Page 89 - Foundations of Marketing

56 Part 1 | Strategic Marketing and Its Environment

Brand Competition
Coke and Pepsi compete
head-to-head in the soft-drink
market.

competition Other firms that
market products that are similar
to or can be substituted for a
firm’s products in the same
geographic area
brand competitors Firms that
market products with similar
features and benefits to the
same customers at similar © iStockphoto.com/powerofforever
prices
product competitors Firms that
compete in the same product
class but market products with
different features, benefits,
and prices
When just one or a few firms control supply, competitive factors exert a different sort of influ-
total budget competitors
Firms that compete for the ence on marketing activities than when many competitors exist.
limited financial resources of Broadly speaking, all firms compete with one another for customers’ dollars. More practi-
the same customers cally, however, a marketer generally defines competition as other firms that market products
that are similar to or can be substituted for its products in
the same geographic area. These competitors can be clas-
sified into one of four types. Brand competitors market
products with similar features and benefits to the same cus-
tomers at similar prices. For example, a thirsty, calorie-con-
scious customer may choose a diet soda such as Diet Coke
or Diet Pepsi from the soda machine. However, these sodas
face competition from other types of beverages. Product
competitors compete in the same product class but market
products with different features, benefits, and prices. The
thirsty dieter, for instance, might purchase iced tea, juice, a
sports beverage, or bottled water instead of a soda. Generic
competitors provide very different products that solve the
same problem or satisfy the same basic customer need.
Our dieter, for example, might simply have a glass of water
AP Images/PRNewsFoto/Princess Cruises get competitors compete for the limited financial resources
from the kitchen tap to satisfy his or her thirst. Total bud-

6
of the same customers. Total budget competitors for Diet
Coke, for example, might include gum, a newspaper, and
bananas. Although all four types of competition can affect
a firm’s marketing performance, brand competitors are the

products of these firms as direct substitutes for one another.
Competitive Structures most significant because buyers typically see the different
Consequently, marketers tend to concentrate environmental
The cruise ship industry is an example of an oligopoly. analyses on brand competitors.

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