Slide4_2010Fall_MGMT324

Identifying the key competitors who why important to

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Identifying the Key Competitors (Who) Why important? To better allocate limited resources Example: To react more efficiently to competitors’ actions Sometimes not obvious Many brands in the same product category Multiple product lines for a company
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Identifying the Key Competitors (Who) How? Ask consumers 1) (Dis)Similarity rating between a pair of brands or 2) Perceived attribute levels of each brand Æ Construct (Perceptual) Product Map Observe consumers’ brand switching behavior Æ Construct Price Elasticity Matrix
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Close Æ Close substitute Perceptual Product Map (From Dissimilarity Rating) 2 5.5 6 Viagra Levitra Cialis Viagra 1 Levitra 2 1 Cialis 6 5.5 1
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Close Æ Close substitute Meister Brau Stroh’s Beck’s Heineken Old Milwaukee Miller Coors Michelob Miller Lite Coors Light Old Milwaukee Light Budweiser Premium Budget Heavy Light Perceptual Product Map (From attribute levels)
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A simple computational example Price Elasticity Matrix Price elasticity (of demand) i i j j ij P P Q Q Δ Δ = ε % change of j ’s demand (or quantity sold) % change of i ’s price If i = j , OWN price elasticity. Otherwise, CROSS price elasticity Two brands: A and B Brand A lowers its price while brand B’s price remains same Price Quantity sold Brand A $10 100 Brand B $12 80 Price
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