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PRODUCT MANAGEMENTCHAPTER 4: Defining the competitive set
LEARNING OBJECTIVES:
After studying this chapter, you should be able to:
1. Understand what is a competitive set2. Identify the levels of market
competition3. Understand the methods of
determining competitors
CHAPTER OUTLINE
1. Overview of the competitive set2. Levels of market competition3. Methods of determining competitors
Bases of Competition
I. Customer-orientedWho they are – competition for same budgetWhen they use itWhy they use it- benefits sought
II. Marketing-oriented: advertising and promotion
Theme/copy strategyMediaDistributionPrice
Bases of Competition cont.
III. Resource-orientedRaw materialsEmployeesFinancial resources
IV. Geographic
Levels of Competitions
Def : The proximity of other products to the physical attributes of the product in question
In terms of product form, product category, generic competition and budget competition
Levels of Competition
Diet lemon limes
Baseball cards
Fruit flavored colas
Coffee
DietCoke
DietPepsi
Diet-Rite cola
Bottled water
Lemon limes
Regularcolas
Beers
Juices
Wine
Fast food
Tea
Video rentals
Icecream
Product form competition: Diet colas
Product category competition: Soft drinks
Generic competition: Beverages Budget
competition: Food and entertainment
Levels of Competition: Implications for Product Strategy
Budget
Generic
Product Category
Product Form
Competitive Level
Convince Customers that the Brand is Better than Others
Convince Customers that the Product Form is Best in the
Category
Convince Customers that the Product Category is the Best
Way to Satisfy Needs
Convince Customers that the Generic Benefits are the Most
Appropriate Way to Spend their Money
Product Management Task
Methods For Determining Competitors Managerial judgment Customer-based Measures
Managerial Judgment
Experience Salesperson call reports Distributors Other company sources
Managerial judgment
Markets Product/Services
Same Different
Same A B
Different C D
Customer-Based Measures
Behavioral data Customer Judgements
Behavioral Data
Time t + 1
Time t
A B C D E
A .6 .2 .2 0 0
B .2 .3 .4 .1 0
C .2 .3 .5 0 0
D 0 .1 .1 .5 .3
E .1 0 0 .4 .5
Customer Judgments
Judged overall similarity Similarity within consideration Product deletion Substitution in use