Marketing Essentials: Competition, Research, Strategy, and Mix
Block 5: Concept Lessons and Market
The market encompasses all activities related to the sale of a product, involving both buyers and sellers.
Market Rates
Perfect Competition: Characterized by product homogeneity, numerous suppliers and customers, full market knowledge, and freedom of entry and exit.
Imperfect Competition: Occurs when some characteristics of perfect competition are not met.
Types of Imperfect Competition
- Monopoly: A single company controls the sale of a unique product or service, dictating prices and conditions (e.g., Altadis).
- Oligopoly: Few sellers dominate the market with many buyers, selling similar products and engaging in strong competition (e.g., oil, motorsports).
- Monopolistic Competition: Numerous companies sell similar but differentiated products, fostering intense competition and product differentiation strategies (e.g., compact discs).
Market Research Techniques
Market research involves collecting, processing, and analyzing information about the environment, competition, and consumers.
Market Study Phases
- Defining the Research Objective: Clearly identify what needs to be known, such as consumer needs for new product development.
- Designing the Research Model: Determine the research methodology, utilizing sources like internal company information, statistics, and external investigations.
- Data Collection: Gather raw data (consumer surveys, observations) and secondary data (census information).
- Rating and Structuring Data: Statistically classify the collected data.
- Analysis and Interpretation of Data: Conduct environmental, competitive, and consumer analyses.
- Presentation of Data (Report): Summarize findings, including problem analysis, study objectives, methodology, technical results, analytical charts and tables, conclusions, and recommendations.
Techniques for Collecting Primary Data
- Surveys: Questionnaires administered through personal interviews, mail, or telephone.
- Observation: Study consumer behavior directly or through video recordings.
- Experimentation: Analyze consumer reactions to controlled stimuli, such as packaging or product taste.
Analysis of General Environment
- Legal Environment: Study regulations on product safety and laws.
- Technological Environment: Stay informed about technological advancements.
- Social Environment: Understand changes in income, fashion, and preferences.
- Economic Environment: Analyze the country’s economic prospects.
Competitive Analysis
Identify competitors, gather information on market share, suppliers, and advertising methods. Compare the company’s position relative to competitors to identify advantages and disadvantages.
Marketing-Mix Variables and Developing Strategies
The marketing mix comprises four controllable elements: product, price, distribution, and promotion.
Product
Anything that satisfies a consumer need. Companies aim to differentiate products through attributes and characteristics. Packaging and presentation are crucial for consumer appeal. Branding, including name and logo, distinguishes products from competitors.
Product Life Cycle
- Seed Stage: New product launch with low sales and high promotional costs.
- Growth Stage: Increased product awareness and strong sales growth.
- Maturity Stage: Sales stabilize, and advertising focuses on new consumers.
- Decline Stage: Sales decline, prompting decisions on relaunching, finding new uses, or discontinuation.
Price
The amount paid for a good or service. Pricing strategies include:
- Economic Theory-Based Pricing: Balancing supply and demand to maximize profits.
- Cost-Based Pricing: Adding a profit margin to the product cost.
- Competition-Based Pricing: Setting prices based on competitor strategies.
- Psychological Pricing: Creating the perception of lower prices.
Distribution
Ensuring product availability at the right time and place. Includes storage, physical distribution, and billing/collections.
Distribution Channels
- Direct Channel: Producer sells directly to the consumer.
- Indirect Channel: Intermediaries like wholesalers and retailers are involved.
- New Channels: Franchising, telemarketing, online sales, vending machines.
Promotion
Activities to increase sales and enhance company image.
- Advertising: Paid messages through mass media to inform and persuade consumers.
- Sales Promotion: Short-term incentives to boost sales.
- Personal Selling: Direct interaction with customers to inform and persuade.
- Public Relations: Activities to build and maintain a positive image.
- Merchandising: Tools to support product sales at the point of purchase.