Strategic Marketing in business studies.pptx

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1. Chapter 2 Markets and Competitive Space

2. Markets and Strategies Understanding Market Dynamics Knowledge about markets guides business and marketing strategies. Markets impact strategy—requiring businesses to think beyond conventional competition. Defining markets based on buyers' needs and product benefits is crucial. Market Changes and Strategy Adaptation Market shifts necessitate strategy changes (e.g., Kodak’s failure to adapt). Companies must proactively adjust to emerging opportunities and threats. Example: PepsiCo adapts to changing consumer preferences: Acquired SoBe Beverages to enter the herbal beverage market. Expanded SoBe into energy drinks for targeted demographics.

3. Thinking Outside The Box Breaking the Conventional Boundaries: Traditional market perspectives focus on technology, geography, competitors, and customer base. However, opportunities and threats exist outside conventional boundaries. New markets, competition types, and business models can disrupt industries. Example: The Rise of AI in Content Creation Traditional content creation relied on human writers, graphic designers, and video editors. Disruptors outside the industry have changed the game: ChatGPT & Bard: AI-generated writing challenges traditional content marketing. Canva & Runway ML: AI-powered design and video editing reduce reliance on professionals. TikTok & Reels: Short-form AI-assisted content shifts audience engagement from blogs/articles to bite-sized video storytelling.

4. Challenges in Changing Markets Disruptive Innovation: Introduces simpler, cost-effective alternatives to existing products. Examples: Streaming services replaced traditional cable, forcing companies like Disney and HBO to adapt. Commoditization Threats: Standardized products lead to price wars and lower profits. Example: As premium features became standard across brands, HTC lost market share to Apple & Samsung. Creating New Market Space: Businesses expand beyond traditional boundaries to find unmet needs. Example: Instead of competing in the saturated gas-powered market, Tesla pioneered mass-market EVs. Fast-Changing Markets: Rapid shifts in technology, consumer behavior, and competition demand agility. Example: AI-powered chatbots are changing how users search, forcing Google to rethink its search strategy.

5. Understanding End-Users in Modern Markets Demographics & Psychographics Age, income, lifestyle, preferences, values, etc. Example: Netflix tailors content for Gen Z (interactive content) vs. Baby Boomers (classic movies). Geographical Differences Regional preferences and purchasing power. Example: Apple offers cheaper iPhones (SE series) for developing markets like India & Brazil. Industry-Specific Buying Patterns Organizational buyers vs. individual consumers. Example: Amazon Web Services (AWS) serves startups and global enterprises differently.

6. How Buyers Make Decisions Today Need Recognition – Problem awareness. Example: Consumers seek vegan food options due to trends. Information Search – Research via social media, reviews, influencers. Example: YouTube unboxing videos influence tech purchases. Evaluation of Alternatives – Comparing price, quality, features. Example: Consumers compare Samsung and iPhone based on camera performance. Purchase Decision – Choosing the best fit. Example: The rise of "Buy Now, Pay Later" (BNPL) like Klarna influences buyer commitment. Post-Purchase Behavior – Reviews, loyalty, returns. Example: Negative TikTok reviews can destroy a brand’s reputation overnight.

7. External Influences on Buyer Behavior Economic Conditions: Inflation & recession impact spending. Example: Luxury brands like Gucci introduce entry-level products during downturns. Technology & Social Media: AI, automation, and digital ads influence decisions. Example: AI-powered chatbots personalize e-commerce experiences. Government Regulations: Data privacy laws impact online businesses. Example: GDPR laws in Europe changed how companies collect consumer data. Sustainability Trends: Consumers favor eco-friendly brands. Example: Patagonia’s “Don’t Buy This Jacket” campaign boosted ethical consumerism.

8. Analyzing Competition What is the Competitive Arena? The market space where businesses compete for customer attention. Involves direct competitors (same category) and indirect competitors (alternative solutions). Levels of Competition Generic Product Market: Broad category of products/services fulfilling the same need. Example: The transportation market includes cars, buses, bicycles, ride-sharing apps, and electric scooters. Specific Product Market: A more defined category of similar products. Example: The automobile market within transportation includes EVs, hybrid cars, and fuel-powered vehicles. Product Variant Market: A niche category within the specific product market. Example: The luxury EV segment within automobiles includes brands like Tesla, Porsche Taycan , and Lucid Air.

9. Analyzing Competition What is the Competitive Arena? The market space where businesses compete for customer attention. Involves direct competitors (same category) and indirect competitors (alternative solutions). Levels of Competition Generic Product Market: Broad category of products/services fulfilling the same need. Example: The transportation market includes cars, buses, bicycles, ride-sharing apps, and electric scooters. Specific Product Market: A more defined category of similar products. Example: The automobile market within transportation includes EVs, hybrid cars, and fuel-powered vehicles. Product Variant Market: A niche category within the specific product market. Example: The luxury EV segment within automobiles includes brands like Tesla, Porsche Taycan , and Lucid Air.

10. Analyzing Competition Porter’s Five Forces Model Competitive Rivalry (Industry Competition): High when many competitors offer similar products. Factors: Price wars, product differentiation, customer loyalty. Example: Smartphone industry – Apple vs. Samsung vs. Google. Threat of New Entrants: High when barriers to entry (cost, brand loyalty, regulations) are low. Factors: Capital investment, economies of scale, brand recognition. Example: Streaming services – Netflix faces competition from new entrants like Disney+ and Apple TV+. Threat of Substitutes : High when alternative products/services fulfill the same need. Factors: Price, convenience, quality of substitutes. Example: Coffee vs. Energy Drinks – Starbucks competes with Red Bull for an energy boost.

11. Analyzing Competition Porter’s Five Forces Model Bargaining Power of Suppliers: High when few suppliers control key inputs. Factors: Supplier concentration, switching costs, availability of alternatives. Example: Chip manufacturers – TSMC holds significant power over tech giants like Apple and NVIDIA. Bargaining Power of Buyers: High when customers have many choices or can negotiate prices. Factors: Product differentiation, price sensitivity, customer loyalty. Example: Airline industry – Passengers compare prices across multiple airlines before booking.

12. Key competitor Analysis Competitor Profiling Company Overview: Market share, revenue, brand positioning. Product Analysis: Strengths, weaknesses, differentiation. Marketing Strategies: Pricing, promotions, distribution channels. SWOT Analysis of Competitors. Market Positioning & Competitive Advantage (Cost leadership, differentiation, niche market)

13. Key competitor Analysis Competitor Profiling Company Overview: Market share, revenue, brand positioning. Product Analysis: Strengths, weaknesses, differentiation. Marketing Strategies: Pricing, promotions, distribution channels. SWOT Analysis of Competitors. Market Positioning & Competitive Advantage (Cost leadership, differentiation, niche market)

14. Anticipating Competitor Moves Monitor Market Trends: Changes in customer preferences, emerging technologies, and industry shifts. Track Competitor Behavior: Pricing Strategy: Are they lowering prices to capture market share? Product Innovations: Are they investing in R&D for new offerings?Marketing Campaigns: Are they shifting branding or expanding outreach? Analyze Their Strengths & Weaknesses: Use SWOT analysis to predict their likely responses. Identify resource constraints that may limit their actions. Competitive Intelligence Tools: Social Media & PR Tracking: Monitor announcements, ads, and customer engagement. Financial Reports & Market Research: Look at investments, sales trends, and strategic shifts. Customer & Industry Insights: Gather feedback on competitor products and service changes

15. Market Size Estimation Top-Down Approach: Uses industry reports & market data to estimate market potential. Example: IDC estimates the global PC market is worth $200B.🔹 Bottom-Up Approach: Starts with individual data points (e.g., sales per store, customer demand) and scales up. Example: A coffee chain estimates market size based on coffee sales per outlet. Value Chain Analysis: Analyzes different stages of the supply chain to assess demand. Example: Tracking semiconductor sales to estimate smartphone market size.

16. Sales Forecasting Techniques User Expectations: Forecasting based on direct customer input. Example: A luxury car brand surveys high-income customers to estimate demand for a new electric SUV. Sales Force Composite: Sales team provides demand estimates based on client interactions. Example: A tech company asks its sales reps to predict demand for AI-powered laptops based on client inquiries. Jury of Executive Opinion: Senior executives discuss and predict sales based on experience and market trends. Example: Nike's senior executives analyze sports trends to forecast demand for their next sneaker launch. Delphi Technique: Experts anonymously provide and refine forecasts through multiple rounds. Example: A panel of healthcare experts predicts the demand for telemedicine services over the next five years.

17. Sales Forecasting Techniques Market Test: Introducing a product in select markets to gauge demand before a full launch. Example: Starbucks releases a new seasonal drink in select cities to test customer response before a nationwide rollout. Time-Series Analysis: Analyzing historical sales data to predict future demand. Example: Netflix examines past viewership trends to forecast interest in its next sci-fi series. Statistical Demand Analysis: Using economic and market factors to estimate sales. Example: An airline studies fuel prices, travel trends, and economic conditions to predict summer ticket sales.

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