Week 4: COMPETITOR ANALYSIS

This week was especially interesting.  We moved into discussion on Market Potential, Market Demand, and Forecasting.   When we think about Market competition, many managers simply look at product form and product category competition.   Managers compare their products to other products that are the same and the also look at the category of goods.  This leaves out many other potential forms of competition though.  Managers should take a broader approach to defining the competition for a product’s good.  Simply put, If a product can be substituted for your product (whether it’s similar or not, or whether it’s in the same category or not) then it should be viewed as competition. 

Here’s a practical application of what I’m talking about.  Let’s say that your company is called Florida Sweet Cane and  you produce sugar.  Your competition aren’t just the other companies that produce Sugar in Fl, but your competition is also the companies that produce sugar out side of the state and makes its way into Florida.  Furthermore, your competition is also the producers of Honey, corn syrup, and low fat sweeteners such as Splenda.  This is because all of these producers can take away customers and pieces of the market away from your company. 

PharmaSim:  In class we discussed our Pharmasim simulations.  The teacher asked a very basic question, “What is our mission?”  As predicted, a few students had a concept of a company mission that was too narrow.  Missions are broad and should encompass what the company is trying to do.  Sell ‘x’ product.  Target ‘x’ population.  Market visions are when the managers should begin to narrow their focus.

            From the reading, Lehmann and Winer believe that one of the most underutilized sources of information in companies is the sales force, but I think a lot of that has changed.  Companies have become very efficient and marketing conscious recently.  I believe that most companies are using their sales force to submit data and analysis on a regular basis.  Salesmen now travel around with laptops.   They input data as soon as they get back to their car about who they sold to (and all of the demographics that made up the customer), what they sold, when they sold it and where they sold it.  Some of the salesmen actually come with laptop in hand to the site of the transaction.  I think the industrialized world has grown savvy to Lehmann’s and Winer’s theories.

During class, we once again refereed to the five C’s.  The five C’s are Customers, Competitors, Collaborators, Company (internal analysis), and Context.  Note, that Company is the only ‘C’ that has internal analysis.  The other 4 ‘C’s all rely on external analysis.  When it comes to marketing, all five ‘C’s should be engaged to develop the best marketing plan.

My favorite part of the reading was in chapter four when Lehman and Winer talked about reverse engineering as a way to conduct competitor analysis.  Reverse engineering is when a company purchases a competitor’s product and takes it apart so that the company can assess the product’s strengths and weaknesses.  It is wise to become a customer of a competitor.  This is especially true in my military profession.  Enemy military forces are always trying to get their hands on America’s weapons systems to see if they can reverse engineer them.  This is why pilots are trained and equipped to disable or destroy their aircraft if they crash behind enemy lines.  Reverse engineering has been known to the military for centuries, it’s about time the marketing world caught up.

Questions from classmates: In the discussion board, Daniel asked; “Throughout Lehmann and Drucker, there is a lot of discussion about both assessing competitive threats and assessing perception of customer value.  Which of these two approaches (if one) is the higher priority and why?”

I would say that assessing perception of customer value is the higher priority.  Focusing on the competition can make you forget to pay attention to your own product.  By focusing on customer perception forces you re-evaluate your product constantly and to make it better.  Oddly enough, this question was also picked by the professor to speak on.  And of course, he agreed with me!

Megan asked a question that was very important.  Megan asked: “Is it possible for a company to know all of their competitors without spending too much time and money that could be better used in other areas (such as R&D)?”  I think she is spot on with these questions.  There is no way to know ALL of your competitors without spending too much time focusing on them.  I have spoken about this on my blog at least twice.  In my opinion, companies should focus on their biggest competitors, and ensure the company is spending the majority of time on their own product and their own customers.  If the company is big enough, they can just buy out the smaller competition’s product (like Apple does) as they spring up.

 

Student Blogs: I read a couple of student blogs this week that posted before mine (obviously).  Megan’s caught my attention.  Her comments on the articles from this week were practically the same takeaways that I had.  Basically, companies should do a little research on competitors, but more important is the CUSTOMER. 

 

             

Week 3: The Customer Decides Value!

This week's blog is a little all over the place.  The most important thing I learned from the lecture this week is that Marketing managers should understand the market and understand how value feeds into the market place.  The need to figure out what value consumers and customers want. 

“Drucker teaches us that The customer decides value and that marketers, but in a depression or down period, companies will fight for their products or services to stay with how the define it verse allowing learning it from customers definition…

Are marketers now more open minded with how the customer defines their product or service verse how the marketers would define it?

I believe that e/thing is budget driven vs quality driven.  Quality = giving the customer what they desire.  Budget = producing what the company can afford to make.

Education Portals and class:

One of the biggest mistakes made in marketing planning is that the focus is put on the product or service, but not the market that the product is being sold to. Companies should always focus is on the market.  ID market segments and focus on that segment that you’re going to pursue.

The educational portal that I focused on the most centered around what is a marketing strategy.  External factors influence marketing strategy

SLEPT Theory

1. Social

2. Legal

3. Economical

4. Political

5. Technological. 

And a 6^th one would be competition. 

A lot of these factors and characteristics that are external influences on the marketing strategy seem like common sense to me.  Think about the legal ramifications of marketing alcohol to minors.  In the end, businessnes need to adapt to external influences that can affect the company’s goals.

 1. Classmate’s question: In the education portal video titled "establishing a market research project" it discussed the major advantages of conducting a market research project: improving quality of decision-making, tracing problems, keeping current customers happy, and having an update on the current market. What about making sure that your organization is keeping up with the competition? Wouldn't you want to do market research to find out what advantages your competition has over you in order to begin marketing new projects which would bring those customers to your business instead?

This question is one that I had been contemplating as well.  My answer would be that businesses need to worry about their own ‘house’ first.  Competition is assuredly something to be worried about, but if the quality of the product/service that your business is offering isn’t’ meeting YOUR customer’s needs, then your marketing strategy to steal another’s customers won’t matter.

 2. Classmate’s question: When we look at SLEPT, do some influences carry more weight than others or is this dependent on the organization and industry marketers work in?

 Yes, some factors absolutely carry more weight than others and it is all dependent on the business’ marketing environment.  For example, a fast food business in California has more legal and political obligations than a fast food restaurant in Georgia does.  California restricts specific aspects of the food industry like how many calories can a meal have that also includes a toy?  Basically this was aimed at McDonalds in an attempt to lessen the calories of Happy Meals.

One of my classmate’s blogs that I would like to comment on is Briana’s blog.  She hit on some key points about certain statistics in the Phramasim module. After playing with the simulation and purchasing all of the reports, she saw that the Talley came up to $440K.  I like this aspect of pharmasim.  It can be very realistic.  The cost of information is high, but very necessary.  Pharmasim is a great tool.

Tune in Next Week!

Week 2: The Marketing Plan

This week focused on how important Market plans are to every business.  Developing a Marketing plan is often times the most important activity that a CEO will conduct during the year. 

“A marketing plan is a written document containing the guidelines for the business center’s marketing programs and allocations over the planning period” (Lieman and Winer, 1).

For the purposes of this blog, I will direct the concepts that I learn throughout the week towards the legal field.  I will not be the CEO of a company (at least not right now), instead I am earning an MBA to assist in client relations in the field of Business Law.  Marketing planning is a tough concept for most traditional law firms because the typical law firm does not advertise.  Since advertisement is not included in the marketing plan for my law firm, then we have to find other ways to expose our services and work product to the market.

 

This week, I learned that the marketing plan is an operational document and it usually begins at a high level of an organization.  My organization is an 8 person law firm.  The Managing Partner is the strategic marketing planner.  He has a heavy burden because he needs to promote the law firm’s services, while remaining true to a traditional firm’s standards.

 

Now, be careful.  In the previous sentence I made a huge error by grouping Marking and advertising together.  This may be wrong, but the truth is most companies still do it.  For clarification, let me try to differentiate between Selling and Marketing.  “Selling focuses on the needs of the Seller and the need to convert products to cash, while Marketing focuses on the needs of the buyer and the need to satisfy the customer.”  So in truth, even I was a little confused at first.  Based on this definition, when the managing partner writes policy about how to treat clients and how to handle client files, that is marketing.  

 

I’ve watched the managing partner strategically price hourly rates for the senior partners, associates and paralegals at competitive rates with the market.  My firm routinely takes clients to golf tournaments and dinners.  The managing partner regularly attends City and State dinners held by the Mayor and Governor. Also, my firm treats each client exceptionally well.  All of these actions constitute marketing for a firm.  I do not know if there is a ‘plan’ written down anywhere, but I am 100% positive that all of these actions are carefully considered and planned by the Managing partner before they are undertaken.  There is a cost associated with marketing plans so each action should lead to some profit in the long term.

 

Another important concept that I learned and discussed this week was Drucker’s view marketing.  As I was reading Chapters 4 and 5 in the book, ‘Drucker on Marketing’ by William A. Cohen, I couldn’t help but feel like I was being lectured by my boss.  Some of these same principals were uttered to me before and I wonder if he’s read this book (or an earlier version or may one of Drucker’s own papers).  Drucker believed that marketing was a commitment that had to be undertaken by everyone in the organization that has anything to do with customers.  This echoes my boss’ lectures on how everyone needs to address clients and how client’s files should be handled with the utmost care.  Drucker came up with the “5 Most Important Questions you Will Ever Ask About Your Organization.” 

1. What is our mission?

2. Who is our customer?

3. What does our customer value?

4. What are our results?

5. What is our plan?

 

Once a company can effectively answer these questions, they have started their marketing plan.  I think this is a good place to stop and try to understand how our company that we are currently involved in would answer these 5 questions.  If you've read this far in my blog, try to answer these questions in the comments section.  Thanks.  See you next week!