Prepared by: Hiba Assaf & Nathalie Fakhry

Chapter 3- Market and Competitive space

Market Space: is defined as a virtual market place n commercial world where the limitation of
physical boundaries are not applicable. In other words, it’s an integration of several market
places via technology or via an exchange environment that is operated by electronic
information. It’s considered a bi-directional unit as both buyers and sellers can buy and sell
through transactions in such portals. Some examples are Alibaba, Aliexpress, Amazon, Twitter
etc…
Competitive Space: is the places where two or more companies or organization strive to gain
profit by competing with one another using various tactics to gain competitive edge.

Challenges: Many challenges can face us in the markets as they are complex, turbulent and
interrelated and these challenges may be caused by unstable economic climate changing,
customer needs, up and coming technology, poverty etc…so based on the above we should
create a view of a market and develop a future vision about how likely the market could
change.
Continuous monitoring: focusing on the changing opinions, needs, desires, and behaviors is
very important also.

How markets and strategies are integrated?

Marking strategy: it’s a long term forward looking approach and overall plan of any
organization to achieve competitive advantage of understanding the needs and wants of
customers and creating value for them.
Value Migration: is the shifting of value creating forces, which means that customers immigrate
because of our business model is outmoded and customers are finding companies which create
more value for them and probably through a better business model and customer satisfaction,
so being aware of disruptive technologies, market sensing and organization learning is essential.
So this illustrates why market and strategies are interlinked. If we are in the correct market, and
our long term vision hits the target so our customers won’t immigrate to another company.
Market impact strategies: this means when the market changes so the strategy should change
and as a result of these changes both opportunities and threats may be created and danger in
faulty market sensing.

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Product market scope strategies: essentially these strategies involve decisions about what
types of products a company will offer and what markets a company plans to target with those
products. Developing a product-scope strategy typically starts with analyzing a company’s
resources. In other words, we say that if we fail to sell the right product or to target the right
market, this will doom our business, so we should research our options carefully. To explain
more we can say that the term product –market recognizes that markets exist only when there
are buyers with needs who have the ability to purchase goods and services and products are
available to satisfy them.
There are three main points we should focus on while determining the scope of the product-
market:
1- Identify buyers in the market based on their interest (geographical area, buyer’s
characteristics ex. age, group etc...)
2- The market size and characteristics.
3- Brand/product categories competing for the needs and wants of the buyer.

Product: Anything that can be offered to a market for attention, acquisition, use or
consumption that might satisfy a want or need. It includes physical objects, services, persons,
places, organizations and ideas. In retail, products are called merchandise. In manufacturing,
products are purchased as raw materials and sold as finished goods.
*Here they are giving an example about innovation feature. What is innovation? It’s the
introduction of a new good or new quality of good, method of production, market, source of
supply and organization in an industry or to improve an existing concept or idea, to redesign.
In this example, the company invents new ways of providing services to save customer’s time
and money, often lowering costs at the same time. They send loose adjuster to the roan
accident to evaluate the accidents and they have the power to write checks on the spot. They
reduced the time needed damaged automobiles from 7 days to 9 hours as well as the cost of
storing a damaged car.
Product-Market structure: a market structure can be understood as a system for categorizing
the products and services offered by the firms according to the nature and level of competition
in the market ex Amazon is an online market.

What are the contents of market structure?

Determinants: means how we determine the market structure and what factors are involved.

 Factors: Number of sellers: the number of firms selling a particular product in the
market and determine the level of completion.

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  Number of buyers: buyers decide the demand for a particular product and influence the
price of the product.
 Economies of scale: the size of the firm or the product level of production contributes to
a market structure (size of business)
 Nature of product: the product feature determines the type of market structure to
which it belongs. If the product is unique and has no other substitutes, it create a
monopoly in the market.
 Entry barriers: the profitability of a product invites the seller to enter such markets. The
market runs on the rule “survival of the fittest” where weak firms exit and strong ones
survive.
 The mobility of goods: easy transportation of goods from production place to the
market ensures uniform prices by different sellers.
 Government intervention: some markets are indirectly controlled by the government as
imposes heavy taxes or make the license mandatory to restrict the entry of firms.

Product-market boundaries: there are many factors that influence the product-market
boundaries.
1. The purpose foe analyzing the product market based on the financial performance
and competitive position. On other words if the business is feasible or not.
2. The rate of changes in market composition over time, and this can be influences
when new technologies become available and new completion emerges.
3. And the last one is the extent of market complexity and this point is based on three
characteristics:
 The function or uses of the product required by the customers
 The technology contained in the product to provide desired functions and
satisfaction.
 The different customer’s segments using the product to perform a particular
function, this means the diversity of the customer’s needs in a particular
market ex. Automobiles.
*Another example of illustrative product-market structure: here they took food and beverages
for breakfast mal. This’s called the product class, means what type of product is this. Here they
mentioned its cereal. They distributed different variants of this product with different
specifications and different brands that meet the needs of different customers.

DESCRIBING AND ANALYSING END USERS

What is end user?

In product development, an end user (account, client, customer, guest, patron.. etc.) is a person who
ultimately uses or is intended to ultimately use a product.

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End users are also people or even animals that consume products. For example, a woman will often buy
groceries for her family, who eat the food during the week. In addition, a pet owner will buy dog food for
her dog, the end user. Consequently, the end user is not always the person buying the product or service.

 Identifying and describing buyers

Characteristics such as family size, age, income, geographical location, sex, and occupation are often
useful in identifying buyers in consumer markets. Illustrative factors used to identify end-users in
business markets include type of industry, size, location, and product application. Many published
sources of information are available for use in identifying and describing customers. When
experience and existing information do not clearly identify buyers, research studies may be necessary
to locate and describe customers and prospects.

How do u identify your customer?

- Define the ideal customer for what you sell. ...
- Determine the specific benefits your customer is seeking in buying - your product. ...
- Determine the location of your exact customer. ...
- Determine exactly when your ideal customer buys your product or service. ...
- Determine your customer's buying strategy.
After identifying the buyer we need to describe into which category they fall
-spendthrifts

-average spenders
-frugalists.

 Building customer profile

It is a document that lists pain points, interests, buying patterns, and demographic characteristics of a
company's customers.

 Environmental influences
Firstly, external conditions or surroundings, esp. those in which people live or work. Secondly, in
ecology it’s the external surroundings in which a plant or animal lives, which tend to influence its
development and behavior.

External influences are factors that a business may have little or no control over, such factors include:
Economic, financial, geographical, social, legal, political, institutional, technological, competitive
situation and markets influences.

 How buyers make choices (slide19)

Simply describing buyers does not provide enough information for targeting and positioning
decisions. We need to try to find out why people buy products and brands. When considering how
customers decide what to buy. it is useful to analyze how they move through the sequence of steps
leading to a decision to purchase a particular brand. Buyers normally follow a decision process. They
begin by recognizing a need, next they seek information; then, they identify and evaluate alternative
products; and finally, choose a brand. Of course, this process varies by product and situation.
Decisions that are repetitive and for which a buyer has past experience, tend to be routine. One part
of study in buyer decision processes is finding out what criteria people use in making decisions. Far
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 example, how important is the brand name of a product in the purchase decision?

ANALYZING COMPETITION

PRODUCT-MARKET STRUCTURE AND MARKET SEGMENTS

We begin by defining the industry structure in which an organization competes and describing the
character Tics of the industry. Steps two and three identify, describe, and, evaluate the organization key
competitors. Steps four and five consider competitors' future actions and identify potential competitors
that may enter the market.

1. Define industry structure and characteristics (slide24 &25)

The industry identification is based on product similarity, location at the same 'level in the
channel of distribution (e.g., manufacturer, distributor, retailer) and geographical scope.

The industry analysis includes:

-Industry size, growth, and composition. .

-Typical' marketing practices.

-Industry changes that are anticipated. (Industry strengths and weaknesses)

-Strategic alliances among competitors.

It is useful to examine industry structure beyond domestic market boundaries, since

international industry development may affect regional, national, and international markets.

2. Identify and describe key competitors (slide26)

Key competitors are the ones who take your customers, even if those companies do not sell the
same exact product or service as you do.

3. Evaluate key competitors (slide27 &28)

Determining market coverage, customer satisfaction, and past performance supplies useful
information about competitors. Using this information, we can develop an overall evaluation of
the key competitor's current strengths and weaknesses. Additionally, the summary assessment of
current capabilities includes information on the competitor's management capabilities and
limitations technical and operating advantages and weaknesses, marketing strategy, and other
key strengths and limitations. Since competitors often have different capabilities, it is important
to highlight these differences.

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 4. Anticipate actions by competitors (slide29)
It’s to expect a competitive action from competitors, which is a strategic or tactical action the
firm takes to build or defend its competitive advantages or improve its market position.

5. Identify new competitors

New competitors often come from three major sources: companies competing in
a related product-market, companies with related technologies, and/or
companies already targeting similar customer groups with other products.

DEVELOPING A STRATEGIC VISION ABOUT THE FUTURE

The strategic vision provides an overview of where you want to be at in a specific time
in the future. ... The vision should also support the strategies and agenda of the target
audience. The strategic vision can be short or long term, depending on the type and
duration of the project being proposed.

Marketing strategy is defined as the analysis, strategy development, and

implementation activities in selecting market target strategies for the product-markets of
interest to the organization, setting marketing objectives, and developing,
implementing, and managing the marketing program positioning strategies designed to
meet the needs of customers
MARKET SIZE ESTIMATION

Market size is the total number of likely buyers of your product or service within a
given market. To calculate market size, you need to understand your target customer.
Assess interest in your product by looking at competitor sales and market share, and
through individual interviews, focus groups or surveys.

An important part of market opportunity analysis is estimating the present and potential
size of the market. Market size is usually measured by dollar sales and/or unit sales for
a defined product-market and specified trifle period. Other size measures include the
number of buyers, average purchase quantity, and frequency of purchase. Three key
measures of market size are: marker potential, sales forecast, and market share.

 Product-Market forecast relationships (slide31)

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Significant gains have been made in forecasting for marketing, especially since the
1960. Advances have occurred in the development of methods based on
judgment, such as Delphi, role-playing, intentions studies, opinions surveys, and
bootstrapping. They have also occurred for methods based on statistical data,
such as extrapolation, role based forecasting, and econometric methods. In the
1990s, gains have come from the integration of statistical and judgmental
forecasts.