Product Planning

Competitive set Category attractiveness 3Cs Analysis

Who defines competition Company or Customer??

Bases of Competition
I. Customer-oriented
Who they are competition for same budget When they use it Why they use it- benefits sought

II. Marketing-oriented: advertising and promotion

Theme/copy strategy Media Distribution Price

Bases of Competition cont.

III. Resource-oriented
Raw materials Employees Financial resources

IV. Geographic

Levels of Competition
Beers Ice cream

Tea

Regular colas

Diet lemon limes Diet-Rite cola

Wine Diet Pepsi Fast food

Fruit flavored colas

Diet Coke

Product form competition: Diet colas Juices

Bottled water

Lemon limes

Product category competition: Soft drinks

Video rentals

Baseball cards

Coffee

Generic competition: Beverages Budget competition: Food and entertainment

Levels of Competition: Implications for Product Strategy

Competitive Level Product Management Task
Convince Customers that the Brand is Better than Others Convince Customers that the Product Form is Best in the Category

Product Form Product Category

Generic

Convince Customers that the Product Category is the Best Way to Satisfy Needs Convince Customers that the Generic Benefits are the Most Appropriate Way to Spend their Money

Budget

Defining Competition with Perceptual Mapping

Moist Needs refrigeration

As a formal dessert Bakery cake Homemade cake Homemade pie Layer cake mix Takes a long time Cheese cake mix to prepare Bundt cake mix Frozen pie
Chocolate torte mix Boston crme pie mix Light Style cake mix Frozen cake Stirn Frost cake mix Individual pie Quick bread mix Date bar mix Brownie mix Homemade cookies Cookie mix Pillsbury cookie dough Hostess cupcakes

Pudding mix Local mix Jell-O Dzer ta

Custard mix Tapioca pudding mix

Canned pudding

Coffee cake mix

Snackin Cake mix

Bakery cookies
Good for a coffee break In my school work lunch

Oatmeal cookies Pepperidge Farm cookies

Between meal snack Easy to carry with me

Industry Analysis or Category Attractiveness Analysis

Aggregate Category Factors

Category size Category growth Stage in product life cycle Sales cyclicity Seasonality Profits

Attractiveness of Market Variables

Category Attractiveness over the Product Life Cycle

Sales

Stage of product life cycle

Introduction Small Low Low

Growth

Maturity Large Low Low/high

Decline Moderate Negative

Time

Category size
Category growth Category attractiveness

Moderate
High High

Low

Category Factors
Threat of new entrants Bargaining power of buyers Bargaining power of suppliers Current category rivalry Pressure from substitutes

Environmental Factors
Technological Political Economic Regulatory Social

Competitor Analysis

Competitor Analysis System

Secondary data Primary data

Key questions: Who are they? What are the competing product features? What do they want? What is their current strategy?

Differential competitor advantage analysis i.e. Who has the competitive product advantage?

What are they going to do?

Primary Sources of Competitor Information

Investment Bankers Sales Force

Consultants/ Specialized Firms

Primary Data Employees Suppliers

Customers

Secondary Sources of Competitor Information

Consultants Trade Press Customer Communi cations Internal Sources Local Newspapers Annual Reports Patent Filings

Internet
Promotional Literature Trade Associations

Secondary data

Business Press News Releases Electronic Databases Government

Value Chain
Firm Infrastructure Human Resource Management Technology Development Procurement Inbound Operations Outbound Logistics Logistics

Support Activities

Marketing and Sales

Service

Primary Activities

What now?
What will be competitors strategies? 1. continue as is 2. change due to
Changes in marketplace Changes in management Changes in financial goals

How to determine new direction?

Management judgment Simulation

What will be competitors reaction to our strategy?