Perreault−McCarthy: Basic
Marketing: A
Global−Managerial
Approach, 14/e- Evaluating Opportunities
in the Changing Marketing
Environment
Text © The McGraw−Hill
Companies, 2002102 Chapter 4
figures out a way to provide customers with superior value. Then, sales may disap-
pear before the pioneer even knows what’s happened.
Finding a sustainable competitive advantage requires special attention to com-
petitor strengths and weaknesses. For example, it is very difficult to dislodge a firm
that is already a market leader simply by attacking with a similar strategy. The leader
can usually defend its position by quickly copying the best parts of what a new com-
petitor is trying to do. On the other hand, an established competitor may not be able
to defend quickly if it is attacked where it is weak. For example, Right Guard deodor-
ant built its strong position with an aerosol spray dispenser. But many consumers
don’t like the messy aerosol cloud; that weakness provided Old Spice with an oppor-
tunity for a deodorant in a pump dispenser. Right Guard did not quickly fight back
with its own pump because that could have hurt sales of its established product.^11In a competitor analysis, you also consider competitive barriers—the conditions
that may make it difficult, or even impossible, for a firm to compete in a market.
Such barriers may limit your own plans or, alternatively, block competitors’
responses to an innovative strategy.
For example, Exhibit 4-2 summarizes a competitor analysis in the Japanese mar-
ket for disposable diapers. P&G was about to replace its original Pampers, which
were selling poorly, with a new version that offered improved fit and better
absorbency. Kao and Uni-Charm, the two leading Japanese producers, both had bet-
ter distribution networks. Kao also had a better computer system to handle reorders.
This was crucial because most Japanese grocery stores and drugstores are very
small—about 150 square feet. Shelf space is limited and frequent restocking
by wholesalers is critical. So getting cooperation in the channel was a potentialExhibit 4-2 Competitor Analysis (summary): Disposable Diaper Competition in Japan
P&G’s Current and Kao’s Strengths () Uni-Charm’s Strengths ()
Planned Strategy and Weaknesses () and Weaknesses ()Target Upscale, modern parents who Same as for P&G Same as for P&G, but also
Market(s) can afford disposable diapers budget-conscious segment that
includes cloth diaper users ()
Product Improved fit and absorbency (); Brand familiarity (), but no Two brands—for different
brand name imagery weak in longer the best performance () market segments—and more
Japan () convenient package with
handles ()
Place Distribution through independent Close relations with and control Distribution through 80% of
wholesalers to both food stores over wholesalers who carry only food stores in best locations ();
and drugstores (), but handled Kao products (); computerized shelf space for two brands ()
by fewer retailers () inventory reorder system ()
Promotion Heaviest spending on daytime Large efficient sales force (); Advertising spending high ();
TV, heavy sales promotion, lowest advertising spending () effective ads that appeal to
including free samples (); and out-of-date ad claims () Japanese mothers ()
small sales force ()
Price High retail price (), but lower Highest retail price (), but also Lowest available retail price ();
unit price for larger quantities () best margins for wholesalers price of premium brand
and retailers () comparable to P&G ()
(Potential) Patent protection (), limits in Inferior product (), excellent Economies of scale and lower
Competitive access to retail shelf space () logistics support system () costs (); loyal customers ()
Barriers
Likely Improve wholesaler and retailer Press retailers to increase Increase short-term sales
Response(s) margins; faster deliveries in in-store promotion; change promotions; but if P&G takes
channel; change package to advertising and/or improve customers, cut price on
require less shelf space product premium brandWatch for competitive
barriers