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The Competitive Market. BMI3CC. 4 Ps and 2 Cs of Marketing. The study of marketing can be narrowed down to the 4 Ps and 2 Cs 4 Ps: Product Price Placement Promotion 2 Cs: Customer/Consumer Competition We spent a few days studying consumers, now we will learn about competition.

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The Competitive Market

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The Competitive Market


4 Ps and 2 Cs of Marketing

  • The study of marketing can be narrowed down to the 4 Ps and 2 Cs

  • 4 Ps:

    • Product

    • Price

    • Placement

    • Promotion

  • 2 Cs:

    • Customer/Consumer

    • Competition

    • We spent a few days studying consumers, now we will learn about competition

The Benefits of Competition


    • Why is competition good for consumers?

    • Why is competition good for companies?

The Benefits of Competition

  • Increased Selection

  • Alternative Choices – i.e. bad service

  • Better Prices

  • Increased Productivity

  • Product Improvements

  • Technology Advancements

Competition in a Free Market

  • In a free market, businesses can make a profit. Profit drives business; the more successful a business becomes, the more profit the owner keeps. (private property)

  • Competition is allowed and defines the structure of market

Four major market structures

  • Perfect competition - large # of small companies; nobody controls market

    • Agricultural Market, eBay

  • Monopolistic Competition – large # of companies; each of them has an opportunity for market control

    • Most products e.g. detergent, fast food

  • Oligopoly - small # of large companies, each with a substantial amount of market control

    • Banking Industry, Apple, Microsoft, Android

  • Monopoly – a single company has complete market control

    • Hydro, LCBO

  • Types of Competition

    • Direct competition

      • Products that are similar

      • Consumers choose among products in the same category

    • Indirect competition

      • Every business is in competition with every other business for consumers’ discretionary income.




    In-Class Task – 10 minutes

    • Pg. 88  3 b & c

    Competitive Advantage

    • Businesses look for advantages over their competition. A true advantage is one that is sustainable over the long term.

    • Sustainable competitive advantages: methods by which a business holds on to its customers, in spite of the competition (ideas?)

    Under the influence

    • “Tales of customer service”

      • Read the article

      • Answer the following questions:

      • List three extraordinary examples of customer service.

      • What was the point of Nancy writing the letters? What did the results show?

      • How does a restaurant that is rated 10th best food, and worse for decore, end up rated 3rd best restaurant in Manhatten?

      • What happened when a Chevy dealership matched the Disney model of customer service?

      • Summarize this article in 5 or fewer words.

    Sustainable competitive advantages

    • Create a unique selling proposition (USP) – patented design, licensed products

    • Lowering production costs: cost-efficient, high technology manufacturing systems

    • Servicing a niche market – keep competitors out of that market

    • Create customer loyalty – relationship marketing

    Non-sustainable competitive advantages

    • Non-SP used by competitors to shift sales in their direction

      • Promotion: “top of mind”

      • Placement: more placement=more competitive (Chapters – category killer)

      • Quality

      • Benefits of use: do more and better than other products

      • Price: all features being equal…

      • Design features: catch consumers’ interest – product design


    Before entering a market, marketers must study the competition. One way of doing so is by preparing a competitive analysis of the sustainable and non-sustainable advantages that the major competitors have. In this activity, you will develop a comparative analysis for a marketer in the video game market.

    Activity Time – try it for yourself!

    Competitive Advantages

    Sony Play Station 4

    Microsoft’s Xbox One


    Unique Selling Position


    Cost Advantage

    Customer loyalty





    Benefits of Use


    Product’s design features

    Competitive Advantages

    Sony Play Station 2

    Microsoft's Xbox


    Unique Selling Position

    Yes. System doubles as a CD and DVD player. 

    Yes. Ethernet port for rich, fast-action online gaming via a broadband connection.


    No. Video game systems are very popular.

    No. Video game systems are very popular.

    Cost Advantage

    No. All manufacturers of video game systems have access to inexpensive electronic components produced in countries with cheaper labour costs.

    No. All manufacturers of video game systems have access to inexpensive electronic components produced in countries with cheaper labour costs. 

    Customer loyalty

    Yes. Sony Play Station is better known. Consumers are familiar with it. Many have used Sony Play Station 1 for years. 

    No. This is Microsoft's first venture into this market. 



    Yes. Sony promoted its new product in time for Christmas gift giving.

    Yes. Introduced and well promoted by Bill Gates.


    Yes. In stores and online at the Sony Store.

    Yes. In major stores and online.


    No. Both products have equally high quality. 

    No. Both products have equally high quality.

    Benefits of Use

    Yes. Games for Play Station 1 can be used as well as a wide selection of new games for this system. Doubles as a DVD and CD player.

    Yes. 67 games now available. Many games are educational in nature.


    Yes. U.S. $299.99.

    No. Introductory price was much higher.

    Product's design features

    No. 128 bit, 300 Mhz processor.

    No. Video system delivers the most realistic games.

    Service Competition

    • Some Businesses offer services: Fed Ex, Moving companies)

    • Others offer Value – Added Services:support the sale of a product or other service.

    • Both service businesses and businesses that offer value-added services market intangibles. (hair salons, dentists, personal trainers)

    Service Competition

    Service companies are in competition with other companies that perform the same service.

    e.g., UPS vs. FedEx

    • Convenience

      • Internet shopping, ease of use

    • Degree of service

      • e.g., Barber vs. Hair Salon

    • Selection

    • Reputation

    • Price


    • Making some activity easier or more comfortable. Some services actually sell convenience.


    • offers more services (full service salon/spa) or fewer services (West Jet, Ikea)


    • Offering a greater selection of services

      • Wide – a store carries a wide array of different brands of types of merchandise or it can be

      • Deep – a store carries a large quantity of one specific product or type of product.

      • See page 103


    • Important for a service business to maintain a good reputation because it does not have a tangible product to show the customer (word of mouth, professional reviews)


    • If two services are similar, the business with the lower price has the competitive edge.

    • However, in some cases, consumers may question services with prices that seem ‘too low’.

    • Price depend on supply & demand

    Product/Service Mix

    • Retail & wholesale businesses are part of the service sector, providing a service to both the consumer and to the manufacturer…

    Measuring Results

    • We compare within certain market segments to understand how a company performs vs. the competitive set. (Direct Competition)

    • How it is Measured:

      • Market Share – what % of the category or sector sales is a certain brand

      • Example:

    Ready to Drink, Chilled Fruit Juice Market

    18% market share

    Market follower – how to increase market share from leader?


    • 59% market share

    • Market leader – how to sustain position over compeititors?

    Competing within Sectors

    • How can a company improve MARKET SHARE?

    • A company can increase market share in one of two ways:

      • increase the size of the overall market

        • E.g. Drink more juice

      • take sales away from its competitors.

        • Other promotion effort

        • School Cafeteria, etc.

    International Competition

    • What do you think the impact has been of the internet with international competition?

    • Multinational Corporations

      • Does business in more than one country

      • Some large MNCs have budgets greater than an entire country’s wealth!

      • Trend of “micro-multinationals” = small businesses enabled by technology


    International-based products/companies

    Produced outside of North America

    International Competition


    • Canadian products

    • Domestic production or international production

    May want to expand internationally

    for future growth

    Factors to consider with

    International Competition

    Factors to consider with International Competition

    • Regulations

      • Promotion restrictions / local laws

    • Research

      • Consumer preferences / consumer needs

    • Distribution

      • How will it be sold? Local partners?

    • Pricing

      • Covering expenses, plus tariffs

    • Design

      • Legal standards + local taste

    Competing in International Markets

    • Businesses use the same methods to compete in international markets that they use in domestic markets: promotion, placement, quality, benefitsofuse, price & design

    • Business must tailor its competitive efforts to the foreign market customs and preferences.


    • It is important to consider factors such as climate and religious beliefs when considering entering a foreign market.

    • For example, there is no market for Canadian pork in Israel, as Jewish culture forbids eating this product.

    The name Coca-Cola in China was first rendered as Ke-ke-ken-la. Unfortunately, the Coke company did not discover until after thousands of signs had been printed that the phrase means "bite the wax tadpole" or "female horse stuffed with wax" depending on the dialect. Coke then researched 40,000 Chinese characters and found a close phonetic equivalent, "ko-kou-ko-le," which can be loosely translated as "happiness in the mouth."


    Named the sedan version of Golf the Jetta. However, the letter "J" doesn't exist in the Italian alphabet, so Jetta is pronounced "Ietta", which means Misfortune...


    Sells this workbench as the FARTFULL. Swedish is a Germanic language, and "Fährt" is German for travel, so "fartfull" is being used here to suggest mobility. Swedish has several words for fart, but one of them is "Fjärt", which strikes as close enough that their marketing department knew what it was doing. If even bad press is good public relations, then this is a case of allowing an ill wind to blow some good.


    In Taiwan, the translation of the Pepsi slogan "Come alive with the Pepsi Generation" came out as "Pepsi will bring your ancestors back from the dead."

    • Promotion is challenging in international markets. In many cases, a Canadian promotion may not translate well in other countries

    • Distribution of products in other countries can also be difficult. Canadian firms may set up their own offices in other countries, or they may enter into joint ventures.

    Joint Venture

    • A Canadian firm and a foreign business with similar goals combine resources (money, facilities, distribution networks) to make or sell a specific product in another country

    • Tariffs are taxes placed on goods being imported into a country in order to protect the local industries from too much foreign competition.

    • Marketers must also be able to calculate the landedcost of the product which takes into account the shipping costs and the currency exchange as well as tariff rates.

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