It allows all of the advantages and disadvantages to be assessed and allows for room to make the product better. This creates more of an advantage for competing products as they know what needs to be improved and can make for a better product.
The strategic rationale of competitor profiling is powerfully simple. Superior knowledge of rivals offers a legitimate source of competitive advantage. The raw material of competitive advantage consists of offering superior customer value in the firm’s chosen market. The definitive characteristic of customer value is the adjective, superior. Customer value is defined relative to rival offerings making competitor knowledge an intrinsic component of corporate strategy. Profiling facilitates this strategic objective in three important ways. First, profiling can reveal strategic weaknesses in rivals that the firm may exploit. Second, the proactive stance of competitor profiling will allow the firm to anticipate the strategic response of their rivals to the firm’s planned strategies, the strategies of other competing firms, and changes in the environment. Third, this proactive knowledge will give the firms strategic agility. Offensive strategy can be implemented more quickly in order to exploit opportunities and capitalize on strengths. Similarly, defensive strategy can be employed more deftly in order to counter the threat of rival firms from exploiting the firm’s own weaknesses. Clearly, those firms practicing systematic and advanced competitor profiling have a significant advantage.
The Consumer Decision Making Process
The consumer market consists of all the individuals and households who buy or acquire goods and services for personal consumption. Consumers vary tremendously in age, income, education level, and tastes. Consumers are known to be problem solvers in any given situation the consumer decision making process involves a total of five steps, these include problem recognition, Information search, evaluation & selection, store choice and purchase and the final step post-purchase processes.
Problem recognition is the first stage in the consumer decision. It must occur before decision making can begin. It is the result of a discrepancy between a desired and an actual state. That is sufficient to arouse and activate the decision process. Marketing can help put consumers in a state of problem recognition and motivate them to start the decision process, leading them to acquire, consume, or dispose of a product or service.
The second stage Information search is where the buyer is determined to find more information on the product or service they are purchasing. The consumer can either do internal or external search. Internal search is the use of information from memory and external is the use of the internet etc. Marketers often associate their products or services with common positive experiences or images to increase their recall from consumer’s memory.
Evaluation and selection is the third stage in the consumer decision. This stage involves a consumer looking for the various features or desired characteristics of a product required to meet the consumers needs; features the consumer believes a product should have, such as a suitable price, brand or ingredient.
Store choice and purchase is the fourth stage in the consumer decision. This stage involves the consumer deciding where to purchase their desired product from and actually purchasing the product.
The final stage in the consumer decision is the post-purchase processes which is the stage of the buyer decision process in which the consumers take further action after the purchase based on their satisfaction or dissatisfaction. Cognitive dissonance is the discomfort or conflict caused by purchasing high risk products.
Consumer behaviour is important to satisfy the needs and wants of potential customers. In order to do this consumer behaviour needs to be studied in depth to understand the consumer’s wants and needs. It also plays a very important role in the success or failure of a product. If a consumer is satisfied from the product then his behaviour would be positive towards the product and if he is not satisfied from the product then his behaviour would be negative towards the product.
Apples brand took a major leap forward in public awareness; a leap that also helped with Apple’s other products. Apple has a history of zigging when the rest of the industry is zagging. The Apple brand has marketed itself to be fun, unique and memorable as it is such a departure to brands that are seen to be so serious and corporate. In 2007 Apple began advertising to consumers who hadn’t purchased the iPhone on how it works rather then focusing on the product itself; this advertising was a huge success for Apple as it encouraged non iPhone users to switch.
Segmentation
Market segmentation is the process of dividing the total market for a good or service into several smaller groups. All members in a group have similar factors that influence their demand for the particular product. Segmentation allows the firm to better understand the needs of their potential customers. The basis of market segmentation involves four stages which include geographic, demographic, psychographic and behavioural.
Geographic segmentation divides the market into different units such as the city size, urban/suburban/ rural population distribution and climate.
Demographic segmentation is the distribution of a population’s age, sex, income, stage in family cycle and ethnic background.
Psychographic segmentation buyers are divided into different groups such as personalities, life styles social class including activities, interests and opinions.
Behavioural segmentation buyers are grouped based on their actual behaviour towards the brand. For established brands, if marketing is about satisfying needs and wants and managing demand, then current behavior is good way of segmenting markets.
Segmentation is important as it enables marketers to identify and satisfy specific benefits sought by particular groups. It also divides the market into segments by separating marketing programs. The target market is also selected through market segmentation.
Through segmenting the market of iPods to teenagers, it makes it possible to predict the market segments for the iPhone. Due to the apple iPhone having access to music, games, communication and applications all in the one phone it brainwasher’s teenagers to purchase the iPhone. This is a example of how advertising can foist an inferior product on the consumer, as many smart phones have all the same features as the iPhone plus more, however Apple has taken over majority of the market due to its strong advertising.
Positioning
Positioning is a customer’s image or perception of a particular brand or company, relative to their perceptions of others in the same category. It can be in various forms, although it always incorporates a statement that identifies how a business wants its products or services to be perceived by the consumer. Positioning is assessed in relation to a competitor, according to a product class or attribute and by price and quality.
The importance of positioning a product is very important as it is the way the product is perceived by the customer. Everything to do with branding a product is about positioning. The colours of a product, the packaging, pricing, the advertising, where the product is sold and so on is all about enforcing Positioning.
When Nokia positions its brand in the crowded mobile phone marketplace, its message must clearly bring together the technology and human side of its offer in a powerful way. The specific message that is conveyed to consumers in every advertisement and market communication is "Only Nokia Human Technology enables you to get more out of life”. This gives customers a sense of trust by the company. Nokia has succeeded as it is now the number one brand in many markets around the world; however Nokia has not released out a new phone with the features that many other brands have released and it still has managed to stay on top of the market. This shows how through its use of strong advertising it has managed to stay on top of the market to date. The apple iPhone has also been a huge success in positioning their product in the market through their advertising on the iPhone applications.
Relationships between key concepts above
Competitor analysis, the consumer decision making process, segmentation and positioning are all related in the marketing industry. Their relation is through the way a product or service is marketed in the industry. All of the key concepts show how advertising can foist an inferior product on the consumer. Many smart phones have all the same features though Apple is most successful as they have advertised more sufficiently to the consumer market, this shows how advertising can brain wash people into believing they need a smart phone.
Conclusively, it can be stated that, through skilled advertising and marketing an inferior product can be foisted onto a consumer. Through the explanation of the competitor analysis, the consumer decision process, segmentation, positioning and the relationship between these concepts; it can be seen that the superior product is not always the best selling. Marketing and advertising plays a major role in sales and when a brand develops their skills in these areas and understands their consumers’ minds and needs, the selling of any product is possible.
Reference List
Website List:
- ‘The Product Life Cycle’ n.d. Available:
. Accessed on April 1st 2011.
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‘Market Segmentation’ n.d. Available: . Accessed on April 1st 2011.
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‘Positioning’ n.d. Available: . Accessed on April 3rd 2011.
Books:
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Pride, W, Rundle-Thiele, S, Waller, D, Elliot, G, Paladino, A 2007, Marketing, Asia-Pacific Edition. John Wiley & Sons, Brisbane.
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Grossman, GM, Helpman, E 1993, Innovation and growth in the global economy, 2nd ed. MIT Press, London.
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Rix, P 2007, Marketing a Practical Approach, 6th ed. McGraw Hill, North Ryde NSW.
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, , 2008, Consumer Behaviour, Cengage education, USA
Journal Articles:
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Reading 3.2 James, D. 2000, ‘The free-trade fantasy’, Business Review Weekly, 17 December, pp. 44-48. Accessed March 31, 2011.
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Reading 3.3 Ayodele, T. 2003, ‘Subsidies underline WTO hypocrisy’, Australian Financial Review, 30 December, p. 47. Accessed March 31, 2011.
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Reading 3.4 Legrain, P. 2001, ‘WTO is a friend of the poor’, The Age, 4 August, p. 7. Accessed March 19, 2011.
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Reading 3.5 Hong, X. 2001, ‘What will WTO bring to China?’, Sunday Times,
1 April, p. 51. Accessed April 2, 2011.
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Reading 3.1 James, D. 2000, ‘The end of trade’, Business Review Weekly, 25 August,
pp. 88-90. Accessed April 2, 2011.
