Transcript Marketing Techniques

The competitive field
Knowing how to define the competition,
Using a methodological analysis tool,
Knowing how to identify the type of competitive environment,
Being familiar with the tools for monitoring the competition
Laurence Chérel Catherine Madrid
University Institute of Technology, Bordeaux -
The strategic advantages of having
competitors
 Market development
 Deterrent effect on the entry of new firms
 Expansion of the differential advantage by
offering the consumer a reference standard; in
this way certain competitors can strengthen the
company’s competitiveness, if the company is
seeking to distinguish itself in other areas
 (the advent of Free has allowed Orange to emphasise the differentiation in their
quality of service)
Laurence Chérel Catherine Madrid
University Institute of Technology, Bordeaux - Marketing
Techniques
Defining the competition means
taking into consideration
 All of the solutions offered to the
consumer to meet the same expectation
 But definitely not…all of the companies in the same
economic sector
 This approach is taken with a view to so-called
“intensified rivalry” regarding the focus need (as in
the definition of the market)
Laurence Chérel Catherine Madrid
University Institute of Technology, Bordeaux - Marketing
Techniques
For example
 On a student campus, the competitors for lunch in the local
university restaurant may be:
 The other moderately-priced local restaurants:
 AS WELL AS:
 Sandwiches or personally prepared food brought by students to
eat on campus
 Eating at home by students not living very far away
 A superstore near the campus offering sandwiches and precooked take-away meals
 = anything that provides lunch for the student
Laurence Chérel
Catherine Madrid
IUT Tech de Co
A methodological tool for analysing the
competition
 When looking towards intensified rivalry, it is necessary to
take into consideration all of the players with the potential to
meet the focus need,
 Michael Porter has consequently identified 5 forces:
Laurence Chérel Catherine Madrid
University Institute of Technology, Bordeaux - Marketing
Techniques
The forces that build competition, according to M. Porter
Threat of
new entrants
Supplier
position of strength
Rivalry between the
firms operating in
the sector.
Threat of
substitute products
Customer
position of strength
Analysing the competition means
 Determining whether or not each of these forces represents a
significant threat
 To do so, the factors influencing these forces must be taken
into consideration
Laurence Chérel Catherine Madrid
University Institute of Technology, Bordeaux - Marketing
Techniques
Existing rivalry in the sector
 What increases rivalry
 The number of competitors
 Low rate of market growth
 Little differentiation between
products, thus the importance of
price as a key factor for success
Laurence Chérel Catherine Madrid
University Institute of Technology, Bordeaux -
For example
In the motor fuel market
rivalry is high because of a
price war between the
distributors and little
product differentiation in
the opinion of consumers
Laurence Chérel Catherine Madrid
Tech de Co Bordeaux
A few question to consider in
analysing the strength of the force
 Who are the present players and how many of
them are there?
 What distinguishes them and their share of the
market?
 How have they changed within recent years?
Laurence Chérel Catherine Madrid
University Institute of Technology, Bordeaux - Marketing
Techniques
The threat of new entrants
 What increases the threat of
new entrants
 The attractiveness of the sector
 Easy access to distribution
channels
 Easy access to raw materials
 The lack of experience effect in
the sector
 A low degree rivalry in the
sector
Laurence Chérel Catherine Madrid
University Institute of Technology, Bordeaux - Marketing Techniques
For example:
 In the tablet market, which is now very attractive (up 60% in
value in the second quarter of 2013) the threat from new
entrants is high, especially the threat from products with
Windows 8 http://pro.clubic.com/actualite-e-business/actualite-576628-tablettes-idc-apple-ipadsamsung-surface.html http://www.zone-numerique.com/lipad-perd-du-terrain-avec-396-de-parts-demarche.html
 In the telephone service providers market, the advent of
new players is regulated by the regulatory authority for
electronic communications and phone systems) ARCEP;
the threat from new entrants is therefore low
Laurence Chérel Catherine Madrid
Tech de Co Bordeaux
A few questions to consider:
 Is substantial investment required for entry into the
market?
 Who are the potential new players in terms of direct
competition?
 Is it a long-standing establishment for a famous brand?
Laurence Chérel Catherine Madrid
University Institute of Technology, Bordeaux - Marketing
Techniques
The threat of substitute products
What is it?
 different technological
products that cater to the
same need
What increases the threat
from substitute products
 The improvement in the
performance/price ratio
 The speed of
technological changes
 The ease of use of the
substitute product (no
change in behaviour)
Laurence Chérel Catherine Madrid
University Institute of Technology, Bordeaux Marketing Techniques
For example…
 Mobile phones are substitute products with cameras;
they are a serious threat because using them does not
require any radical change in consumer behaviour
 Car-sharing can be a substitute solution to owning one’s
own vehicle; in this case there is less of a threat because
some consumers may be constrained by their
reservations
Laurence Chérel Catherine Madrid
Tech de Co Bordeaux
A few questions to consider:
 How is the technology evolving?
 What are the possible substitute products?
 What will be their differential advantages?
 Who will be the potential new players in terms of
products
Laurence Chérel Catherine Madrid
University Institute of Technology, Bordeaux - Marketing
Techniques
The power to negotiate with
customers
What increases
What is it?
 The ability of customers
to negotiate the selling
price and conditions
 The customers’ power of choice,
based on the number of companies
able to satisfy their needs
 The importance of customer
purchases to the company’s sales
 The part price plays in their
choice if there is little
differentiation between products
 The ease with which customers
can switch to other suppliers
Laurence Chérel Catherine Madrid
University Institute of Technology, Bordeaux Marketing Techniques
For example:
 It is sometimes difficult for customers to
change mobile phone operators; this reduces customers’
power to negotiate with these operators,
 In theory, consumers do not have the power to negotiate
price with MacDonald’s; that being said, it is the
customers who choose where they will eat, so the power
of negotiation is balanced in this case
 SMEs that sell to distribution chains are subject to fixed
conditions for the purchase of their products; customer
negotiating power (in this case, the distribution chains) is
very high in this case
Laurence Chérel, Catherine Madrid
University Institute of Technology, Bordeaux - Marketing Techniques
A few questions to consider:
 How many customers – actual and potential – are
there?
 What do they know about the market?
 Which players are offering equivalent or
substitute products?
Laurence Chérel Catherine Madrid
University Institute of Technology, Bordeaux - Marketing
Techniques
The power to negotiate with
suppliers
What increases
What is it?
 The ability of suppliers
to impose their
conditions on the
company in terms of cost
or the type of product
Laurence Chérel Catherine Madrid
University Institute of Technology, Bordeaux Marketing Techniques
 The scarcity of suppliers
 Low purchasing by the
company compared with
the supplier’s sales
turnover
 The part played by price
if there is little
differentiation between
products
 The company’s difficulty
in changing suppliers
For example …
 In the computer-building market, Windows
makes its pre-loaded software indispensable; for
computer manufacturers, the power to negotiate
with their supplier is very limited
 On contrast, in the dairy industry it is the
manufacturers who impose their buying price on
the milk producers http://monderural.blog.lemonde.fr/2010/08/13/combien-coute-vraiment-un-litre-de-lait/
Laurence Chérel
Catherine Madrid
University Institute of Technology, Bordeaux Marketing Techniques
A few questions to consider:
 How many suppliers are there in the market?
 Do they operate independently or in conjunction?
 Do you have a choice of suppliers?
Laurence Chérel Catherine Madrid
University Institute of Technology, Bordeaux - Marketing
Techniques
The type of competitive environment
 There are three types of competitive environments
 Identifying the type of competitive environment is useful for
a better understanding of the strategies to implement
Laurence Chérel Catherine Madrid
University Institute of Technology, Bordeaux - Marketing
Techniques
Fragmented sectors
 None of the firms has a large market share and
cannot significantly influence the sector, since
There are few obstacles to market entry
 There is no advantage of size when dealing with
customers or suppliers
 The needs of the market are diverse

Laurence Chérel Catherine Madrid
University Institute of Technology, Bordeaux - Marketing
Techniques
2 possible strategic responses
Specialisation
Expansion by absorbing
the competition
Laurence Chérel Catherine Madrid
University Institute of Technology, Bordeaux Marketing Techniques
Fragmented sectors and
competitive forces
 There are few obstacles to market entry,
 There are no market leaders,
 These are the factors that can add to the
threat of new entrants
Laurence Chérel
Catherine Madrid
University Institute of Technology, Bordeaux Marketing Techniques
Sectors coming to maturity
 A slow-down in growth,
 A replacement market rather than one originally setup
 Escalation in the fight for market share
Laurence Chérel Catherine Madrid
University Institute of Technology, Bordeaux - Marketing
Techniques
Possible strategic responses
 Combat marketing
 Increased differentiation in prices and
services
 The competition goes global
Laurence Chérel Catherine Madrid
University Institute of Technology, Bordeaux - Marketing
Techniques
A maturing sector and competitive
forces
 An escalation in the fight for market share
promotes intense rivalry between the companies
in the sector
 As a result the threat of new entrants is likely to
be low
Laurence Chérel
Catherine Madrid
University Institute of Technology, Bordeaux Marketing Techniques
Budding sectors:
 Two features:
 technological innovation,
 the development of new
consumer needs
 Three impacts:
 the absence of rules in the competitive arena,
 technological uncertainty
 difficulty analysing the markets
 first-time customers >>unfamiliar behaviour
 Difficulty evaluating the markets
Laurence Chérel Catherine Madrid
University Institute of Technology, Bordeaux - Marketing
Techniques
3 possible strategies
 Trend-maker
 The most high-risk, the
highest-performing
 Trend-tracker
 More cautious but a focal point of
differentiation must be found
 Trend-spotter
 Financially cautious but complex in
competitive terms
Laurence Chérel Catherine Madrid
University Institute of Technology, Bordeaux - Marketing
Techniques
Budding sectors and competitive
forces
 The growth rate in this type of sector will be
high; the threat of new entrants is likely to be
high and the rivalry between the current
companies in the sector quite low-key so long as
there is only one trend-maker, or even one trendtracker.
Laurence Chérel
Catherine Madrid
University Institute of Technology, Bordeaux Marketing Techniques