Competition and Product Strategy

Agenda

• Global competition

• Marketing and competitive success

• Environmental change

• Life cycles and evolution

• The nature of competition

• Product strategy – its nature and importance

Success in business is success in a market. Firms go out of business not by closing factories but by
unprofitable marketing. Firms usually enter a business by creating products (i.e. goods and services) but
stay in business only by creating and retaining customers at a profit’. [O’Shaughnessy]

The changing business environment

• Accelerating technological change

• Globalisation

• Mergers, acquisitions and strategic alliances

• Demographics

• Deregulation and privatisation

• Changes in business practices – downsizing,

outsourcing, re-engineering etc.

• Ethical and ecological concerns

Under modern conditions of competition it is becoming increasingly risky not to innovate. At the same
time it is extremely expensive and risky to innovate:

• Most product ideas which go into development never reach the market.

• Many of the products which reach the market fail.

• Successful products have shorter life cycles.

https://studylib.net/doc/9269087/competition-and-product-strategy
 Product in Theory and Practice

A product is the item offered for sale. A product can be a service or an item. It can be physical or
in virtual. A product needs a name: a name that people remember and relate to. A product with a name
becomes a brand. It helps it stand out from the clutter of products and names.

Product Classification

1. Durable products, Durable goods Nondurable goods Service

2. Consumer products, Convenience goods Shopping goods Specialty goods

3. Business products Materials and parts Capitals items Suppliers and business services

Branding

A successful Brand is a name, symbol, design or some combination which identifies the
“Product” of a particular organization as having a sustainable differential advantage.

The process involved in creating a unique name and image for a product in the consumers'
mind, mainly through advertising campaigns with a consistent theme. Branding aims to establish a
significant and differentiated presence in the market that attracts and retains loyal customers.

Objective of the Brand

- Delivers the message clearly

- Confirms your credibility

- Connects your target prospects emotionally

- Motivates the buyer

- Concretes User Loyalty

https://www.slideshare.net/ravichandegara/product-in-theory-and-practice1?from_action=save
 Examining Buyer’s Behaviour

Buying Behavior is the decision processes and acts of people involved in buying and using products.

Need to understand:

Why consumers make the purchases that they make? What factors influence consumer purchases?The
changing factors in our society.

Consumer Buying Behavior refers to the buying behavior of the ultimate consumer. A firm needs to
analyze buying behavior for: Buyers reactions to a firms marketing strategy has a great impact on the
firms success. The marketing concept stresses that a firm should create a Marketing Mix (MM) that
satisfies (gives utility to) customers, therefore need to analyze the what, where, when and how
consumers buy. Marketers can better predict how consumers will respond to marketing strategies.

Stages of the Consumer Buying Process

Six Stages to the Consumer Buying Decision Process (For complex decisions). Actual
purchasing is only one stage of the process. Not all decision processes lead to a purchase. All
consumer decisions do not always include all 6 stages, determined by the degree of
complexity...discussed next.

The 6 stages are:

1. Problem Recognition(awareness of need)--difference between the desired state and the

actual condition. Deficit in assortment of products. Hunger--Food. Hunger stimulates
your need to eat.
Can be stimulated by the marketer through product information--did not know you were
deficient? I.E., see a commercial for a new pair of shoes, stimulates your recognition that
you need a new pair of shoes.
2. Information search--
o Internal search, memory.
o External search if you need more information. Friends and relatives (word of
mouth). Marketer dominated sources; comparison shopping; public sources etc.

A successful information search leaves a buyer with possible alternatives, the evoked set.

Hungry, want to go out and eat, evoked set is

o chinese food
o indian food
o burger king
o klondike kates etc
 3. Evaluation of Alternatives--need to establish criteria for evaluation, features the buyer
wants or does not want. Rank/weight alternatives or resume search. May decide that you
want to eat something spicy, indian gets highest rank etc.
If not satisfied with your choice then return to the search phase. Can you think of another
restaurant? Look in the yellow pages etc. Information from different sources may be
treated differently. Marketers try to influence by "framing" alternatives.
4. Purchase decision--Choose buying alternative, includes product, package, store, method
of purchase etc.
5. Purchase--May differ from decision, time lapse between 4 & 5, product availability.
6. Post-Purchase Evaluation--outcome: Satisfaction or Dissatisfaction. Cognitive
Dissonance, have you made the right decision. This can be reduced by warranties, after
sales communication etc.
After eating an indian meal, may think that really you wanted a chinese meal instead.

https://www1.udel.edu/alex/chapt6.html

Product Life Cycle in Theory and Practice