Competitors, Collaborators, and Customers

COLLABORATORS Types of collaborators:

1. Agencies - the middlemen of the business world 2. Suppliers - provide raw materials 3. Distributors - help manage manufacturer relationships and handle vendor relationships 4. Partnership - share assets and liabilities

Competitor analysis

1. id the company's competitors 2. assess competitors' objectives, strategies, strengths and weaknesses, and reaction patterns 3. select which competitors to attack or avoid

Family is the most important consumer buying organization in society

41% of men are now the primary grocery shoppers 39% handle most of their household's laundry Women outspend men three to two on new technology purchases Children are influential in decision making, even over products that are not expressly for them (up to 80% of all household purchases)

Market follower

A firm that follows developments of the market leader and market challenger but does not threaten either of them follow closely; follow at a distance

Strategic group

A group of firms in an industry following the same or a similar strategy

Understanding the economic environment

Asks questions like: Is the market's economy strong or weak? How is consumer confidence changing over time? What economic factors, such as unemployment, inflation, and debt levels, are affecting consumer confidence? What is the income dispersion in the market? Which segments have enough purchasing power to purchase the product today and which are likely to in the future?

Buyer's black box

Buyer's characteristics Buyer's decision process

Buyers responses

Buying attitudes and preferences Purchase behavior: what the buyer buys, when, where, and how much Brand and company relationship behavior

The first 4 c's: customers, company, competitors, and collaborators

Make up the microenvironment The actors close to the company that affects its ability to engage and serve its customers

Social influence

Membership group - person belongs to it, exerts direct influence Reference group - group that serves as a point of comparison/reference Opinion leaders - people within a reference group who, because of special skills, knowledge, personality, or other characteristics, exert social influence on others

Multiple niching

Niching carries some major risks. For example, the market niche may dry up, or it might grow to the point that it attracts larger competitors. That is why many companies practice multiple niching By developing two or more niches, a company increases its chances for survival

Market challenger

a firm that has a market share below that of the market leader, but enough of a presence that it can exert upward pressure in its effort to gain more control. Market challengers are able to jockey for industry leadership in several ways: Challenging the market leader on price (direct approach) Full frontal attack Indirect attack

Competitive advantage

an advantage over competitors gained by offering consumers greater value Cost leadership - increasing profits by reducing costs Better quality of important attributes Small groups

Customer value analysis

an analysis conducted to determine what benefits target customers value and how they rate the relative value of various competitors' offers Example: A laptop targeting college students (relative value to college students)

Market leader

expand total market, protect market share, and expand market share

Market nichers

firms that serve small market segments not being pursued by other firms

Emotional benefits

how does a consumer ultimately feel about your brand?

The context/climate

makes up the macroenvironment The larger societal forces that affect the microenvironment

Competitor myopia

setting the boundary of their competition too narrow

Second mover advantage

the challenger can observe what has made the market leader successful and improve on it

Word of mouth

the personal words and recommendations of trusted friends, acquaintances, and other consumers 7% increase in positive WOM = 1% increase in sales 2% increase in negative WOM = 1% decrease in sales

CUSTOMERS The model of buyer behavior

the stimulus-response model Stimuli enter the consumer's black box and produce certain responses

Selective attention

the tendency for people to screen out most of the information to which they are exposed

Selection distortion

the tendency of people to interpret information in a way that will support what they already believe

Selective retention

the tendency to remember good points made about a brand they favor and forget good points made about competing brands

Natural environment

understanding consumers' connection to and concern for the natural world, as well as how your own product and operations are reliant upon and affect the natural environment Considering climate and air quality

Political environment

understanding how laws and political practices can enable growth or hinder the company's potential in various markets

Technological environment

understanding how technology is affecting consumers and their purchasing needs and habits

Cultural environment

understanding prevailing worldviews, political and social ideologies, value systems, traditions and rituals, and fashion and taste system The most basic determinant of a person's wants and behavior Culture influences how needs are translated into wants

Demographics

understanding the current state and future direction of the population in a market

Economic environment

understanding the macroeconomic and microeconomic conditions facing consumers in the market

Product attributes

what are the defining features of your product or service?

Product benefits

what functional benefits do these features provide?

Consumer benefits

what value does a consumer get from these benefits?

6 important forces in the macroenvironment:

Demographics Economic Natural Technological Political Cultural

Determining competitors' objectives

Ex: profitability, market share growth, cash flow, cost leadership, technological leadership

How do we define competitor

Generally based on primary functional value of the product Competitive products do not have to be in the same market Direct competitors vs. indirect competitors

Second - third - mover advantage

Learn from the leader's experience Much less investment

Helpful competitors

Low market development cost Low product development cost