Student Competition.pptx.pptx

Competition BMI3C Learning Goals + SC I am learning to: ■find direct and indirect competitors ■identify types of competitive advantages I will be successful when I can ■research real examples of types of competitors ■plan for a new product’s sustainable and non-sustainable advantages Day 1: The...

Competition BMI3C Learning Goals + SC I am learning to: ■find direct and indirect competitors ■identify types of competitive advantages I will be successful when I can ■research real examples of types of competitors ■plan for a new product’s sustainable and non-sustainable advantages Day 1: The Concepts Direct vs. Indirect Competition Direct Competition: Sells something that is a substitute. They must be in the same industry ■ Ex) McDonald’s direct competition is Burger King ■ Ex) 7-Eleven’s direct competition is Circle K Indirect Competition: Sells something that is a substitute (not the same direct industry) and can be bought instead. ■ Ex) McDonald’s indirect competition is Pizza Express ■ Ex) 7-Eleven’s indirect competition is a restaurant Competitive Advantages Sustainable Non-sustainable Think-pair-share Sustainable Non-sustainable ■What is the difference? ■Give an example. ■What does it mean in terms of advantages? Give a business example. Competitive Advantage DEFINITION - Is an advantage a business has over its competitors ■Can be either: ■Sustainable - an advantage you can maintain over your competitors in order to hold onto customers long-term. ■Non-sustainable - an advantage that your competitors can take away from you in order to shift sales in their direction 4 Types of SUSTAINABLE Comp. Adv.’s 1.Unique Selling Propositions (USP) 2.Lower Production Costs 3.Servicing a Niche Market 4.Creating Customer Loyalty LEARN OFF OF PG. 89-91 2 Minute Research and Share Do a quick internet search for the term that matches the first letter of your name. Be prepared to share your findings in 2 minutes! A-E: Unique Selling Propositions (USP) F-K: Lower Production Costs L-R: Servicing a Niche Market Sustainable Competitive Advantages ■Develop a unique selling proposition (USP) ■develop something (a benefit) that the competition does NOT have and likely will not develop or match ■Having a unique colour of product, or advertising more is NOT a USP. ■Having a patent, licensing agreement and being the only company a supplier will sell to ARE examples of Sustainable Competitive Advantages ■Lower production costs ■reduce costs ■use cost-efficient, high-technology manufacturing systems and processes to reduce the costs associated with its products ■(eg. move to another country with lower resource costs, fewer taxes, & a lower cost of living) Sustainable Competitive Advantages ■Service a niche market ■A niche market is a smaller market usually with a very specific customer base ■companies can recognize an opportunity to create a niche market & take advantage of it ■this allows companies to keep competition out of the market Sustainable Competitive Advantages ■Create customer loyalty ■the consumer develops a strong relationship with the product or the retailer ■one way to develop customer loyalty is to have a very strong customer service department ■this is called relationship marketing Activity ■For each type of sustainable competitive advantage, think of a company/product that has one. ■USP ■Lower production costs ■Niche market ■Customer loyalty 6 Types of NONSustainable Competitive Advantages 1.Promotion 2.Placement 3.Quality 4.Benefits of Use 5.Price 6.Design Feature LEARN FROM Pg. 91-97 JIGSAW # 2 Based upon your month of birth, research the NonSustainable Competitive advantage and be prepared to explain it to the class. 1.Promotion (January/February) 2.Placement (March/April) 3.Quality (May/June) 4.Benefits of Use (July/August) 5.Price (September/October) 6.Design Features (November/December) Non-sustainable Competitive Advantages ■Promotion ■consumers advertise their products to place their brands in the minds of the consumer (eg. Tim Hortons – “roll up the rim to win”) ■brand awareness - the major goal of the company is to aim for top-of-the-mind awareness ■means that the consumer is most likely to think about one brand of product or service before they think of any other Non-sustainable Competitive Advantages ■Placement ■to compete, a product must have a placement in the market, the more placement it has, the more competitive it is ■if a product has exclusive distribution in a market, it is very competitive (eg. only bottled water in a vending machine) ■a marketing goal for some companies is to eliminate the competition ■superstores move in and small retail stores go out of business (eg. Chapters) or large companies buy smaller companies and then discontinue their brands Non-sustainable Competitive Advantages ■Quality ■one way to compete against other products is to be the best of its type (eg. stronger, faster, lighter, easier to open, easier to close) ■companies are constantly adding features to improve the product and taking away features that are not beneficial ■the finest quality products are deemed to be top-of-the-line and are sought after by some consumers (eg. Cars: Mercedes; Lexus) Non-sustainable Competitive Advantages ■Benefits of use ■the value of a product is in what the product will do for the person who buys it ■marketers highlight the benefits that distinguish its’ product from the competition, hoping to appeal to the competition Non-sustainable Competitive Advantages ■Price ■price is only a competitive advantage if the product is less expensive than a competitor’s AND all features of the product are equal ■if the products are different, then price is not the main competitive advantage Non-sustainable Competitive Advantages ■Design features ■design influences the way a product looks and what it does ■design features and changes in design have to catch consumers’ interest to have a competitive edge (eg. cars, fashion industry) ■package design also competes for the consumer’s attention (eg. the shape of the bottle, the pattern of the label, the way it opens, the handle) ■packages can also be practical and attract attention that way (eg. squeeze bottle, jar Activity ■ For each type of non-sustainable competitive advantage, think of a company/product that has one and how they could possibly turn it into a sustainable advantage. ■ Promotion ■ Placement ■ Quality ■ Benefits of Use ■ Price ■ Design Features