ABDT5114 Product Management Tutorial 4 Answer June 7, 2011

Question 1
The definition of competition may be as specific as rival brands of the same or very similar products/services,
or as all-encompassing as any item that may attract funds the consumer may spend on the firm offerings.

If define too narrowly, a firm may overlook serious threats (potential and new competitor) completely. If
defines too broadly, the results are useless for strategic planning (include for distant competitors/ indirect
competitors).

Question 2
Product/brand managers must compete with their peers to obtain the scarce resources needed to support
the offering for which they are responsible. Such competition is often used to evaluate current
product/brand managers for advancement.

Question 3
Base of competition consist of:

1. Customer oriented- compete for same customer for their product.

Who there are- competition for same budget.
When they use it
Why they use it- benefit sought.
2. Marketing oriented- advertising and promotion.
Theme/copy strategy- AirAsia “everyone can fly”.
Media- compete to advertise in prime time.
Distribution (place) - shelve space; Amway territory vs. Cosway territory.
Price- price conscious.
3. Resource oriented
Raw materials for example electronic chip
Employees- compete to hire skillful workers (human capital asset).
Financial resource- different product line in a company, compete for financial budget.
4. Geographic – e.g. Bata (local) vs. Cross (international).

Question 4
4 level of market competition include:

1. Product form- the narrowest form of competition identifies as competitors only those offering which
pursue the same segment with highly similar/ identical features/ values. Product manager task is to
convince customers that the brand is better than others. For example, Diet Pesi, Diet Coke, Diet Ritc
Cola.
2. Product category competition is based on the industry in which the firm competes. The product has
similar features and category. Product manager task is to convince customer that the product form is
best in the category. For example, soft drink such as Regular Colas, Diet Lemon Limes, Fruit Flavors
Colas
3. Generic competition is defined as being comprised of these products/ services that fulfill the same
customer need. Product manager task is to convince customers that the product category is the best
way to satisfy needs. For example, beverage to quench thirst such as Juices, Coffee, Wine, Beers, and
Tea.
 ABDT5114 Product Management Tutorial 4 Answer June 7, 2011

4. Budget competition, the budget view considers all products and services as competitors for the
consumer’s discretionary disposable income. Product manager task is to convince customers that
the generic benefit are the most appropriate way to spend their money. For example, food and
entertainment such as video rentals, ice cream, fast food, baseball cards, etc.

Question 5
1. Under product form competition, customer must be convinced that the brand is better than others.
2. Product category competition, require the customer to be convinced that the product form is best in
the category.
3. In generic competition, customers must be persuading that the product category is the best way to
satisfy needs.
4. Under budget competition, customers must believe that the generic benefit is the most appropriate
way to spend their money.

Question 6
While many approaches may be used, in the final analysis, it is the consumer who decides which rivals are
competitors for the firm. A perceptual map is an effective means to present consumer perceptions of rival
offerings, their perceived similarities/ differences and the values assigned to relevant features regarding the
firm’s offering.

Perceptual mapping define specific competitors using an effective graph that display the opinions/
perception of customers/ potential consumers. Competition is display relative to product brand or company,
show clear view on company’s position, market segment and potential future ventures.