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MARKET PLACE
COMPETITIONBy Francis Wachira
Part one
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RECAP
We have established certain needs in themarket place.
We have come up with something themarket will want to use to satisfy thoseneeds.
We have done a business plan (includesmarketing financial et cetera) and we havestarted selling our products.
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THE GENESIS
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COMPETITION
1) First we may not have correctly identifiedthe need. Some needs are hidden
E.G. Why do people go to the Intercontinental?
Why do people go to K-street?
Why do people read Playboy magazine? Why do people go to church?
Why do people fly first class?
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2. The need has different products that cansatisfy it. This may vary from person to
person, time to time, place to place etcetera.
With the passage of time new products
may come and satisfy the need better.
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POSSIBLE SATISFIERS
OVER TIME
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HUNGER
Boiled sweet
potatoes
Githeri Mukimo
Ugali & beef stew
Rice & beef stew Brown rice with
fish fillet
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THIRST
Water
Porridge
Black or white tea Cappuccino
Soya drink
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TRANSPORT
Bicycle matatu
Chopper
Hummer
Ship
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COMMUNICATION
Talking Drums
Analogue radial
phones Digital phones
Mobile phones
Pagers
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3. Even where we have identified the rightcore product to satisfy the need
competition can come in form of theactual (tangible product) and or theaugmented product. Branding comes
along to complicate the rules ofcompetition by unveiling the ground.
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LEVELS OF
COMPETITION
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1) SPECIFIC
The product faces competition from anexact equivalent. In classical, specific
competition the product may come fromthe same manufacturer.
Here the augmented product in terms of
ambience, customer care, promotions etcetera will be the basis of your reaction.
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Examples
Safaricom scratch cards
Mobile Phones
coke
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2. GENERIC
The product faces competition from closesubstitutes capable of satisfying the need
but not in exactly the same way. The strategy here would involve trying to
show your product as the best, if not all
the time at a particular time for a specific(substitute) need. Sampling can be a goodway to initiate new customers.
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Examples
Alcoholic drinks
Soft drinks
food
Transport
Clothing
EducationMSK Diploma
DiplomaUniversity degree
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3) TERTIARY COMPETITION In this form of competition the product
competes for the shilling in a potentialcustomers pocket. The idea is to ensure that thecustomer does not run out of your share of
his/her money by wasting it on the wrongthings. The product will thus have to impress thecustomer on how important it is .
Importance in the customers mind could bebecause the product is essential or a fad item orthe product develops an emotional relationship.Can you get the item to get on the regularshopping list.
Good marketing skills can work wonders.
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Examples of products fighting for
recognition
toothpicks
Air fresheners
serviettes
Wet wipes
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Examples of things that can sufferfrom wrong allocations
ClothingSchool fees
Rent
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PART 2
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PROFITABILITY.
In perfect competition, any abnormal profits cannot be sustained.
Prices gradually drop to an equilibrium pointwithin a given time and geographical area.
There is a high level of movement withincompanies folding up and new ones trying to
come in. Those who are able to survive usuallybecome Hardened
DEALING WITH COMPETITION IN
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DEALING WITH COMPETITION INA PC MODEL.
Augmented product Customer service, postsales follow up.
Location Ideal? Rent vs returns?
Opening, closing hours
Product variety
Backward, forward integration
Above the line promotion
Below the line promotionsThe ability to do a lot of promotion is usually
limited to the fact that margins not very high.