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MKT100 - CH 2.docx

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Department
Marketing
Course
MKT 100
Professor
Anthony Francescucci
Semester
Fall

Description
MKT100 – MOD2 4 different supply environments: 1. No competition / Monopoly  A single supplier who has control over price, quality and supply  Often government regulated  Countries often shift away from monopoly towards oligopolistic  Ex. LCBO, Toronto hydro electric system 2. Oligopolistic competition  A market dominated by a few suppliers that requires a large investments in equipments or technology  Suppliers compete on price, product features and sales promotion  Animal spirits: the drive that constantly improve ways to satisfy customer and reduce price  Ex. Apple, Microsoft, Esso 3. Monopolistic competition  Many suppliers with a variety of product, each of which has a small, loyal market share. Ex. Of products: local beauty salon, salad dressing, bbq sauce  Ex. Jackaster’s, pickle barrel 4. Perfection competition  When many suppliers sell essentially the same product  The suppliers will have control of the supply and demand of the price, advertising and sales promotion with little influence.  Ex. Ontario corn producer, grape producer. - Market share is measure by the company’s percentage of total industry sales over a specified of time. o Market share = Company sales in $s divided by total industry $ sales over specified time period x 100%. - Determining major competitors  define the market; define a market is normally specified of the company’s resources and company growth objectives. - Market share can change dramatically depending how defined the company is globally. - Closest competitors are the ones that share similar features - Newspaper industry is going downhill from the creation of e-newspapers - Problems of the competition is we pay attention to number of current competitors, the concentration of the market share, and current balance sheet of the major competitors - Emphasis should be on the commercialization and diffusing of new innovation into the market. - Research efforts better spent finding out which established competitor or new start-up company is using radical new products or new technology to increase customer’s satisfaction and reduce cost. o EX. Motorola and Nokia spent too much time on comparing and publicizing their market share and did not pay enough attention how blackberry made it more convenient to send emails and read business files through their innovative software; by the time they recognized what is a smartphone, RIM owned the market. Levels of competition - Focus on a profitable business development opportunity using a new technology that delivers more in benefits than the current technology. - Need to have a crucial indicator of the environment of the competitor. - The key to competitive research is to focus on and understand: Competitor added-value processes. - Marketing views suppliers and buyers: Mostly as partners, sometimes as competition. Likely to change in the future profits, sales, and competitiveness: Changing brand mind-share  % of customers of what brand comes to mind when asked a particular product  Often foreshadows of change in the market sales share Changing brand voice-share  % spend on media in total industry spend; Total dollars spend of advertising in the market.  Likely to lead a change in mind-share, but if the message is weak, it may not happen.  **Brand mind-share is much more important than brand voice-share Changing research and development (R&D) share  % spend on R&D in total industry spend  Important measure when one competitor greatly increases their R&D spending and another greatly reduces its R&D spending.  A lot depends of creativity of the researchers and supervised managers involved rather than the dollars spent. Five forces that shape the competition (Porter model) 1. Current competitors 2. The threat of new entrants 3. The threat of new substitutes 4. The bargaining power of distributors 5. The bargaining power of suppliers Auditing current competitors Supply processes Manufacturing operation processes Marketing and Sales processes Service processes Analyzing channels  Best to research channels by analyze channels and trading relationship  New technology is the biggest change in the channel of distribution 3 stages of an individual distributor audit 1. Performance metric analysis 2. Fit analysis 3. Added-value chain analysis Understand the reasons for a channel member’s change in performance and behaviour by tracing back through the distributor’s added-value chain presented:  Purchasing processes  inbounded operations bounded  merchandising and operation processes  marketing and sales processes  Delivery and service processes - It`s all about processes and the quality of the process thinking of the channel and supply partners. -To understand where the distributor or trader weak or strong along its added-value chain. Market scanning and analysis Customer Focus Model  details how to study consumer and learn how technological, economic and social trends are impacting the consumer. - Technology had given us access to communicate around the world - North America is the biggest economy in the world, but it`s growth and evolution is driven by outside economic; very rapid growth in the Asian consumer markets. 2 fundamental Supply-demand supply feedback m
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