GUIDE TO COMPETITIVE ANALYSIS
(Use with CLA 1 Part 1 of 2)
While most of the marketing process is concerned with meeting the needs of customers, it is extremely important to identify and understand your competitors. The development of your marketing mix strategy will be heavily influenced by what strategy your competitors are using. You will learn there are two types of competitors, direct and indirect. Direct competitors offer consumers a product that is almost identical to yours. Indirect competitors offer a different product that meets the same consumer needs as your product, only in a different way.
For example if you make Frito Lay potato chips, you are a direct competitor might be Pringles potato chips, while your indirect competitor might be Orville Redenbacher popcorn. Both appeal to the consumer need for a snack food that Frito-Lay does – Pringles with an almost identical product, Redenbacher with a different product.
The competitive analysis of your chosen product consists of two parts:
- Industry analysis
- Competitor analysis
- Industry analysis
- The industry concept: an industry is a group of firms that offer a product or products that are substitutes for each other.
- Identify the major companies (select 1 or 2) in your product’s industry.
- Discuss the nature and strengths of competitive threats by firms that are defined as competitors (select 1 or 2).
- Competitive analysis
Identify your products major direct competitors. This group will be referred to for other parts of this assignment. For each direct competitor, identify its:
- Strategies: determine the nature of competitive strategies in your industry.
- Objectives: are your products direct competitors looking to maximize sales or profits? Are they trying to gain market share or a new target market? What are they trying to accomplish?
- Strengths and weaknesses: classify each identified competitor according to strength and weaknesses and justify your answer. You should not exceed 2 competitive companies.
- Do some research to estimate the size of the current market for your product and the market share for your company and market share for each of your identified competitors.
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GUIDE TO THE MARKETING MIX ANALYSIS
(CLA 1 Part 2 of 2)
Kotler defines marketing mix as:
A set of tools that the firm uses to pursue its marketing objectives in the target market.
These tools are classified into four broad groups, called the ‘four P’s’ of marketing, or the marketing mix. Each P has a number of variables to it. The marketing mix includes: product, place or distribution and supply chain, price and promotion. How will each one be effective and how will they work together in your marketing plan? By selecting and defining how and which marketing P components are used, marketers create a marketing mix that positions and differentiates their product in the marketplace.
Prepare a 3 to 4 page marketing strategy and competitive analysis by examining the variables of the 4 P’s used in your product or service. Identify which variable of each P was used and explain how it was used. For example, one of the variables under product may be quality. If the retail price of the product/service is less than most comparable products, you can safely assume that the marketer decided to go with a lower quality product.
Another example under the product variable is brand name. Look at the name of your product. Does it use a brand name similar to other products make by the company or a totally new name? For example, when Gatorade launched their new bottled water, they called it Propel, and not Gatorade Water.
These are the types of questions to address in this analysis:
How is the product ‘positioned’ (or perceived by the consumer as compared to the competition) in the marketplace? What perception of the product is the manufacturer trying to put into the consumer’s mind? How is it differentiated from similar products produced by the competition?
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