1 00:00:03,070 --> 00:00:04,400 - [Instructor] This is part three 2 00:00:04,400 --> 00:00:09,003 of the Customers and Competitors lecture, 3 00:00:11,490 --> 00:00:16,303 and we're gonna finish it up by talking about competitors. 4 00:00:20,490 --> 00:00:23,680 I think it's important to see competition 5 00:00:25,298 --> 00:00:29,010 as having a very broad definition, 6 00:00:29,010 --> 00:00:32,380 that it's an alternative way 7 00:00:32,380 --> 00:00:37,380 that someone could satisfy a need or want, 8 00:00:39,260 --> 00:00:41,310 or it's even an alternative way 9 00:00:41,310 --> 00:00:43,420 that they might be spending money. 10 00:00:43,420 --> 00:00:46,620 It might be simply the opportunity cost 11 00:00:46,620 --> 00:00:51,620 of not buying your product or service. 12 00:00:52,450 --> 00:00:54,340 It's very important to note that, 13 00:00:54,340 --> 00:00:57,620 especially with this sort of broad definition, 14 00:00:57,620 --> 00:01:00,710 no firm has no competitors. 15 00:01:00,710 --> 00:01:05,710 Every firm, every organization has competitors, 16 00:01:07,420 --> 00:01:09,300 if for no other reason 17 00:01:09,300 --> 00:01:11,490 that if they don't spend their money on you, 18 00:01:11,490 --> 00:01:14,433 they're gonna spend it somewhere else or even save it. 19 00:01:15,370 --> 00:01:17,210 And so it's important to know 20 00:01:17,210 --> 00:01:20,980 what are the competing interests here 21 00:01:20,980 --> 00:01:25,350 or who are the competing businesses or organizations here, 22 00:01:25,350 --> 00:01:28,960 and to understand what are their strengths and weaknesses, 23 00:01:28,960 --> 00:01:33,940 which will give you the best sense of how you can compete 24 00:01:33,940 --> 00:01:38,940 and be successful and fulfill the mission of your business 25 00:01:38,960 --> 00:01:39,943 or organization. 26 00:01:44,060 --> 00:01:48,290 I want to walk you through the competition continuum. 27 00:01:48,290 --> 00:01:53,020 So every potential competitor 28 00:01:53,020 --> 00:01:56,340 may fall into one of these four slots. 29 00:01:56,340 --> 00:01:58,340 And you can see at the top, 30 00:01:58,340 --> 00:02:03,160 they're competing the least directly with you 31 00:02:03,160 --> 00:02:06,060 and at the bottom, the most directly. 32 00:02:06,060 --> 00:02:09,130 So the first one is total budget, 33 00:02:09,130 --> 00:02:14,130 which would fill a completely different need or want, 34 00:02:14,210 --> 00:02:19,210 but still competes for the customers resources. 35 00:02:20,860 --> 00:02:24,117 The second one is generic, 36 00:02:24,117 --> 00:02:28,030 which fills a very similar need or want, 37 00:02:28,030 --> 00:02:31,080 or solves a very similar problem, 38 00:02:31,080 --> 00:02:34,303 but with a very different product or service. 39 00:02:35,680 --> 00:02:38,820 Product competition, the third one, 40 00:02:38,820 --> 00:02:41,810 is the same general product class, 41 00:02:41,810 --> 00:02:46,610 but it has very different features and prices and so forth. 42 00:02:46,610 --> 00:02:50,080 And finally brand competition. 43 00:02:50,080 --> 00:02:54,880 It is a very similar product with very similar features 44 00:02:54,880 --> 00:02:58,273 and price and you're really competing head to head. 45 00:03:03,440 --> 00:03:05,620 An example might be helpful. 46 00:03:05,620 --> 00:03:10,620 So look at the competitors for a Toyota Prius Hybrid. 47 00:03:12,430 --> 00:03:16,800 So the total budget might be something like 48 00:03:16,800 --> 00:03:19,560 pay down debt or go on vacation, 49 00:03:19,560 --> 00:03:23,363 just spending some money someplace else. 50 00:03:26,220 --> 00:03:31,220 The generic is provides transportation, but it isn't a car. 51 00:03:33,220 --> 00:03:38,010 It might be a bus, a bus pass, bicycle 52 00:03:38,010 --> 00:03:40,133 or something like that. 53 00:03:41,550 --> 00:03:44,930 It's product competitors would be cars, 54 00:03:44,930 --> 00:03:48,770 but ones that are not the same type of car, 55 00:03:48,770 --> 00:03:53,390 with different features and prices, 56 00:03:53,390 --> 00:03:57,940 so something like a minivan or an SUV. 57 00:03:57,940 --> 00:04:02,760 And the brand competitor for a Prius 58 00:04:02,760 --> 00:04:06,500 might be something like a hybrid, a Honda Civic Hybrid, 59 00:04:06,500 --> 00:04:11,333 which is a very, very similar car. 60 00:04:14,520 --> 00:04:19,520 During our discussion, I would like you to think about 61 00:04:19,720 --> 00:04:23,210 who are CDAE's competitors, 62 00:04:23,210 --> 00:04:26,410 and we'll brainstorm out some of the ones 63 00:04:26,410 --> 00:04:29,913 for each of these four categories. 64 00:04:35,950 --> 00:04:40,800 So it's important to monitor the competition, 65 00:04:40,800 --> 00:04:45,800 especially those at the lower or the more direct-like brand. 66 00:04:47,550 --> 00:04:52,070 So you will want to sort of run them through the five Cs. 67 00:04:52,070 --> 00:04:54,700 Their company, who are their competitors, 68 00:04:54,700 --> 00:04:58,670 who are their customers, who are their collaborators, 69 00:04:58,670 --> 00:05:03,383 and what's the external climate that's relevant to them. 70 00:05:08,530 --> 00:05:13,530 You want to ask yourself, how are they performing? 71 00:05:13,640 --> 00:05:18,523 What is their competitive advantage in the marketplace? 72 00:05:20,690 --> 00:05:23,010 What do they do better than you? 73 00:05:23,010 --> 00:05:26,320 What do they do not as well as you? 74 00:05:26,320 --> 00:05:28,400 And what does that tell you 75 00:05:28,400 --> 00:05:30,973 about how you can compete against them? 76 00:05:32,100 --> 00:05:37,100 So the more direct competitors are probably facing 77 00:05:39,980 --> 00:05:43,040 many of the same opportunities and threats as you, 78 00:05:43,040 --> 00:05:46,230 maybe not all, but so you really want to pay attention 79 00:05:46,230 --> 00:05:51,220 to what are their strengths and what are their weaknesses. 80 00:05:51,220 --> 00:05:54,370 The way that you do this is to observe them. 81 00:05:54,370 --> 00:05:58,500 In many cases, read reports or databases, 82 00:05:58,500 --> 00:06:02,283 as well as talk to suppliers and buyers of them. 83 00:06:06,120 --> 00:06:11,120 So here is the homework that's due on Tuesday of next week, 84 00:06:13,680 --> 00:06:18,680 based on this week's material, Customers and Competitors. 85 00:06:19,980 --> 00:06:23,480 So I want you to think about a potential customer 86 00:06:23,480 --> 00:06:26,100 for your business. 87 00:06:26,100 --> 00:06:28,630 Think about the degree of involvement 88 00:06:28,630 --> 00:06:31,760 that they will have and why. 89 00:06:31,760 --> 00:06:36,470 What are some socio-cultural groups or sub cultures 90 00:06:36,470 --> 00:06:41,470 that you think are going to be interested in your product 91 00:06:42,000 --> 00:06:43,280 or service and why? 92 00:06:43,280 --> 00:06:47,080 And what are some of the key situational influences? 93 00:06:47,080 --> 00:06:51,653 How and when are your customers going to buy and why? 94 00:06:56,020 --> 00:07:01,020 Then in part two, who are two or three main competitors? 95 00:07:01,460 --> 00:07:05,440 Where do they fall on the competition continuum? 96 00:07:05,440 --> 00:07:10,440 And finally, how do their and your respective strengths 97 00:07:11,090 --> 00:07:14,573 and weaknesses create opportunity for you? 98 00:07:18,120 --> 00:07:21,760 Don't forget to do the assessment on Blackboard 99 00:07:21,760 --> 00:07:23,553 before class starts. 100 00:07:27,010 --> 00:07:29,960 Here is a recap of what we did. 101 00:07:29,960 --> 00:07:33,530 We walked through the purchase decision process. 102 00:07:33,530 --> 00:07:36,250 These three types of influence. 103 00:07:36,250 --> 00:07:41,250 We touched briefly on both the B2B and the competitors. 104 00:07:44,140 --> 00:07:46,360 And as a heads up, next week, 105 00:07:46,360 --> 00:07:48,880 we're gonna do market segmentation, 106 00:07:48,880 --> 00:07:51,633 targeting and positioning. 107 00:07:52,720 --> 00:07:53,893 See you in class.