MARKETING MANAGEMENT(Subject Code: MBADS1-126) → LESSON 2:TOPIC: Competitor Analysis Unless you’re selling Jupiter sand, chances are that you’re going to face some competition in the market. But contrary to what many people think, competition is actually good for business. Having business competition usually means there’s demand in the market, and the offering is worth selling. Moreover, it motivates you to innovate, differentiate and develop your best offering to stand out in the market and increase your market share. So, no matter if you’re new to the market or an existing player, competitive analysis is something that should be in your to-do list as your competitors are out there practising it finding opportunities to take the lead. What Exactly Is A Startup? What Is Competitor Analysis? Competitor analysis is a process of identifying the competitors and analysing their business strategies to determine their strengths and weaknesses relative to your business or offering. In simple words, competitor analysis (also called competitive analysis) is a process to –  Identify who the competitors are: These include both current and potential competitors.  Analyse their business strategies: Business strategies include both long term and short term corporate and competitive strategies.  Identify opportunities and threats: The motive of competitor analysis is to analyse the competitors’ strength and weaknesses, compare it with your own strategies, and identify the opportunities and threats. Importance Of Competitive Analysis Besides the rationale that the competitive analysis process helps you determine the strengths and weaknesses of the competitors to discover short term and long-term opportunities and threats, conducting a competitive analysis is essential because it helps you:  Build an understanding of how the existing market operates and how potential customers rate the competition.  Get a good idea of what exactly does the customers require and how you can sell it to them.  Develop strategies for how to grow in the current market and expand into new markets.  Develop differentiated offerings which stand out of the crowd with their competitive advantages. Purpose Of Competitive Analysis Usually, there isn’t just one reason to conduct a competitive analysis. Competitive analysis in marketing is done to – Understand Market Conditions Better It’s rare when a company competes against just one competitor. Competitor analysis helps you identify all the current and potential direct and indirect competitors, which could hinder your entry or growth within the market. Find Untapped Opportunities And Upcoming Threats Competitive analysis is the analysis and evaluation of the strengths and weaknesses of the market players. This analysis often results in finding untapped opportunities that can be capitalized on for a short term or long term gain. These opportunities could be the weakness within the –  Product development cycle of the competitor(s)  Marketing and sales process of the competitor(s) This analysis also results in identifying an upcoming threat in the form of a new competitor or changing market trends. Come Up With Better Strategies When you know how the market currently works and what’s in the box, it’s easier to think out of the box and come up with more effective and efficient (corporate and competitive) strategies that will provide the business with a distinct advantage. Help Develop Competitive Barriers A careful analysis of competitors is instrumental in developing barriers which are hard to break. Timely competitor analysis also helps in developing barriers to prevent the entry of new competitors in the market. How To Do A Competitive Analysis? Although conducting a competitive analysis is no rocket science, it requires a lot of efforts and can often be tedious. But fret not. Here’s a simple, easy-to-use competitive analysis process that you can use to identify the competitors and perform a competitor analysis to help you keep a check on other players in your market space. Determine Your Goal Competitive analysis is an exercise backed by a goal in mind. You need a reason to analyse your competitors and evaluate their efforts. The reasons include but are not limited to –  Identifying and analysing the current market players (and their marketing efforts) to develop better new product development and marketing strategies.  Keeping a check on existing competitors’ marketing efforts to develop better strategies to attract more customers.  Analysing competitors before entering into new markets.  Finding indirect competitors which can become direct competitors in future.  Identifying the strengths and weaknesses of the competitors in relation to your business. This reason forms the spine of the competitive analysis process on which the next steps depend. Identify The Competitors Once the ‘Why’ of the competitor analysis is answered, the process moves on to determining ‘who’ your competitors are. It is critical to figure out the right competitors and segregate them to compare the data correctly. Otherwise, a lot of time will be wasted with no proper insight. Remember, almost every category niche includes over a dozen players. You can easily find them by tracking your buyer’s journey or by doing some research online. But, competitor analysis isn’t about analysing them all. It’s about finding the ideal competitors which represent the biggest threat to your business. The best way to identify this is by following the WWH approach. Who is the customer? What is the problem? How is the problem solved? All you need to do is to answer these questions for all the players you think and categorize them into three types according to the answers.  Direct Competitors: Competitors which cater to the same customers, address the same problem, and provide the same solution as you. For example, Uber and Lyft are complementary when we talk about on-demand cab aggregators.  Secondary Competitors: Competitors which cater to different customer segments but address the same problem and provide the same solution as you. For example, Gucci and Gap, even though address the same problem of clothing, cater to different customer segments.  Indirect Competitors: Competitors which cater to the same customer segment and address the same problem but provide a different solution. For example, Domino’s and McDonald’s, even though address to the same problem of the same target audience, offer different solutions. Once done, select the competitor type to be analysed according to the set goals. Identify The Parameters & Develop A Competitive Analysis Framework The next step involves you to decide the ‘What’ and ‘How’ of the competitive analysis – what needs to be analyzed, and what framework would you use to analyze it? Based on your goal, you can either use an existing competitive analysis framework or develop your own framework based on certain parameters. Some of the existing competitive analysis frameworks are –  SWOT analysis: To help identify potential competitive advantage by analyzing strengths, weaknesses, opportunities, and threats of the competitors.  Porter’s five forces: To help analyze the competitive structure of the industry by analyzing five factors – new entrants, buyers, suppliers, substitutes, and competitive rivalry.  Strategic Group Analysis: To assess players’ positions in the competitive environment based on two variables.  Growth-Share Matrix: To classify products in your company’s portfolio against the competitive landscape of the industry to determine the products worthy of investment and the ones not worthy.  Perceptual Mapping: To visually represent the perception of your products relative to competitive alternatives. There are way more than just these five frameworks. Most of such frameworks use predefined parameters and many let you choose your parameters. These parameters can be both qualitative or quantitative that stems from the actual goal of the competitor analysis. Qualitative parameters include but are not limited to –  Advertisement and marketing strategies used,  Sales Strategies,  USP,  Value proposition,  Store design,  Website design,  Customer reviews,  Product quality,  Customer location,  Social media presence  Type of ads on social media,  Customer response on social media posts, etc. Quantitative parameters include but are not limited to –  Pricing,  Cost structure,  Number of reviews,  Funding received,  Profit margin,  Store distance from a specific place,  Company size,  Discount offered on products,  Channels of distribution used,  Keywords targeted on search engines,  The number of ads running on social media,  Customer income, etc. In general, when an apt competitive analysis framework isn’t found, these data parameters are grouped together and a standard competitive analysis framework is developed to collect, sort, present, and analyse data. Collect Data And Analyze Once the framework is decided, the next step involves collecting data. If you happen to conduct research online, you can make use of some of these competitor analysis tools –  Ahrefs: To get their search engine related data.  Sprout Social: To analyze competitors’ performance on social media.  SimilarWeb: To get an overview of the website traffic, referrals, search traffic and keywords, social media, display advertising, audience, and similar sites and apps.  Prisync: To track competitor prices and available stock in its ecommerce store.  Crunch base: To get company insights like the number of employees, funding, etc. Here’s a list of survey tools if your research happens to involve surveys. Once the data is collected, it is then sorted and entered into the competitive analysis framework to be analyzed. Competitor Analysis Example To make the competitive analysis process even more clear, take this hypothetical example – Mr Adam owns a specialized toy shop (selling wooden puzzle) in a famous market. He notices that while his customers are reducing, his competitors aren’t making losses because they also have an online presence and sell their products online. Now, before making any spontaneous decision, Mr Adam decides to conduct a competitive analysis to strategise the best plan to come at par with his competitors. Goal To find the companies selling wooden puzzles online and analysing what all channels do they use. Identifying Competitors Even though Mr. Adam already has an idea of his competitors, he conducts more research online to find other competitors over the web. He makes use of Google queries like “Wooden Puzzle Buy Online” to find the sellers selling the same and similar products to him. Once identified, he categorizes them under direct, secondary, and indirect competitors. Now, since he has to only find out the channels they use, he chooses both direct and secondary competitors to be a part of his research. Developing A Competitor Analysis Framework He develops a simple excel sheet mentioning the competitors’ name and the channels they use. Data Collection & Analysis He individually checks every competitor’s presence online and fills his competitor analysis template. Once done, he determines the most sought after channels and develops new strategies for the same. Bottom-Line? Competitor analysis is an essential practice for new and existing players alike. A periodic competitor analysis helps the company keep a tab on its competitors, identify opportunities, and become ready for upcoming threats.

LESSON 1: What is Market Segmentation? Market segmentation is the process of dividing a total market into market groups consisting of people who have relatively similar product needs, tastes, and preferences. The purpose is to design a marketing mix strategy that more precisely matches the needs of individuals in a selected market segment(s). Market segmentation is the technique used to enable a business to better target its products at the right customers. It is about identifying the specific needs and wants of customer groups and then using those insights into providing products and services which meet customer needs. Market Segmentation Definition Market Segmentation is the sub-dividing of a market into homogeneous subsets of customers, where any subset may conceivably be selected on a market target to be reached with a distinct marketing mix Philip Kotle Market Segmentation consists of taking the total heterogeneous market for a product and dividing into several sub-markets or segments, each of which tends to be homogeneous in all significant aspects. William J. Stanton 1. Designing Products that are More Responsive to Market Needs: The company puts the customer in the first place, and adjusts products to satisfy them and achieve customer satisfaction at a profit. 2. Analyze Market: Segmentation market is helping executives to detect anyone who attacked its product market. 3. Assess Opportunities: After analyzing the market, companies that master the concept of segmentation will be on the lookout for the idea to find opportunities. This opportunity is not always something that big, but in its time would be great. 4. Mastering the Position of Superior and Competitive: A company that controls segments well is generally well aware of their customers. Companies understand the shifts that occurred in the segment. 5. Determining Effective Communication Strategies: After learning about the targeted segment, the company will determine how to communicate effectively with the targeted segments. ________________________________________ Types of Market Segmentation There are 4 different types of market segmentation and those are discussed below: 1. Geographic Segmentation 2. Demographic Segmentation 3. Psychographic Segmentation 4. Behavioural Segmentation Types of Market Segmentation 1. Geographic Segmentation Geographic segmentation divides the market into geographical units such as nations, states, regions, counties, cities.Theorganisation can choose to operate in one or more area and pay special attention to local variation. In that way, it can tailor marketing programs to the needs and wants of the local customer. The geographic segmentation is furthermore useful when there are differences in a location where a product is marketed. The differences can be caused by cultural factors, traditions, politics etc. 2.Demographic Segmentation In demographic segmentation, the market is divided on variables such as age, family size, family life cycle, gender, income, occupation, education, religion, race, generation, nationality, and social class. One reason demographic variables are so popular with marketers is that they’re often associated with consumer needs and wants. Variables are easy to identify and measure. 3.Psychographic Segmentation In psychographic segmentation, buyers are divided into different groups on the basis of psychological/personality traits, lifestyle, or values. People within the same demographic group can exhibit very different psychographic profiles. Psychological profiles are often used as a supplement to geographic and demographics when these do not provide a sufficient view of customer behaviour. 4.Behavioural Segmentation In behavioural segmentation, marketers divide buyers into groups on the basis of their knowledge of, attitude toward, use of, or response to a product. It considers variables like brand loyalty and the usage rate of the consumer.What is an EntrepreneurshipBases of Market Segmentation Bases of market segmentation are the factors that are used to divide the market into a small homogeneous market. 1. Geographic Segmentation: It includes the following variables: A. Region: Continent, Country, State B. Size of metropolitan area: Segmented according to population size C. Population Density D. Climate 2. Demographic Segmentation: It includes the following variables: A. Age B. Gender C. Family Size D. Family Life Cycle E. Income F. Occupation G. Education H. Generation I. Ethnicity J. Nationality K. Religion L. Social Class 3. Psychographic Segmentation: It includes the following variables: A. Interests B. Activities C. Opinions D. Values E. Attitudes 4. Behavioural Segmentation: Behavioural Segmentation is based on actual customer behaviour towards products. Some behavioural variables include: A. Benefits Sought B. Usage Rate C. Brand Loyalty D. User Status E. Readiness to buy F. Occasions ________________________________________ Market Segmentation Process Market segmentation itself is a process of grouping and sub-grouping a large heterogeneous market of the audience into similar qualities and attributes. This helps the companies concentrate on a specified group of customers they want to target which will help them gain a competitive advantage over their competitors in the market and ultimately help them gain profit. Using market segmentation the marketers can easily customize their marketing strategies. It narrows the risk of ineffective marketing strategies and chooses the right type of market segment that would suit their marketing strategies. Importance of Market Segmentation One of the most importance of market segmentation is that it allows an organization to precisely reach a consumer with specific needs and wants. Other importance of market segmentation is discussed below: 1. Adjustment of product and marketing appeals Market segmentation presents an opportunity to understand the nature of the market. The seller can adjust his thrust to attract the maximum number of customers by various publicity media and appeals. 2. Better position to spot marketing opportunities The producer can make a fair estimate of the volume of his sale and the possibilities of furthering his sales. In the regions where response of the customers is poor, the strategy of approach can be readjusted accordingly to push the sale. 3. Allocation of marketing budget It is based on market segmentation that marketing budget is adjusted for a particular region or locality. In the place where the sales are limited, it is no use allocating a huge budget. 4. Effective competition with rivals It helps the producer compete with his rivals effectively. The producer can adopt different strategies for different markets taking into account the rivals strategies. 5.Effective marketing programme It also helps the producer to adopt an effective marketing programme and serve the consumer better at comparatively low cost. Different marketing programmes can be used for different segments. 6.Evaluation of marketing activities Market segmentation helps the manufacturer to find out and compare the marketing potentialities of the products. It helps to adjust production and using resources in the most profitable manner. As soon as the product becomes obsolete, the product line could be diversified or discontinued. ________________________________________ Examples of market segmentation Example of geographic segmentation McDonald is an example of geographic segmentation. It customizes its menu that varies from country to country. McDonald’s has introduced burgers with no beef or no pork in it for India. And likewise in Mexico, more chilli sauce is used. KFC in India concentrates on veg products in south India and on chicken products in North India. Example of demographic segmentation Ferrero SpA an Italian manufacturer of branded chocolate is an example of demographic segmentation. Its sub-brand kinder manufacture chocolate specially for children and has also separate colours and toys for girls and boys. Example of psychographic segmentation Rolls Royce is an example of psychographic segmentation, it targets the consumer having the potential of buying luxury cars and having a rich lifestyle. It concentrates on the variable of the lifestyle of the consumer. Example of behavioural segmentation Airlines, hotel and such industry are the example of behavioural segmentation. Emirates airlines are the best example for it, it offers excellent services to the passengers which helps them retain the customer. It creates brand loyalty and make the customer loyal to their airlines and fly with them frequently.4Ps of Marketing Mix ________________________________________ What is the Target Market? Target market is a group of audience within which the company is planning to sell its products. It is a process after market segmentation is done, a marketer has to select one or more segments in which a marketer has to implement his marketing strategies. The target market consists of consumers who have similar characteristics who are more likely to buy the products which will be more profitable for the company. After the selection of one or more market segments, the marketer has to implement its marketing strategies. It has to modify the marketing mix (4Ps) as per the needs to reach to the customer. After a target market is selected marketer needs to position its product to the selected segment of the customers. ________________________________________ ________________________________________ •

LESSON 3: DIFFERENTIATION AND POSITIONING Differentiation vs positioning The previous article (i.e., market segmentation vs. target marketing), explains how companies segment market and how they target one or more segments to sell their output. After segmentation and targeting, the next step that comes in place is the differentiation and positioning through which companies decide how they would be serving their customers falling in their selected or targeted segment(s). Companies first go for differentiating their products from other available products and then strive to achieve a distinct position in the minds of consumers as well as in the market through positioning. The article differentiation vs positioning elucidates the meanings of and the differences between the two terms – differentiation and positioning. Definitions and meanings Differentiation Differentiation refers to the marketing strategy that a company adopts to make its product or service distinct from all other products or services available in the market. Through differentiation, the products stand out from all other competing products, such that they offer unique value and become attractive to the customers. When perceived and valued by customers, product differentiation can bring brand loyalty and competitive advantage for companies by making their product or service superior to others in the eyes of customers. The objective of differentiation is not just to make the product stand out of competitors’ products but to stand above them. Differentiation can be achieved through adding or modifying one or more of numerous attributes like price, quality, performance, design, features, order processing, availability, timing, location, distribution and after sale services and support. Differentiation does not require companies to start a product from scratch. A company can ad some important or appealing feature to its one or more of its existing products or services at any stage. For example, customer support is extremely important for a webhosting business. A web hosting company like Bluehost may focus on providing supports to its customers better than ever. A cosmetic company may add to its website a tool for finding the most appropriate foundation shades. A food restaurant may launch an android/iOS app and a website to receive online orders and start a home delivery service in particular area. Differentiation must be thought and carried out from buyers’ perspective and not from company’s own perspective, which means the buyer must be able to realize and understand the value added to the product through differentiation. Merely a change made to a product or service that don’t create a sense of value among consumers can’t be regarded as differentiation. For successful and result oriented differentiating, companies must consider the following important points:  The differentiation should result in added value. It requires a detailed market research and outlining the existing market gaps in terms of unfulfilled needs, issues and challenges faced by the customers in targeted market and comprehending how the effective solutions can be offered.  The customer should be able to perceive the value added through differentiation. If the customers are unable to understand the value, it means either the differentiation actually has not added any value to the product or the company has failed to communicate the same to customer.  The differentiation should be such that the competitors are not able to easily copy it, i.e., the added value should be exclusive to the organization for a long time.  The value introduced through differentiation should be affordable which means the customers are agree and are financially able to pay for the additional features or attributes added to the products. Positioning Product positioning is the outcome of many previous marketing efforts and activities like market segmentation, target marketing and product differentiation. If a company has successfully performed in these steps, it would certainly position itself successfully. Product positioning (or just positioning, for short) refers to the place occupied by a product in the minds of the customers in relation to other competing products in the targeted market or segment. It basically signifies how the company would like the product to be considered by its customers. It includes feelings, perceptions and impressions that actual as well as potential customers should have about the products being offered by the company. Positioning should make the customers think that the product or service is capable of providing greater value than any other. To achieve this, companies or marketers need to determine why customers should buy their products rather than an alternative or another similar product offered by someone else. To develop a distinct identity of the product in the minds of the customers targeted segment, the marketers highlight relevant and appealing aspects while striving for product promotion. These include product category, product attributes, pricing strategies, unique selling propositions, brand image, quality of both product and after sale service etc. A company’s overall marketing efforts need to be consistent with its positioning strategy. The marketers should be capable of communicating and delivering product value that is unique from that offered by their competitors. Difference between differentiation and positioning The four points of difference between differentiation and positioning are given below: 1. Meaning  Differentiation is the strategy by which one or more important, unique and appealing differences, in terms of design or actual usage, are added to the product to make it stand out of same like products.  Positioning is the strategy that companies use to create a specific position for the product in the minds of consumers, both actual an potential 2. Objective  The objective of differentiation is to attract customers and compel them to choose your product over another in the market on the basis of additional or unique features that it offers.  Positioning, on the other hand, has the objective of obtaining a specific place in the minds of consumers. It aims to define the way people think about your products and is achieved through making the people realize that the offered product has some rich and unique capabilities in terms of design, look or actual usage. 3. Specific to  Differentiation is more product-specific in that it pertains to the product or service being sold.  Positioning is specific to the audience in that it seeks to influence the perception of customers regarding a given product or service. It is more pertinent to the customers that are being targeted by the marketers. 4. Based on  Differentiation can be based on product features, performance, attributes, quality, benefits offered or uniqueness.  Positioning is based on promotional aspects of the product and is carried out by advertising products as being better than other similar products available in the market. Differentiation vs positioning – tabular comparison A comparison of differentiation and positioning in tabular form is presented below: DIFFERENTIATION VS POSITIONING Meanings Strategy used to identify the features of the products that are distinct from other competing products in the market Strategy used to create a specific image of the product in the minds of the consumers Objective Attract customers to choose your products over other competing products Determine how people think about your products and engage with it Specific to Specific to the product or service Specific to the customers and to influence their perceptions Based on Features, quality, benefits or uniqueness of the product Promotional aspects of the product Conclusion – differentiation vs positioning Differentiation and positioning are two consecutive and highly related elements that occupy a prime importance in a company’s marketing strategy. Despite the differences between them, they both have the same objective and are closely related to each other because product or service is positioned on the basis of its distinct features or qualities. Differentiation is considered effective only when it creates enough position for the product offered for sale within the target market. The concept of differentiation and positioning is applicable to all industries but is of special importance in a market with heavy competition. The purpose is to make the customers aware and realize what we can deliver that others can’t and how and why the unique capability of our product has value for them. To know whether the product is differentiated and well positioned, keep an eye on sales numbers and customers’ engagement with your product. Finally, if the numbers are not satisfactory, doing a little bit more research and changing or adding one or more new features might work.

Useful Links

SBS Latest News

Recent Posts

Connect us

Leave A Reply Cancel reply

Login with your site account

Register a new account

Modal title