price when companies compete.

Ex – restaurants, grocery stores, airlines

Types of Competition for Positioning

Non-price competition – emphasis on non price factors, quality, brand, location, or service

Ex – insurance companies, high end products.

Benefits of Competition Consumer receives the best price for

products available. Competition encourages improvements in

products with the addition of unique features and benefits.

Businesses are always looking for new and improved products to put into the marketplace to compete with their competitors.

Competition offers consumers the benefit of a wide variety of products from which to choose.

Product Development Project – Element #4

Competition Analysis – 7.2 and 7.3

Who are your competitors? Who are your direct competitors?

What are their strengths and weaknesses? How can you use them to help your business?

Who are your indirect competitors?

How are you going to position your product, what are the bases for the positioning, why?

LEARNING ABOUT THE COMPETITION

GOALSGOALS for Lesson 7.4 Discuss the types of information

businesses need to know about their competitors.

Describe the kinds of activities businesses engage in to gain marketing intelligence.

Types of Information Price Distribution Product/Service planning Promotion Competitor’s market position

Sources of Information

Marketing IntelligenceMarketing Intelligence Attend trade shows Talk to customers Analyze sales reports Ship in competitor’s business Subscribe to information services Examine competitor’s product

Collecting and Analyzing Information

Collection is an organized process Objectives

To identify the strengths and weaknesses of key competitors

To assess competitors’ current market strategies

To predict competitors’ future actions