Class Notes (810,969)
Canada (494,410)
Marketing (1,388)
MKT 100 (970)

Module 2.docx

7 Pages
Unlock Document

Ryerson University
MKT 100
Brynn Winegard

Module 2 Market Orientation Definitions Market Oriented: gathers good market intelligence, analyzes it, disseminates it, learns from it, and responds to the intelligence No competition: occurs when there is a single supplier Oligopolistic Competition: market dominated by a few large suppliers Monopolistic Competition: has many suppliers offering a variety of products, each of which has a small, loyal market share Perfect Competition: is when a many suppliers sell essentially the same product Competitive audit: reports on current success stories, mistakes, competitive advantages and disadvantages of a competitor Researching channels: analyze the channels and trading relationships Customer Focus: fitting technological product features and distribution technology to consumer preferences Satisficing decisions: avoids making big mistakes based on what they know. Cannot make optimal or optimizing decisions Key Terms 1 – ANALYZING COMPETITION Economics defines four different supply environments: 1. No Competition:  Ex. Regional electrical utility that has control over price, quality and quantity supplied  Monopoly is government regulated and regulators often undertake financial audits and customer satisfaction surveys to check on whether the monopoly is making excessive profits & satisfying customers  Trends can be used by a potential new entry to argue against the continuation of the monopoly  Competition gives consumers choice  encourages innovation and price competition 2. Oligopolistic Competition:  Ex. Detergent or aircraft industry  Industries that require very large investments in equipment, technology, and distribution  requirement encourages mergers & acquisitions  Few suppliers compete on price, product features, advertising and sales promotion  Lord Keynes  “animal spirits” in the market: the drive to constantly improve in ways that satisfy customers and reduce costs 3. Monopolistic Competition  Ex. Salad dressings or barbeque sauces, local beauty salons and bars 1  Exists a lot of production and service differentiation between rivals & price competition 4. Perfect Competition  Supply and demand will control price o Advertising and sales promotion have little influence  Low cost production of a quality product and efficient distribution determine success in such a market WHO ARE OUR MAJOR COMPETITORS? WHO HAS WHAT SHARE OF SALES IN A GIVEN MARKET? Market Share  Must be defined before determining major competitors  The way you define a market is specified  Can change dramatically depending on whether the market is defined as: global, particular export region (EU), U.S. Market %TOTAL INDUSTRY SALES TIME PERIOD Most Immediate Competition  Rival’s products o Similar specific design features o Targeted @ same consumers  General competition comes from products that satisfy a core benefit Research into Competition  Historical problem: Too much focus on measuring the number of current competitors, concentration of market share (combined market share of the largest 4 competitors), and the current balance sheet of major competitors  Emphasis needs to be on the commercializing and diffusing of new innovation into the market Competitor Research Efforts  Establishes competitor or new start up company is using radical new products or process technology  Increases customer satisfaction  Decreases costs  Requires defining market share down to the last share point because defining the exact bounds of the market is rarely precise 2 Evolution of technology  Small start up companies or large companies in different market revolutionize a market’  You needs to have a 360 degree long distance vision in a market to see the threat on the horizon Leading indicators of a likely change in future sales, profits & competitiveness: 1. Changing brand-mind-share:  The changing share (%) of customers who name the brand when asked to name the first brand that comes to mind when they think about buying a product  Change in brand mind-share and customer preferences often foreshadows a change in market sales share o Ex. Kleenex 2. Changing brand voice-share  Changing share of advertising dollars the brand has of the total dollars spent on advertising in the market 3. Changing research and Development (R&D) share:  Long term indicator of new product innovation and thus market share  Important measure: o Of future competitiveness in many high technology markets  When one competitor greatly increases its R&D spending and another company greatly reduces its R&D spending Porter’s Five-Force Model 1. Current Competitors a. Who else is playing in the market? Are the strong? Weak? Monopoly? 2. Threat of new Entrants a. AKA Barriers to Entry b. Is it relatively difficult or easy to enter the market? (Easy is bad for business!) 3. Threat of new substitutes a. AKA Substitutes b. Do substitute goods exist? Are they available? (Subs are bad for business!) 4. Bargaining power of distributors a. AKA Buyer Power (B2B) b. How much power does the buyer have over quality, price, supply? 5. Bargaining power of suppliers a. AKA Supplier Power b. How much power does the supplier have over quality, price, supply?  Proposes that competition comes not just from existing competitors but from the threat of new entrants and substitute products or services 3  In marketing, suppliers & buyers are viewed positively and reduce Porter’s model down to three forces 3 Force Model: 1. Suppliers & Buyers a. Form part of the vertical – partners in B2B b. 2 forces are eliminated 2. Barriers to Entry 3. Current Competition 4. Substitutes  Suppliers and distributors are generally treated not as rivals, but as business partners in an added-value chain and with whom you form an alliance to gain collective and individual competitive advantage  Resulting trading partnership viewed as a business entity whose competitiveness should be a
More Less

Related notes for MKT 100

Log In


Don't have an account?

Join OneClass

Access over 10 million pages of study
documents for 1.3 million courses.

Sign up

Join to view


By registering, I agree to the Terms and Privacy Policies
Already have an account?
Just a few more details

So we can recommend you notes for your school.

Reset Password

Please enter below the email address you registered with and we will send you a link to reset your password.

Add your courses

Get notes from the top students in your class.