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PRINCIPLESOFMARKETINGSTUDYGUIDES…16EDCHAPTERS 18-20CHAPTER 18 STUDY GUIDECompetitive Advantage1.p. 544PPT 18-4PPT 18-5Today’s companies face their toughest competition ever.To win in today’s marketplace, companies must becomeadept not just in managing products, but in managingcustomerrelationshipsinthefaceofdeterminedcompetition.Building profitable customer relationships and gainingcompetitive advantagerequires deliveringmorevalue andsatisfaction to target consumers than competitors do.Customers will see competitive advantages ascustomeradvantages.The first step iscompetitor analysis—the process ofidentifying, assessing, and selecting key competitors.The second step is developingcompetitive marketingstrategiesthat strongly position the company againstcompetitors and give it the greatest possible competitiveadvantage.p. 544Key Terms:CompetitiveAdvantage,CompetitorAnalysis,CompetitiveMarketingStrategiesp. 545COMPETITOR ANALYSISAs shown in Figure 18.1, competitor analysis involves firstidentifying and assessing competitors and then selecting
PPT 18-6p. 545PPT 18-7which competitors to attack or avoid.Identifying CompetitorsAt the narrowest level, a company can define itscompetitors as other companies offering similar productsand services to the same customers at similar prices.But companies actually face a much wider range ofcompetitors. The company might define competitors as allfirms making the same product or class of products.Evenmorebroadly,competitorsmightincludeallcompanies making products that supply the same service.Finally, and still more broadly, competitors might includeall companies that compete for the same consumer dollars.Companies must avoid “competitor myopia.” A company ismore likely to be “buried” by its latent competitors than itscurrent ones.Companies can identify their competitors from theindustrypoint of view. A company must understand the competitivepatterns in its industry if it hopes to be an effective “player”in that industry.Companies can also identify competitors from amarketpoint of view. Here they define competitors as companiesthat are trying to satisfy the same customer need or buildrelationships with the same customer group.In general, the market concept of competition opens thecompany’s eyes to a broader set of actual and potentialcompetitors.Assessing CompetitorsDetermining Competitors’ Objectivep. 527Photo: Blockbuster
p. 547p. 547PPT 18-8Each competitor has a mix of objectives.The company wants to know the relative importance that acompetitor places on current profitability, market sharegrowth,cashflow,technologicalleadership,serviceleadership, and other goals.Knowing a competitor’s mix of objectives reveals whetherthe competitor is satisfied with its current situation and howit might react to different competitive actions.

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