Lecture 2 ( Schulz) Flashcards
(11 cards)
what is the competition?
Competition, in economics, is defined as the effort of enterprises to be leaders in their industry and increase their market share.
The competition will be influenced by customer needs.
BLUE OCEAN STRATEGY, Red Ocean strategy
Red ocean are all the industries in existence today – the known market space.
Red ocean strategy is all about competition. As the market space gets more crowded, companies compete fiercely for a greater share of limited demand.
- Competing for the existing market
- Beat the competition
- Exploit existing demand
- Make the value cost trade-off
- Align the whole system of the firm’s activities with its strategic choice of differentiation or low cost.
Blue Ocean Strategy is a marketing theory in which a business enters a market that has little or no competition. The strategy focuses on moving away from an existing market and searching for new markets in which few or no firms operate and where there is no pricing pressure.
- Make the competition irrelevant
- Create and capture new demand
- Brake the value cost trade off
- Align the whole system of the firms activities in persuade of differentiation and low cost
What is the market potential?
Market Potential: The entire size of the market for the product at a specific time. It represents the upper limits of the market for the product.
( measured by sales volume/value)
What is the saturated market?
Saturated market: Market saturation is a situation that arises when the volume of a product or service in a marketplace has been maximized. ( PC industry)
What is market volume?
Market volume: The total amount of transaction observed in a specific market place over a specified time frame
What is the market share?
Market share is a portion of market controlled by a particular company or product.
MARKET ENVIRONMENT
Task Environment:
- Production
- Distribution
- Promotion
Broad environment:
- Economic E
- Technological E
- Demographic E
- Political E
- Natural E
What is it CO-CREATION?
The customer is engaged in the production process (LEGO)
- Product more personal to the customer
- More valuable
DIRECT/INDIRECT DISTRIBUTION
DIRECT DISTRIBUTION
- Business directly sells to the customer.
- Closer customer relationship
INDIRECT DISTRIBUTION
- 3rd Party does all the work for you.
- Less logistics for you.
4P ́S
4P’S
- Product
- Price
- Place
- Promotion
Relationship marketing
Relationship Marketing focuses on the customer and tries to build a meaningful relationship so the customer comes back.
