Professional Documents
Culture Documents
Competition
Competition
Introduction
Marketing
4-1 4-2
Type
Type Description
Description
• The four basic industry structures are:
–Monopoly One
One Seller,
Seller, Unique
Unique Product,
Product, No
No Competitors
Competitors or
or
Monopoly
Monopoly Close
Close Substitutes
Substitutes
–Monopolistic competition Large
Monopolistic Large Number
Number of of Sellers,
Sellers, Products
Products
Monopolistic
–Oligopoly Competition
Competition
Distinguishable,
Distinguishable, Sellers
Sellers believe
believe they
they have
have
competition - including substitutes
competition - including substitutes
–Pure competition
Few
Few Sellers,
Sellers, High
High Barriers
Barriers to
to Entry,
Entry, Inelastic
Inelastic
Oligopoly
Oligopoly Demand,
Demand, Seek
Seek Non-price
Non-price Advantage
Advantage
Pure Many
Many Buyers
Buyers and
and Sellers,
Sellers, Identical
Identical Products,
Products,
Pure Full
Full knowledge,
knowledge, Easy
Easy entry,
entry, Elastic
Elastic Demand,
Demand,
Competition
Competition Focus
Focus on
on Lower
Lower Costs
Costs
4-3 4-4
4-5 4-6
4-9 4-10
Competitors’
Competitors’ Strengths and Competitive Reaction Patterns
Weaknesses
• Six competing positions to occupy in a • Not all firms respond to competition the
market: same. There are:
– the laid-back competitor
– dominant
– strong – the selective competitor
– favourable – the tiger competitor
– the stochastic competitor
– tenable
– weak
– nonviable
4-11 4-12
4-13 4-14
• House brands
• Not all parts of a market are equally • No frills shopping
attractive • Extended services
• Attractive segments must be: • Credit facilities
– sufficiently distinctive • Loyalty cards
– substantial enough • Clubs for account-holders
– measurable • Use of technology
– durable • Smart cards
– identifiable
4-15 4-16