ch11 dealing with competition gianan

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Top 10 Learning Questions for

Chapter 11DEALING WITH COMPETITION

Oamar Nanaig GiananDecember 29, 2011

V56 Marketing Class ofProf. Remigio Joseph De Ungria

Chapter 11 Marketing Management, Kotler 14th ed

http://www.slideshare.net/maogianan


1. Which of the 5 forces determining market segment attractiveness is applicable where consumers have access to alternative products and services which would essentially satisfy the consumers' needs?

A. Threat of intense segment rivalry.B. Threat of new entrants.C. Threat of substitute products.D. Threat of buyers’ growing bargaining power.E. Threat of suppliers’ growing bargaining power.




1. The Five Forces Determining Segment Structural Attractiveness according to Michael Porter.

Industry Competitors(Segment rivalry)

Potential Entrants(Threat of mobility)

Buyers(Buyer power)

Substitutes(Threat of substitutes)

Suppliers(Supplier power)






Buyers(Buyer power)



A segment is unattractive when there are actual or

potential substitutes for the

product. Substitutes place a limit on prices and

profits

A segment is unattractive when there are actual or

potential substitutes for the

product. Substitutes place a limit on prices and

profits






Buyers(Buyer power)



Buyers posses strong bargaining

power, which gives buyers more

power to negotiate.

Buyers posses strong bargaining

power, which gives buyers more

power to negotiate.

Segment is attractive if competition cannot

come in easily

Segment is attractive if competition cannot

come in easily

Suppliers can raise prices or reduce supplies for the segment’s raw

materials.

Suppliers can raise prices or reduce supplies for the segment’s raw

materials.

If the segment already has lots of strong or aggressive players, it is unattractive.

If the segment already has lots of strong or aggressive players, it is unattractive.


1. Which of the 5 forces determining market segment attractiveness is applicable where consumers have access to alternative products and services which would essentially satisfy the consumers' needs?

A. Threat of intense segment rivalry.B. Threat of new entrants.C. Threat of substitute products.D. Threat of buyers’ growing bargaining power.E. Threat of suppliers’ growing bargaining power.



2. Which is a more attractive scenario for a new company to venture into a market segment?

A. Segment has high entry barrier, and high exit barrier.

B. Segment has high entry barrier, and low exit barrier.

C. Segment has low entry barrier, and high exit barrier.

D. Segment has low entry barrier, and low exit barrier.



2. Entry and Exit barriers


Industries differ greatly in ease of entry. Major entry barriers include high capital requirements; economies of scale; patents & licensing; scarce locations; raw materials.

Exit barriers also exist.Legal or moral obligations to customers, creditors and employees; government restrictions; low asset-salvage; lack of alternative opportunities; high vertical integration.

High Entry barrier Low exit barrier

The most attractive segment is when few new firms can enter the

industry, and poor-performing firms can exit easily


2. Entry and Exit barriers


High Entry barrier High exit barrier

Low Entry barrier Low exit barrier

Low Entry barrier High exit barrier

Profit potential is high, but firms face more risk because poorer-performing

firms stay and fight it out

Firms easily enter and leave industry; returns are stable and low

The worst: Firms enter during good times but find it hard to leave during

bad times.


2. Which is a more attractive scenario for a new company to venture into a market segment?

A. Segment has high entry barrier, and high exit barrier.

B. Segment has high entry barrier, and low exit barrier.

C. Segment has low entry barrier, and high exit barrier.

D. Segment has low entry barrier, and low exit barrier.



3. What type of competition is exhibited by the local telco companies: PLDT, Globe, Digitel?


A. Pure monopolyB. OligopolyC. Monopolistic competitionD. Pure competition


3. Industry Concept of Competition


1. Pure Monopoly2. Oligopoly

• A small number of large firms offer relatively the same product/service.

• Such companies find it hard to charge higher than the going price.

• Gaining competitive advantage is by reducing internal costs.3. Monopolistic competition4. Pure competition


3. Industry Concept of Competition


1. Pure Monopoly• Only one firm provides a certain product or service in a certail area.• If monopolist is unregulated, it can charge higher prices for minimal cost

of service/product• A regulated monopolist is required to charge at lower margins as a

matter of public interest.2. Oligopoly3. Monopolistic competition

• Many competitots are able to differentiate their offers in whole or in part (restaurants, beaty shops)

4. Pure competition• No basis for differentiation. (Commodities market)


3. What type of competition is exhibited by the local telco companies: PLDT, Globe, Digitel?


A. Pure monopolyB. OligopolyC. Monopolistic competitionD. Pure competition



4. In analyzing competitors, a competitor has "Share of ____" when consumers name the competitor as their preferred company to buy a product from?

A. Share of marketB. Share of mindC. Share of heart


4. Variables in analyzing competition


Share of market Share of mind Share of heart

The competitor’s share of the target market

The percentage of customers who named the competitor in responding to the statement: “Name the first company that comes to mind in this industry”

The percentage of customers who named the competitor in responding to the statement: “Name the company from which you would prefer to buy the product”



4. In analyzing competitors, a competitor has "Share of ____" when consumers name the competitor as their preferred company to buy a product from?

A. Share of marketB. Share of mindC. Share of heart



5. In expanding the total market, firms can devise this strategy to get customers who use the competitor’s products.

A. Market penetration strategyB. New-market segment strategyC. Geographical-expansion strategy



5. Expanding the Total Market

NEW CUSTOMERS Companies can search for new users among 3 groups:•Those who might use it but do not (market penetration strategy)•Those who have never used it (new market strategy)•Those who live elsewhere (geographical expansion strategy)



5. In expanding the total market, firms can devise this strategy to get customers who use the competitor’s products.

A. Market penetration strategyB. New-market segment strategyC. Geographical-expansion strategy



6. In expanding the total market, what strategy is being used by these companies? Oral-B indicator; BRITA water purifiers.

A. New CustomersB. More Usage




NEW CUSTOMERS

MORE USAGE

Companies can search for new users among 3 groups:•Those who might use it but do not (market penetration strategy)•Those who have never used it (new market strategy)•Those who live elsewhere (geographical expansion strategy)

Usage can be increased by:•Increasing the level or quantity of consumptions•Increasing the frequency of consumption




MORE USAGEUsage can be increased by:•Increasing the level or quantity of consumptions•Increasing the frequency of consumption

Cartridge must be replaced when bars are empty

Brush must be replaced when blue strip has faded



6. In expanding the total market, what strategy is being used by these companies? Oral-B indicator; BRITA water purifiers.

A. New CustomersB. More Usage



7. Which defense strategy did PAL use against Cebu Pacific in acquiring and restructuring Airphil Express?

A. Position DefenseB. Flank DefenseC. Preemptive DefenseD. Counter-offensive defenseE. Mobile defenseF. Contraction defense



7. Defending Market Share

DEFENDER

(1)Position

(2) Flank

(5) Mobile

(3) Pre-emptive

(4) Counter-offensive

ATTACKER




(2) Flank

Market leader should erect outposts to protect a weak front.


Premium



Budget

Note: Strategy was a little too late though as CEB already ate up PALs market dhare for domestic flights



7. Which defense strategy did PAL use against Cebu Pacific in acquiring and restructuring Airphil Express?

A. Position DefenseB. Flank DefenseC. Preemptive DefenseD. Counter-offensive defenseE. Mobile defenseF. Contraction defense



8. What kind of attack are "Price Wars"?

A. Frontal attackB. Flank attackC. Encirclement attackD. Bypass attackE. Guerilla attack



8. Attack Strategies

1. Frontal Attack• Attacker matches opponent’s product, advertising, price and distribution.

2. Flank Attack• Targeted at enemy’s weak spots.

3. Encirclement Attack • “Blitz”. Launching a grand offensive on all fronts.

4. Bypass Attack• Indirect strategy where attack is done on easier markets to broaden one’s

resource base5. Guerilla Attack

• Small, intermittent attacks meat to harass, demoralize competitor.



8. What kind of attack are "Price Wars"?

A. Frontal attackB. Flank attackC. Encirclement attackD. Bypass attackE. Guerilla attack



9. The "Halo Effect" generated by Apple's mobile devices (iPod, iPhone, iPad) is a good example of which kind of attack on the PC industry?A. Frontal attackB. Flank attackC. Encirclement attackD. Bypass attackE. Guerilla attack



9. Attack Strategies

1. Frontal Attack• Attacker matches opponent’s product, advertising, price and distribution.

2. Flank Attack• Targeted at enemy’s weak spots.

3. Encirclement Attack • “Blitz”. Launching a grand offensive on all fronts.

4. Bypass Attack• Indirect strategy where attack is done on easier markets to broaden one’s

resource base5. Guerilla Attack

• Small, intermittent attacks meat to harass, demoralize competitor.



9. Halo Effect

Customers buying iPods are also buying Macs(http://www.macobserver.com/tmo/article/Analysts_Agree_Apples_Halo_Effect_Might_Be_the_Real_Deal/)



9. The "Halo Effect" generated by Apple's mobile devices (iPod, iPhone, iPad) is a good example of which kind of attack on the PC industry?A. Frontal attackB. Flank attackC. Encirclement attackD. Bypass attackE. Guerilla attack



10. Tokai, Guyatone, Photogenic, Greco are electric guitar manufacturers. Which Market-follower strategy?

A. CounterfeiterB. ClonerC. ImitatorD. Adapter



10. Market-Follower strategy

1. Counterfeiter• Counterfeiter duplicates the leader’s product and packaging and sells it

under the guise that it is an original product.2. Cloner

• Emulates products, name and packaging with slight variations.3. Imitator

• Copies things but maintains differentiation in terms of packaging, advertising, pricing or location

4. Adapter• Takes leader’s product and adapts or improves on them



10. Market-Follower strategy

Gibson SG

Fender Stratocaster

Gibson Les Paul

Tokai SG

GrecoStrat

PhotogenicLes Paul



10. Tokai, Guyatone, Photogenic, Greco are electric guitar manufacturers. Which Market-follower strategy?

A. CounterfeiterB. ClonerC. ImitatorD. Adapter


Top 10 Learning Questions for

Chapter 11DEALING WITH COMPETITION

Oamar Nanaig GiananDecember 29, 2011

V56 Marketing Class ofProf. Remigio Joseph De Ungria

Chapter 11 Marketing Management, Kotler 14th ed


ch11 dealing with competition gianan

Business

electric guitar

intermittent

restructuring

brita water

enemys weak

high exit

low exit barrier

high entry