Competition Strategies (BMI3C) PDF

Competition BMI3C explain how marketing (e.g., branding, promotion, packaging, online sales) affects competition among products;  Learning Goals + SC I am learning to: find direct and indirect competitors identify types of competitive advantages I will be...

Competition BMI3C explain how marketing (e.g., branding, promotion, packaging, online sales) affects competition among products;  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-world examples of types of competitors plan for a product’s sustainable and non-sustainable advantages Day 1: The Concepts Direct vs. Indirect Competition  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  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 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 APPLE! Console vs PC  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 NON- Sustainable Competitive Advantages 1.Promotion 2.Placement 3.Quality 4.Benefits of Use 5.Price 6.Design Feature  JIGSAW # 2 Based upon your month of birth, research the Non- Sustainable 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 Complete the worksheet: Direct/Indirect competition, For each business: identify a sustainable and unsustainable competitive advantage it has! Hints: Promotion Placement Quality Benefits of Use Price Design Features  Extension 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