Principles of Marketing
Kotler and Armstrong

Chapter 18:
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Creating Competitive
Advantage

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Creating Competitive Advantage

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Creating Competitive Advantage
Learning Objectives
• Objective 1: Discuss the need to understand competitors as well as customers through competitor analysis.
• Objective 2: Explain the fundamentals of competitive marketing strategies based on creating value for customers.
• Objective 3: Illustrate the need for balancing customer and competitor orientations in becoming a truly market-centered organization.
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Creating Competitive Advantage
Learning Objective 1
• Discuss the need to understand competitors as well as customers through competitor analysis.
Competitor Analysis

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Creating Competitive Advantage
• Competitive advantages require delivering more value and satisfaction to target consumers than competitors.
• Competitive marketing strategies are how companies analyze their competitors and develop value-based strategies for profitable customer relationships.

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Competitor Analysis
Competitor analysis is the process of identifying, assessing, and selecting key competitors.

FIGURE | 18.1

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Competitor Analysis
Identifying Competitors

Competitors can include:
• All firms making the same product or class of products • All firms making products that supply the same service
• All firms competing for the same consumer dollars Copyright © 2016 Pearson Education, Inc.

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Competitor Analysis
Assessing Competitors

Competitors’ objectives
Profitability
Market share growth
Cash flow
Technological
leadership
• Service leadership
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Competitors’ strategies
• Strategic group offers the strongest competition Copyright © 2016 Pearson Education, Inc.

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Competitor Analysis
Assessing Competitors

Competitors’ strengths and weaknesses • What can our competitors do?
• Benchmarking

Estimating competitors’ reactions
• What will our competitors do?

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Competitor Analysis
Selecting Competitors to Attack and Avoid
Customer value analysis determines the benefits that target customers’ value and how customers rate the relative value of various competitors’ offers. • Identification of major attributes that customers value and the importance of these values
• Assessment of the company’s and competitors’ performance on the valued attributes
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Competitor Analysis
Selecting Competitors to Attack and Avoid
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Close or distant competitors
Good or bad competitors

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Competitor Analysis
Selecting Competitors to Attack and Avoid
Finding Uncontested Market Spaces

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Competitor Analysis
Designing a Competitive Intelligence System

• Identifies competitive information and the best sources of this information
• Continually collects information
• Checks information for validity and reliability
• Interprets information
• Organizes information
• Sends key information to relevant decision makers
• Responds to inquiries about competitors

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Creating Competitive Advantage
Learning Objective 1
• Discuss the need to understand competitors as well as customers through competitor analysis.

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Creating Competitive Advantage
Learning Objective 2
• Explain the fundamentals of competitive marketing strategies based on creating value for customers.
Competitive Strategies

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Competitor Strategies
Approaches to Marketing Strategy

Entrepreneurial marketing involves visualizing an opportunity and