MARKETING FUNDAMENTALSCOMPETITION

LEARNING GOALS

I will be able to explain how marketing (e.g., branding, promotion, packaging, online sales) affects competition among products;

I will be able to describe how evolving

information technologies are used to influence, inform, and motivate consumers (e.g., corporate websites, e-commerce, Internet pop-up ads).

WHAT IS COMPETITION?What companies/businesses compete for your dollar:

in fast food? in music? in clothing?

How does marketing affect competition among products?

Why is there competition?

WHAT IS COMPETITION?We live in a free-market society.

businesses can make a profit, keep some of the money they make

Profit drives business; the more successful a business is, the more profit the owner keeps.

Profits can be reinvested, used to grow business, pay off debt.

A free-market society allows individuals to hold private property--you may purchase things, keep them, sell them… you can use your property to create personal profit.

WHAT IS COMPETITION? Two or more businesses trying to sell the same

type of product or service to the same customer Market share

The percentage of the sales volume of a total market held by a specific company

E.g. If the cereal market is valued at $10 billion and General Mills is worth $2.5 billion, what is its market share?

COMPETITION: GOOD OR BAD????

Businesses – good or bad? Why?

Customers – good or bad? Why?

THE BENEFITS OF COMPETITION

Why do consumers want competition?Encourages new business creation More jobs and therefore salaries for people

Wide selection of goods and services for consumers (choices) Product type, style, price and quality

Forces businesses to produce better quality products and offer reasonable prices

DIRECT VS. INDIRECT COMPETITION Direct

When companies with products that are very similar are competing for the same market E.g. Coke and Pepsi, Nike and Adidas

Indirect When companies with products that are NOT

similar are in competition for consumer’s income E.g. What can you buy for $20.00?

INDIRECT COMPETITION DIRECT COMPETITION

EXAMPLE:

COMPETITIVE STRATEGIES

Allows the company to hold onto or increase its market share

Achieved by gaining a ‘competitive advantage’An advantage over competitors by offering

consumers greater valueHow can they do this?

~BRAINSTORMING SESSION~Groups of 3 or 4

COMPETITIVE ADVANTAGES

1. Promotion To create top-of-mind awareness Increase sales Gain consumer loyalty

E.g. Tim Hortons Roll Up the Rim to Win <Video>

2. Placement It must be where consumers want it, when

consumers want itE.g. Tim Hortons location…

COMPETITIVE ADVANTAGES

3. Branding Creating a name, symbol or design that identifies

and differentiates a product from other products

4. Quality Being the best of its type

Stronger, faster, easier, lighter, etc. Adding features to improve a product

<Video>

5. Price All features equal, price must be lower than

competitors to be a competitive advantage Hard to sustain because prices change all the

timeE.g. Ikea Winter Sale Promotion

6. Technology Using a better technology or offering a more

innovative product

E.g. Online Coupons

COMPETITIVE ADVANTAGES

7. Design Features The function and form of the product E.g. A car’s design makes it move from one

place to another (function) and defines its color and shape (form)

We often buy for the ‘look’ of the product when the functions are similar or the same

Packaging becomes important too

COMPETITIVE ADVANTAGES

CONCLUSION

Marketing does create a BIG IMPACT on Competition among Products…through branding, promotion, pricing, packaging, information technology, etc.

IN-CLASS

Choose a company and research how they increase their competitive advantage(s) by marketing its product(s) differently…through branding, promotion, pricing, packaging, information technology, etc.

EVOLVING INFORMATION TECHNOLOGIES AND THEIR INFLUENCE ON CONSUMERS

THE INTERNET 3 Major Types of Internet Marketing

Company Websites Banner Advertisements Emails

Each has its own characteristics: Most visitors to a Website are interested in the site in

the first place A company Website is like a retail outlet for

customers to visit Email marketing usually targets consumers who have

already given out their email addresses to the business (permission-based email).

ONLINE MARKETING – GOOD OR BAD?

Benefits?

Disadvantages?

THE INTERNET Can be inexpensive, convenient and time-saving A well designed site is significantly more effective (e.g. by

adding Flash, rich text, streaming media, or HTML) Adding these audio-video components can make these types

of marketing more expensive, yet making it about 50% more effective!

Problems: Spam and pop-ups make consumers angry! Despite its convenience, it has not fully replaced retail stores:1. Security concern for giving out credit card numbers at

purchase.2. Product arrival wait-time: At Minimum 24 Hours!3. Cannot feel, touch, and smell products before purchase.4. The companionship of shopping is missing!

SO, HOW DO YOU THINK EVOLVING INFORMATION TECHNOLOGIES ARE USED TO:

INFLUENCE CONSUMERS?

INFORM CONSUMERS?

MOTIVATE CONSUMERS?