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Marketing Fundamentals. COMPETITION. What is Competition?. Two or more businesses trying to sell the same type of product or service to the same customer. Market Share. The percentage of the sales volume of a total market held by a specific company

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What is competition

What is Competition?

Two or more businesses trying to sell the same type of product or service to the same customer

Market share
Market Share

  • The percentage of thesales volume of a totalmarket held by a specificcompany

    • If the cereal market isvalued at $10 billionand General Mills isworth $2.5 billion,what is its market share?

    • 2.5 billion / 10 billion = 25%

Competitive strategies
Competitive Strategies

  • Allows the company to hold onto or increase its market share

  • Achieved by gaining a ‘competitive advantage’

    • An advantage over competitors by offering consumers greater value

Competitive strategies1
Competitive Strategies

  • Answering the Questions

    • “What Are You Best At?”

    • “Why do your customers buy from you?”

    • Bikram yoga is a type of hot yoga class

Sustainable competitive advantages
Sustainable CompetitiveAdvantages

  • Must be part of the overall marketing strategy

    1. Developing a Unique Selling Proposition (USP)

    • The feature or benefit of a product or service that cannot be easily duplicated

    • iPhone 4 FaceTime

      2. Lowering Production Costs

    • Using cost-efficient, high technology processes to reduce costs and then charge a lower price

Sustainable competitive advantages1
Sustainable Competitive Advantages

3. Servicing a niche market

  • One company provides a productor service for a small market and,by doing so, keeps competitors outof the market

  • Three Dog Bakery

    4. Creating Customer Loyalty

  • The consumer develops a strongrelationship with the product or theretailer

  • Consumer does not consider anotherbrand or store unless the favoredproduct/retailer makes a big mistake

  • P&G 2012 Olympic Games Commercial

Non sustainable competitive advantages used by competitors to shift sales in their direction
Non-SustainableCompetitive AdvantagesUsed by competitors to shift sales in their direction

  • Promotion

    • To create top-of-mind awareness

    • Increase sales

    • Gain consumer loyalty

      Tim Horton’sRoll Up The Rim to Win

  • Placement

    • It must be where consumers want it, when consumers want it

    • Moncton Coffee Shops

      26 Tim Horton’s

      3 Starbucks

      2 Second Cups

Non sustainable competitive advantages
Non-SustainableCompetitive Advantages

3. Quality

  • Being the best of its type

    • Stronger, faster, easier, lighter, etc.

    • Adding features to improve a product

    • 2010 US Open Promotional Commerical

      4. Benefits of Use

  • The more benefits of use the better

  • Promote additional benefits to differentiate from competition

    • What benefits can you choose to promote?

    • Lexus Hybrid Commercial

Non sustainable competitive advantages1
Non-SustainableCompetitive Advantages

5. Technology

  • Using a better technologyor offering a moreinnovative product

  • iPad Commercial

    6. Price

  • All features equal, price must be lower than competitors to be a competitive advantage

  • Hard to sustain because prices change all the time

  • IKEA Winter Sale Commercial

Non sustainable competitive advantages2
Non-Sustainable Competitive Advantages

7. Design Features

  • The function and form of the product

  • E.g. A car’s design makes it move from one place to another (function) and defines its color and shape (form)

  • We often buy for the ‘look’ of the product when the function is the same

  • Packaging becomes important too


    ~Complete the Competitive Advantage Worksheet~

    In Groups of 3 or 4

Example of non sustainable promotion
Example OfNon-Sustainable: Promotion

  • Dove had risen rapidly to global sales above $2 billion last decade on expansion into new categories and a "Campaign for Real Beauty," but as the brand lost momentum and started to reverse.

  • Recently Dove's sales soaring 9.8% to $687 million, with gains in skin care, hair care and deodorant

  • Success is owed to a change in marketing

  • Why the Dove Campaign for Real Beauty is Hard to Sustain

Direct vs indirect competition
Direct vs. Indirect Competition



When companies with products that are NOT similar are in competition for consumer’s income

e.g. What can you buy for $20.00?

  • When companies with products that are very similar are competing for the same market

    • e.g. Coke and Pepsi, Nike and Adidas

  • Complete the Competitive Advantage Activity

  • In Groups of 3 or 4