Competition Flashcards
(24 cards)
Free Market
Successful business people can keep some of the money they make
Profit
Drives business- the more you make the more you keep, amount of money your company makes
Private property
People can buy things, keep them, sell them or give them away
Perfect competition
A large number of small companies and none have the opportunity for market control. Requires government legislation to restrict growth in order to prevent market dominance by any of the competitors.
Monopolistic competition
Large number of companies each having opportunity for market control
Oligopoly
A market with a small number of large companies each with a substantial market control
Monopoly
Is a market where a single company has complete market control
Benefits of competition
- Encourages creation for new business.
- Businesses grow for one another
- Wider selection of goods and services
- Better costumer service relations
- Better product, price, new technology, increased productivity that improves the standards of living
Types of competition
- Direct competition
* Indirect competition
Direct competition
Customer chooses product from the same company
Ex. Nike and Adidas
Indirect competition
Anything consumers can spend their money on, around the same price range.
Ex. iPhone and Micheal Kors
Sustainable competition advantages
- Developing a unique selling point
- Lowering production costs
- Servicing a Niche Market
- Creating customer loyalty
Developing a USP
One thing the companies product has that the competition does not and will mostly likely not develop. Why would consumers buy from my company ? A unique design, brand name, logo
Lowering production costs
By using high technology and manufacturing systems and processing to reduce the costs, associated with its products will give them an advantage
Ex. Building a plant in another country with lower resource costs, fewer taxes and lower costs of living
Servicing a Niche market
Marketers need to recognize an opportunity to create a niche market and take advantage of that opportunity.
Creating customer loyalty
Also known as intimacy or relationship marketing, consumer develops a strong relationship with a product or retail and will not consider other brand or another store unless the favoured product or retailer makes a big mistake
Non sustainable competition advantages
- Promotion
- Place
- Quality
- Benefits of use
- Price
- Design features
Promotion
Sales, give aways, contests, can be copied by other companies. Companies use this to gain TOP- OF - MIND - AWARENESS, be the first brand consumers think of
Placement
The more places you sell, the more competitive your product is
Quality
- a product can compete with other products in its category by being the best in its type
- companies add features that will improve the product and take away ones that are not beneficial
Benefits of use
•if a product can do more or preform better than another product they will be competitive
Price
If a consumer thinks the product are similar the less expansive product have the competitive advantage. Marketers who focus for price with have a difficult time because other companies may have price reductions
Design Features
Design influence the way a product looks and what it can do. The design of a product needs to catch the consumers interests or they will not purchase it
Service competition
Companies offer value added services which are activities performed to support the sale of a product or service •convenience •degree of service •selection •reputation •Price
