Competition analysis
According to Christine K. Volkmann, Kim Oliver Tokarski and Marc Grunhagen, authors of the book titled ‘Entrepreneurship in a European Perspective: Concepts for the Creation and Growth of New Ventures’, any marketing process is seen to be enriched by market and competition analysis (Volkmann, Tokarski and Grunhagen 2010).
For example, market together with competition analysis generally involve activities that center on market research, market volume and market potential, market segmentation and positioning, and competition analysis in whole (Volkmann, Tokarski and Grunhagen 2010). Competition analysis represents continuous and selective observation of the market that is coupled with continuous market monitoring, which in essence provides for up-dated and relevant information about customers, competitors, the market, and overall business environment.
In other words, key questions that should be addressed by competition analysis include: “who are the customers of the company; who are the competitors of the company; what the unique selling proposition; how old are the products of the competitors; how old are the competition firms; what is the unique selling proposition of the product and the firm; which is the relevant market segment for the product” (Volkmann, Tokarski and Grunhagen 2010p.195).
According to a business article titled, ‘e-Business Plan: Competitor Analysis’ – an web-based marketing article providing a discussion on competition -, competition analysis constitutes an important element for any marketing plan. In essence, competition analysis is carried out since it “reveals the company’s competitive position in the ‘marketspace’; assist the company to develop strategies to be competitive; and investors of the business require the marketing plan to ascertain the competitive advantage of the company in the market” (Anonymous – author of the e-Business plan article, n.d, p.1).
Competition analysis starts with the process of identifying and evaluating the range and level of competition the company face and this include evaluation of direct competitors, indirect competitors and future competitors (Anonymous, n.d, p.1). The next step is to find out the actual competitors that pose threat to the company both in current moment and in future. After this, the company has to establish a competition analysis grid which is regarded a resourceful and valuable tool to carry out comparison of key company competitors from numerous perspectives that include “company information, product or service information, customer information, and sources of competitive advantage” (Anonymous n.d, p.1).
On overall, the competition analysis grid should be able to bring out both opportunities and weaknesses the competitors possess, and the strategy of the company should be to maximize and exploit on the opportunities created by competitor weakness while at the same creating re-adjustment programs and risk avoidance initiatives with aim of minimizing threats emanating from the competitors strengths (Anonymous, n.d, p.1).
Robert Stevens and David Loudon, authors of a marketing book titled, ‘Marketing planning guide’ contend and suggest that two fundamental questions generally get answered through competitive analysis: what is the nature of the forces that shape competition in the particular market; and which competitors are going after which market segment and with what marketing strategies (Stevens and Loudon 2005). The first question dwells on overall competition and the particular forces that influence the nature of the competition specifically in a given product-market situation. The second question on its part put much emphasis on the specific market segments that largely have been identified and selected through consumer analysis (Stevens and Loudon 2005).
The advice presented in numerous literatures is for the companies irrespective of their natures to embark on market segment competitor analysis, since evidence shows that a company is able to gain competitive advantage on segment-by-segment basis rather than on an entire market (Stevens and Loudon 2005). The aim and overall advantage of the segment analysis is to identify the segments or groups of consumers currently not served or segments competitors do not have clearly identifiable strategies.
Competitive analysis for online companies may be challenging, but on overall, the analysis does not deviate from the general principles of usual competitive analysis. With regard to Topcars, competitive analysis may include analyzing other online competitors involved in the sale of car accessories. Within the UK market, such equal competitors to Topcars and upon which the company should form its analysis include Halfords, Wilco Motor Spares, EMG Mitsubishi Cambridge, Discount Autoparts Ltd, Express Auto and Bonnets (Cambridge Online, 2010). The company should establish the marketing strategies used by the competitors, their market niche, their pricing strategy, their overall strengths and weaknesses, and lastly their promotional strategies.
According to Susan Ward, an online small business journalist and author, competition analysis largely constitutes process of collecting the necessary information and data about the company’s key competitors. The author asserts that important content of the competition analysis should dwell on, “what markets or market segments your competitors’ serve, what benefits your competition offers, why customers buy from them, and competitor’s products or services, their pricing and promotion” (Ward 2000, p.1). To efficiently gather the information, Susan Ward is of the view that certain key steps should be followed such as: “visiting the bricks and mortar store of competitors; visiting the competitors’ websites, locating the competitors’ business sites, talking to competitors’ customers and clients or evening talking to friends and acquaintances associated with the company competitors” (Ward 2000, p.1).
After the collection of relevant information concerning competitors, the company now has to analyze the information and find useful ways to use the information with regard to competitors. As a result, Susan Ward continues to provide advice where her position is that, the company should identify market niche that competitors have currently not established their presence, identification of market segment that has been ignored or overlooked by competitors, and identify the service or product that clients needs but competitors do not provide (Ward 2000).
Positioning
Robert Stevens and David Loudon, established marketing authors, define product positioning as, “the place the product occupies in the minds of customers relative to a set of criteria the customers use to think about the product and relative to a group of competitors that the customers have as an evoked set when considering the product” (Stevens and Loudon 2005, p.).
Product positioning comes after a thorough and effective market segmentation strategy has been formulated (Nijssen and Frambach 2000). After segmentation of the market has been done, the marketing personnel of the company need to make decision regarding appropriate positions that the product can most profitably occupy in each selected segment (Beamish and Ashford 2005).
Product position is seen to be an extension of brand image with respect to competing products, which is the way the product is competitively defined by consumers on key attributes (Beamish and Ashford 2005). The authors, famous for their book titled, ‘Marketing Planning’ further note that, during the instances of defining market positioning strategies, the objective does not only rest with product position, but also involves company positioning within the market place. This is essential in that, it aims at giving the company a competitive identity; thus, four questions guiding this positioning strategy include is the company going to be a market leader, market challenger, and market niche or market follower (Beamish and Ashford 2005).
In positioning as market leaders, the company opens its entrances for numerous competitor attacks and the attacks are likely to be aggressive in nature, which calls for need of constant monitoring of the competitor activities. Generally, competitor attacks may include market expansion; aggressive and offensive attacks to regain lost market share or defensive attacks to protect the existing markets (Beamish and Ashford, 2005).
On the other hand market challengers in most cases are hard to compete since they employ aggressive strategies using there immense resources. At the same time, they possess effective market intelligences and competitor profiles, which they use to attack (Beamish and Ashford, 2005). Market followers rank lower on the fiercest scale, and in general, possess some advantages where they usually follow the market leader strategies duplicating and becoming more reactive rather than proactive (Beamish and Ashford, 2005).
Lastly, market niches specialize and concentrate in specific particular market segments. To them aim is to achieve competitive advantage through differentiation of products and movement towards high quality markets (Beamish and Ashford, 2005). John Bradley, the author of an article titled ‘Product positioning strategy ‘, summarizes the strategies for product positioning by noting that, marketing succeed when the firm is able to establish appropriate product positioning strategy by adopting the six strategies of, “attribute or benefit, by use or application, by user, by product or service class, by competitor, and by price or quality” (Bradley 2007, p.1).
In other words, Osama Taha, an author of an online article titled, ‘Hot to Design your Position Strategy’ notes that “a positioning strategy results in the image you want to draw in the mind of your customers, the picture you want customers to visualize of what you offer, in relation to the market situation, and any competition the company face” (Taha 2004, p.2). At the same time, product-positioning strategy works out successfully after a company carries out an effective situation analysis during the marketing planning process.
With regard to Topcars Company, before deciding on marketing strategy, the company should fulfill the following processes: first, identify key features of the product that members of the target market use to evaluate the product; second, determination of the current positioning that competitive products occupy; and lastly, identify market niches the identified features can be offered in the best way and better than what competitors can do (Stevens and Loudon 2005).
Market mixing
Balram Dogra, an author of a book titled, ‘rural marketing’ defines Marketing mix refers to, “the set of actions, tactics, tools, or variables that a company uses to promote and sell its brand or product in a market” (Dogra, 2007, p.80). On overall, marketing mix constitutes all the tools a company may utilize to realize its objectives in the target market by aligning the company’s offer with the competitive environment as well as with the consumer needs and behavior (Baker and Hart 2007). Marketing mix has further been classified as 4Ps of marketing especially in instances to develop appropriate marketing plan, according to William M. Pride, Robert James Hughes and Jack R. Kapoor (2008), authors of the book titled ‘Business’.
According to Jerome McCarthy (1960), the pioneer of 4Ps of marketing, any company determined to enhance its competitiveness in the market must be able to effectively and efficiently control the 4Ps of marketing: product, price, promotion, and place (Dogra 2007). The 4Ps of marketing have typically constituted the marketing mix, although nowadays more Ps of marketing has been identified such as packaging, positioning, people, pacer, passion, publics, and politics (Dogra 2007).
Product
Product, according to the definition provided by Philip Kotler and Gary Armstrong, authors of ‘Principles of Marketing’, constitutes entire features and combination of both tangible and intangible goods and associated services that a company offers to its customers (cited in Vaneeva 2007). Further, product represents the most critical aspect of marketing mix, resting on two major reasons: products with regard to those producing it reflect the market expression, which reveals the company’s productive potentials while at the same time, measures the ability of the company to link with consumers (Lazer, 2007 cited in Vaneeva 2007).
As a result, product policy for a company has become essentially important whereas at the same time, product decisions state the extent and path of company’s activity; the product produced by any company again comprises both a component and a determinant of the marketing mix since it hold superior power on the other elements of the mix (Vaneeva 2007). With numerous products of auto accessories, Topcars Company has the advantage of being only auto online company. This enables the company to reach a wider global market as compared to its competitors.
With regard to product strategy, Topcars should establish a registration forum with relevant market niche online. Website product for the company should further have a link for signature, which can be used to get feedback for the product hence future improvement. On overall, the product strategy of the company should center on key aspects of features and benefits, brand name, quality, safety, service, and warranty (Hayes and Miller 2010).
Pricing
Kotler and Armstrong (2004), established marketing authors, are of the view that, pricing in essence involves setting a precise price as value for a product or service being offered by the company (Vaneeva, 2007). The authors, in basic terms, refer to price as “the amount of money that customers have to pay to obtain the product” (cited in Vaneeva 2007, p.1). Generally, assigning prices to products and services has become a hard task where, in most instances, low prices have been associated with attracting more customers (Vaneeva 2007).
Price strategy for any firm under marketing mix examination involves looking at the two identifiable parts: first, price determination refers to, “processes and activities employed to arrive at a price for a product including consideration of relative prices of products within the same line, and differences in price for similar products of differing grades and qualities” (Vaneeva 2007, p.1). On the other hand, price administration constitutes “all activities involved in fitting basic prices to particular sales situations such as geographic locale, functions performed by customers, position of distribution channel members, or special sales situations” (Vaneeva 2007, p.1).
According to an article by MBA Tutorials, online business tutorial materials titled, ‘Product Pricing Strategies’, when a product is part of market mixing, then the company can adapt to the following pricing options; “product line pricing, optional product pricing, captive product pricing, and product bundle pricing” (MBA Tutorials, 2009, p.1). Given Topcars in Cambridge is the only online company hence it reaches many consumers even outside its established market, its pricing strategy can be created around low-high price strategy. Low prices can be offered in new markets, as penetration into the market becomes the focus, while high prices can be adopted in high and increasing markets. Online advantage of the company should be used to provide information constantly about the price strategy of the company.
Promotion
Strategies with regard to promotion of products and services comprises all means in which a company is able to facilitate communication of product benefits and values to its target customers with broad aim of convincing them into buying the product (Kotler and Armstrong 2004 cited in Vaneeva, 2007). Promotion borrows heavily from marketing communication process, and in its sense, promotion involves the company’s strategy to provide for the marketing communication process.
Actual message propagated by promotion is advertisement in nature or sales presentation and the actual target of these advertisements is the potential customer (Vaneeva, 2007). Topcars as web-based company has an upper hand in promoting promotional activities that reach many clients and potential customer. Promotional strategy for Topcars should be to provide relevant and unique information about the products on the web that other competitors cannot. At the same time, advertisement in business journals and newspaper will leverage the company above its competitors.
In analyzing these 4Ps of marketing, it has been recommended that there should be maintenance of balance for all elements of marketing mix (Vaneeva, 2007). At the same time, the following key factors should be observed: analysis of entire product decisions that the company has been promoting such as product quality, key features, certain product options, style, name, product packaging product size, after-sale services, and many more. From this analysis, the company should further be able to locate its main aims and objectives through product.
In addition, to have an effective pricing analysis, it is important for the company to compare the existing pricing strategy with the company’s product position in the market (Vaneeva, 2007). Various pricing strategies exist that the company may use “penetration, skimming, competition-based pricing, psychological pricing, and price wars” (Proctor, 2000 cited in Vaneeva 2007, p.1). Lastly, effective promotion analysis largely intends to identify the communication goals that the company intends to achieve. In carrying out promotion activities, the following goals should be met; creation of awareness of the product, providing full information regarding the product, brand recognition, accessing a particular target audience, and evoking desire of purchase for the product (Vaneeva, 2007, p.1).
Place
According to Noel Capon, author of the book titled ‘Capon’s marketing framework’, marketing mix concept of place refers to how and where a particular product can be sold (Capon 2009). In essence, a product should be able to reach the consumers at the right time, right quantity, and in right state. Today, online technology is accelerating faster, the availability of products in different parts. Customers are able to make purchases online without having to move to the physical location.
Therefore, any effective marketing plan has to ensure place concept of any product is catered for, based on market intelligence and reports. Topcars uses various distribution channels; but it will be prudent for the company to research and use effective distribution channels that will ensure delivery of products to consumers is efficient (Capon 2009). Further, utilizing its website, the company can create opportunities to partner with other established online distribution channels to enhance the delivery of products to consumers is efficient.
Reference List
Anonymous. N.d. e-Business Plan: Competitor Analysis. Web.
Baker, M. J. and Hart, S., 2007. The marketing book. MA, Butterworth-Heinemann. Web.
Beamish, K., and Ashford, R., 2005. Marketing Planning. MA, Elsevier. Web.
Bradley, J. J., 2007. Product positioning strategy. Web.
Capon, N., 2009. Capon’s marketing framework. UK, Wessex Publishing. Web.
Dogra, B., 2007. Rural Marketing: Concepts andPractices. New Delhi, Tata McGraw-Hill. Web.
Hayes, D. K. and Miller, A. A., 2010. Revenue Management for the Hospitality Industry. MA, John Wiley and Sons. Web.
MBA Tutorials. 2009. Product Pricing Strategies. Web.
Nijssen, E. J. and Frambach, R. T., 2000. Creating customer value through strategic marketing planning: a management approach. NY, Springer. Web.
Pride, W. M., Hughes, R. J., and Kapoor, J., 2008. Business. OH, Cengage Learning. Web.
Stevens, R. E., and Loudon, D., 2005. Marketing planning guide. NY, Routledge. Web.
Taha, O., 2004. How to Design Your Positioning Strategy. Web.
Vaneeva, V., 2007. Marketing Mix. Web.
Volkmann, C. K., Tokarski, K. O., and Grunhagen, M., 2010. Entrepreneurship in a European Perspective: Concepts for the Creation and Growth of New Ventures. Berlin, Gabler Verlag. Web.
Ward, S., 2000. Writing the Business Plan: Preparing the Competitive Analysis of Business Plan. Web.