T E C H N O P R E N E U R S H I P 1 0 1

SANDER T. SEDANO, MIT

Stepping Ahead in a Competitive Market
REVIEW

Stepping Ahead in a Competitive Market

Low Cost Leader Reliability Champion Feature King

REVIEW

Comparative Advantage

• Company's capacity to manufacture or produce a good

or service more efficiently than its competitors, resulting
in higher profit margins.
• If two perfect alternatives are offered to rational
buyers, the cheaper of the two will be chosen.
• Does not imply a superior product or service.

- A business can provide a comparable product or

service at a lesser cost.
REVIEW

Diff erential Advantage

• Products or services are perceived as superior to those

of its competitors, it is said to have a differential
advantage. A differential advantage is driven by
advanced technology, patent-protected products or
processes, exceptional staff, and strong brand identity.
REVIEW

Critical Components in
Building Competitive Advantage

Customer
Knowledge Cost Innovation Partnership
Exp
 PONDER

Knowing your Market Competitors

1. Sander is not bothered. Is there a need for him to know his competitors? Why?
2. Once the competitors are already operational, what do you think can be best done
by Sander?

SIMPLE CASE ANALYSIS:

San Hardware was established in Tuao, Cagayan, in the year 1990. Ever since,
it was the only hardware present in the municipality. This year, two new
hardware businesses are entering the municipality. Sander, the proprietor of
San Hardware, is not threatened because he is confident that their customers
will remain loyal and that the prices of their products are competitive.
 Knowing your Market Competitors
1. Sander is not bothered. Do you think there is no need for him to know his
competitors? Why?
2. Once the competitors are already operational, what do you think can be best done
by Sander?

1. You are given 10 minutes to respond to the 2 questions.

Time starts once the teacher ends discussing the
mechanics of the learning task.
Knowing your Market Competitors

What is the importance of knowing your competitors?

• Knowing and understanding your competitors is

essential to developing a successful marketing strategy.
• Suppose you don't know your competitors’ strengths and
weaknesses; another business will most likely enter the
scene and offer a competitive advantage, such as
reduced prices or value-added features.
Knowing your Market Competitors

• Market competition pushes businesses to use and

maximize the four components of the marketing mix,
commonly known as the four P's, to improve sales
volume.
• Product
• Place
• Promotion
• Price
 Class Pulse and Polls

1. Who do you think is the strongest competitor of

Jollibee?
a. McDonalds
b. Chowking
c. Mang Inasal
d. Pampanga’s Best
 Class Pulse and Polls

1. Do you think Pampanga’s Best products

can b considered a competitor of
McDonalds?
a. YES
b. NO
 Types of Competitors

Replacement
Direct Competitor Indirect Competitor
Competitor

• Sells the same products or offers the same service and works
1. Businesses that supply a product or service in the same category as you
toward the same goal.
are •different enough to substitute for your product
They profit from the same activities as you. or service are indirect
competitors.
• When you think of competition, the first thing that generally springs
to mind is a direct competitor.
• McDonald’s and Burger King are direct competitors.
 Types of Competitors

Replacement
Direct Competitor Indirect Competitor
Competitor

• Businesses that supply a product or service in the same category as

1. Businesses that supply a product or service in the same category as you
you are different enough to substitute for your product or service
are •different enough to substitute for your product or service are indirect
McDonald’s and Mang Inasal are examples of indirect competitors.
competitors.
 Types of Competitors

Replacement
Direct Competitor Indirect Competitor
Competitor

• Sometimes known as phantom competitors

1. Businesses that supply a product or service in the same category as you
• They are businesses that supply a product or service different from
are different enough to substitute for your product or service are
yours in terms of category and type, but your customers may spendindirect
competitors.
their money instead.
• Some frozen goods of Pampanga’s Best is considered a replacement
competitor of McDonald’s.
Product Diff erentiation and Product Positioning

• Product differentiation and positioning are critical components

of every marketing strategy, and most marketing approaches
employ both.
• Both are particularly important in markets where a product has
several competitors.
 Product Diff erentiation

• Company's marketing approach for

distinguishing its product or service from all
other products or services on the market.
• Allows items to stand out from the competition,
providing distinctive value and making them
more appealing to buyers.
 Product Positioning

• Past marketing efforts and actions, such as

market segmentation, target marketing, and
product differentiation, have led to product
positioning.
• Refers to a product's position in customers’
eyes compared to other competing items in
the targeted market or segment.
 Product Positioning

• Expresses how the business wants its customers to

perceive the product or service. It covers the
feelings, attitudes, and impressions that current and
potential customers should have regarding its
products.
 Product Differentiation Product Positioning

MEANING

The strategy was utilized to find the features

A strategy for instilling in the minds of
of the items that set them apart from the
consumers a specific image of the product.
competition.
OBJECTIVE

Encourage customers to choose your items Determine how consumers feel about your
over those of competitors. items and how they engage with them.

SPECIFIC TO
Specific to customers to influence their
Specific to the product or service.
perceptions.
BASED ON
Features, quality, benefits, or uniqueness of
Promotional aspects of the product
the product
 Product Positioning

• Differentiation and positioning are two closely related

components that play a critical role in a marketing
strategy.
• Despite their distinctions, they both have the same
goal and are closely related because a product or
service is positioned based on its unique
characteristics or traits.
• Differentiation is only deemed effective when it
establishes a strong position for the product being
Market Structures

• In economics, market structure refers to how

different industries are classified and
distinguished based on the degree and form of
products and service competition.
• It pertains to the various market characteristics
that affect how businesses interact with one
another and with customers.
 Market Structures

DEFINING CHARACTERISTICS OF A MARKET STRUCTURE

• The type of product or commodity sold and the degree of
product differentiation.
• The ease or difficulty with which one can enter and depart
the market.
• The largest companies' market share distribution.
• The total number of businesses on the market.
• The number of customers and how they collaborate or work
against sellers to determine pricing and quantity.
• The businesses relationship.
Four Types of Market Structures
Perfect or Pure Competition

• Large Number of firms

• Homogeneous products
• Easy entry/ exit
• No market power
• Price Taker
• Perfect information
• Examples- Agriculture (Rice and Corn)
Monopolistic Competition

• Large Number of Firms

• Similar but Differentiated Products
• Low Barriers to Entry
• Market Power
• Limited
• Examples (Restaurant, Hotels)
Oligopoly

• Few Large Firms

• Standardized or Differentiated Products
• Significant Barriers to Entry
• Market Power
• Interdependent
• Examples (Steel, Oil, Automobiles)
Monopoly

• One Firm
• Unique Product
• Blocked Entry
• Market Power
• Price Maker
• Example- Local Utilities
 The Beachhead Strategy

• Is based on the military tactic of capturing a small border sector and

turning it into a stronghold to push into the remainder of the territory.
• A beachhead is a name given to the small border territory.
• In business, the goal is to concentrate your resources on a small
market area (such as a product category or a smaller market
segment) and transform it into a stronghold before moving on to
larger markets or product categories.
• A business can use the beachhead strategy to dominate small areas
from which it can expand and dominate the rest of the market.
 The Beachhead Market

• A small market with specific qualities that make it an attractive target

for introducing a new product or service.
• The market is chosen based on the compatibility of the available
resources, the product, and the market itself.
• The market should assist the business in achieving specific objectives
that will allow it to progress from its infancy to winning other markets.