Marketing plan does not stop by introducing new product. For a successful market plan the company has to focus on other external factors like competitors. It has to encourage people to spend their money on its product. The company also has to focus on how its competitors are doing and why they are preferring the other product rather than their product. Marketers defined this process as Competitive scanning.
Competitive scanning is the process made by companies to analyse the market and competitor’s performance. It can be considered as the most important process in a successful marketing plan. Performance does not always have to sales it might be selling a new product or even just a concept product. It also shows the threats around the company coming from an existing competitor or threats coming from new competitors. New competitors may be produce a substitution product with a lower price which will lead to a decrease in sales. Competitive scan should be made every short time of period but it always depends on the market structure. For example, Tesco now is trying to beat all other supermarkets prices so competitive scan should be made weekly. While Pfizer does not have to do any competitors scan because they are not in a competition. The most important result from competitor scan is that it shows in which position the company currently classified in.
Competitive position shows how good the product for the buyer is. In other words, it shows the reputation of the company and its performance regarding other competitors. Competitive positioning is affected by different factors related to customer customers. Some of these factors are like why is my product different from others. For example why people prefer burger king rather than McDonald’s. Other factor is what makes my product unique.
There are different classifications for competitive positions. These positions can be measured by two measurements which are sales revenue and sales volume. Sales revenue is how much profit the company has made from sales while sales volume is how many products has been sold.
First market leader, obviously it is the company that leads the market or at the head of the competitors. Market leaders also dominating other aspects of business like customer loyalty, distribution and advertising. For example, McDonald’s is leading the fast food industry. Second position is Market challengers, which are the companies who are trying to catch up with market leaders. They have a little difference in market share comparing with market leader, also they are trying to put the leader under pressure so they can get a chance of leading the market. The third position is faster movers. Small companies expanding very quickly and which are considered as a threat on both the leaders and challengers. For example, apple when they started producing IPod and how they rapidly penetrated the market with the new idea. The fourth position is market followers, companies that has low market share...