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Lecture

The Competitive Market

2 Pages
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Department
Management (MGM)
Course Code
MGMA01H3
Professor
Mcmulkin

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The Competitive Market
Free Market- Canadians live in a free-market society. This is an economic system that permits
profit, competition, and private property.
Profit- the amount of money left over from the sale of goods or services after all expenses have
been paid; the reward that an owner receives for taking risks.
Competition- creates a desire to achieve our money
x Perfect competition: is a market characterized by a large number of small companies,
none of whom have an opportunity for market control.
x Monopolistic competition: is a market consisting of a large number of companies, each
having an opportunity for a degree of market control
x Oligopoly: is a market with a small number of large companies, each with a substantial
amount of market control.
x Monopoly: is a market in which a single company has complete market control.
Research and Development Department- a portion of the company that supports the creation of
new products.
Direct competition vs. indirect competition
Products that are very similar are in direct competition for consumer dollar.
Indirect competition is products or services that are not directly related to one another.
Sustainable competitive advantages- are methods by which a business holds on to its customers,
in spite of the competition.
1. Developing a USP (unique selling proposition) is the one thing a company has that the
competition does not ( e.g. first to enter the market, patent design, exclusive distribution)
2. Lowering production costs- using cost efficient systems to produce goods @ a lower
price.
3. Serving a niche market
4. Customer loyalty ± relationship marketing
Non-sustainable competitive advantages- are easy to copy, unoriginal
1. Promotion ± advertising
2. Placement ± location
3. Quality
4. Benefits of use
5. Price
6. Design features
Top-of-the-mind- means that the consumer is most likely to think about one brand of product or
service before he or she thinks of any other.
Value-added services- which are activities performed to support the sale of a product or other
service.
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Description
The Competitive Market Free Market- Canadians live in a free-market society. This is an economic system that permits profit, competition, and private property. Profit- the amount of money left over from the sale of goods or services after all expenses have been paid; the reward that an owner receives for taking risks. Competition- creates a desire to achieve our money N Perfect competition: is a market characterized by a large number of small companies, none of whom have an opportunity for market control. N Monopolistic competition: is a market consisting of a large number of companies, each having an opportunity for a degree of market control N Oligopoly: is a market with a small number of large companies, each with a substantial amount of market control. N Monopoly: is a market in which a single company has complete market control. Research and Development Department- a portion of the company that supports the creation of new products. Direct competition vs. indirect competition Products that are very similar are in direct competition for consumer dollar. Indirect competition
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