- [Instructor] This is part three
of the Customers and Competitors lecture,
and we're gonna finish it up by talking about competitors.
I think it's important to see competition
as having a very broad definition,
that it's an alternative way
that someone could satisfy a need or want,
or it's even an alternative way
that they might be spending money.
It might be simply the opportunity cost
of not buying your product or service.
It's very important to note that,
especially with this sort of broad definition,
no firm has no competitors.
Every firm, every organization has competitors,
if for no other reason
that if they don't spend their money on you,
they're gonna spend it somewhere else or even save it.
And so it's important to know
what are the competing interests here
or who are the competing businesses or organizations here,
and to understand what are their strengths and weaknesses,
which will give you the best sense of how you can compete
and be successful and fulfill the mission of your business
or organization.
I want to walk you through the competition continuum.
So every potential competitor
may fall into one of these four slots.
And you can see at the top,
they're competing the least directly with you
and at the bottom, the most directly.
So the first one is total budget,
which would fill a completely different need or want,
but still competes for the customers resources.
The second one is generic,
which fills a very similar need or want,
or solves a very similar problem,
but with a very different product or service.
Product competition, the third one,
is the same general product class,
but it has very different features and prices and so forth.
And finally brand competition.
It is a very similar product with very similar features
and price and you're really competing head to head.
An example might be helpful.
So look at the competitors for a Toyota Prius Hybrid.
So the total budget might be something like
pay down debt or go on vacation,
just spending some money someplace else.
The generic is provides transportation, but it isn't a car.
It might be a bus, a bus pass, bicycle
or something like that.
It's product competitors would be cars,
but ones that are not the same type of car,
with different features and prices,
so something like a minivan or an SUV.
And the brand competitor for a Prius
might be something like a hybrid, a Honda Civic Hybrid,
which is a very, very similar car.
During our discussion, I would like you to think about
who are CDAE's competitors,
and we'll brainstorm out some of the ones
for each of these four categories.
So it's important to monitor the competition,
especially those at the lower or the more direct-like brand.
So you will want to sort of run them through the five Cs.
Their company, who are their competitors,
who are their customers, who are their collaborators,
and what's the external climate that's relevant to them.
You want to ask yourself, how are they performing?
What is their competitive advantage in the marketplace?
What do they do better than you?
What do they do not as well as you?
And what does that tell you
about how you can compete against them?
So the more direct competitors are probably facing
many of the same opportunities and threats as you,
maybe not all, but so you really want to pay attention
to what are their strengths and what are their weaknesses.
The way that you do this is to observe them.
In many cases, read reports or databases,
as well as talk to suppliers and buyers of them.
So here is the homework that's due on Tuesday of next week,
based on this week's material, Customers and Competitors.
So I want you to think about a potential customer
for your business.
Think about the degree of involvement
that they will have and why.
What are some socio-cultural groups or sub cultures
that you think are going to be interested in your product
or service and why?
And what are some of the key situational influences?
How and when are your customers going to buy and why?
Then in part two, who are two or three main competitors?
Where do they fall on the competition continuum?
And finally, how do their and your respective strengths
and weaknesses create opportunity for you?
Don't forget to do the assessment on Blackboard
before class starts.
Here is a recap of what we did.
We walked through the purchase decision process.
These three types of influence.
We touched briefly on both the B2B and the competitors.
And as a heads up, next week,
we're gonna do market segmentation,
targeting and positioning.
See you in class.