Core Concepts of Marketing

EXTERNALFACTORSTHATAFFECTPLANNING 105

TABLE5.1 AnalysisofGeneralMotors'Competitors

Autos

Transportat!o,'

Other Repairs

After-Market

Parts

Toyota

Ford

Chrysler

Honda

Audi

Schwinn

DeltaAirlines

AmericanAirlines

Hondamotorcycles

Masstransit

Autodealers

Sears

K-Mart

Localrepairshops

Pep-Boys

NAPA

TABLE5.2 AnalysisofNintendo'sCompetitors

VideoGames Entertainme('lt

GameSuppliers

Sega
Atari
Genesis

GameProviders

TheTilt

Videogameparlor

Mazzio's

In-Home

Familytime

ParkerBrothers

BlockbusterVideo

Out-of-Home

PIitt Theaters

TheNewYorkMets

SixFlags

Hobbies

Hunting,fishing,

golf,LittleLeague,

baseball,GirlScouts

It is clearframthesetwoexamplestha~anaccurateaccountingofcompetitorsismuch

broaderthantheobvious.Ifwedefineourcompetitorstoonarrowly,weriskthechance

thatanunidentifiedcompetitorwilltakemarketshareawayfromuswithoutomknowl-

edge.Forexample,GeneralMotorsobviouslycompetesagainstFord,Chrysler,Toyota,and

otherautomanufacturers.ButtheyalsocompeteagainstSearsintherepairmarket,thesub-

wayinlargecities,theairlines,andSchwinn,amongpeopleforwhombicycleridingis

popular. NintendocompetesagainstSegainthevideogamemarket.Buttheyalsocompete

againstBlockbusterVideo,thelocalgym,boardgames,thetheater,androckconcerts.Com-

petitionfocusesonthewantsandneedsbeingsatisfied,nottheproductbeingproduced.

GeneralMotors,then,iscompetingtosatisfyyourneedfortransportation.Nintendois com-

petingtosatisfyyourneedforentertainment.

Inadditiontoidentifyinga competitorfromtheperspectiveofthecustomer,cller

criteriamightbethegeographiclocationofcompetitors,relativesize,history,channelsof

distribution,andcommontactics.

Asecondquestiontoconsideristhefollowing:"Whatcriteriadoweneedtouseto

makesuretha~OlArcompetitorsare'colTectly'identified?" Onewayofansweringthisques-

tionistotrackthe customer'sperceptionsofproductgroupingsandsubstitution.Dothey

changeovertime?Likewise, trackingexpectedcompetitorsovertimemayproveinsightful.

OncecompetitorsarecOlTectlyidentified,it is helpfultoassessthemrelativetofac-

torsthatdrivecompetition:entry,barg2iningpowerofbuyersandsuppliers,existingrival-

ries,andsubstitutionpossibilities.Thesefactorsrelaletoa firm'smarketingmixdecisions

andmaybe usedtocreatea barriertoentry,increasebrandawareness,orintensifya fight

formarketshare.

Barrierstoentryrepresentbusinesspracticesorconditionsthatmakeit difficultfor

neworexistingfirmstoenterthemarket.Curentrepreneurs CarolandJane,acedseveral

barrierstoentry.Typically,barrierstoentrycanbeintheformofcapitalrequirements,

advertisingexpenditures,productidentity,distributionaccess,orswitchingcosts.Japanhas

beenaccusedofhavingunofficialcultural-basedbarrier~totheJapanesemarket.