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The document defines competition levels as concentric circles centered around a product or brand, with various perspectives including product form, generic competition, and budget competition. It emphasizes the importance of understanding customer needs and alternative solutions over direct product rivals, utilizing customer-based methods like behavioral data and surveys. Additionally, it outlines competitor selection across four levels and highlights the influence of firm resources on market strategies.

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19 views1 page

Individual Assignment

The document defines competition levels as concentric circles centered around a product or brand, with various perspectives including product form, generic competition, and budget competition. It emphasizes the importance of understanding customer needs and alternative solutions over direct product rivals, utilizing customer-based methods like behavioral data and surveys. Additionally, it outlines competitor selection across four levels and highlights the influence of firm resources on market strategies.

Uploaded by

iub.quynh24
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd

Individual Assignment: Bùi Phạm Diễm Quỳnh

Definition of Competition Levels: Competition can be visualized as concentric circles with the product
or brand at the center. The proximity of competitors is defined by their physical attributes, such as
features (e.g., carbonation, calories) and their respective values. Competitors may share features but differ
in the value of those features.
Inward vs. Outward Competitive Perspectives
• Product Form and Category Competition: These are inward-focused and defined by similar
products within the same category or form.
• Generic Competition: This takes an outward perspective, defined by customer preferences and
the alternative ways their needs can be met. Customers, not firms, ultimately determine what
constitutes competition by identifying products or services that solve their problems.
Budget Competition: This is the broadest level of competition, encompassing all products and services
competing for the same customer spending. For example, discretionary income can be allocated to diverse
purchases, such as vacations, jewelry, or investments. Although conceptually useful, budget competition
is challenging to apply strategically due to its expansive scope.
This approach to defining competition highlights the importance of understanding customer needs and
alternative solutions rather than focusing solely on direct product rivals.
Customer-Based Methods
1. Behavioral Data: Purchase data and cross-elasticities reveal competition based on brand loyalty,
switching, and price effects but may misinterpret complex customer preferences.
2. E-Commerce Insights: Clickstream data helps identify online competition but requires careful
interpretation due to low navigation costs.
Customer Judgments
1. Surveys and Mapping: Visualize competition in a multidimensional space, capturing similarities
across categories.
2. Consideration Sets: Analyze substitutes customers evaluate during decision-making.
3. Product Deletion: Observe substitution patterns when a product is unavailable.
4. Substitution in Use: Focus on products fulfilling similar purposes, identifying broad competitors.
Competitor Selection and Enterprise Competition
• Competition spans four levels: product form, category, generic, and need fulfillment. Strategies
vary by product stage and market maturity.
• At the enterprise level, competition depends on firm resources and capabilities, influencing
market strategies and competitive positioning.

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