Alsem, Karel Jan

English

This study deals with competitive analysis within the field of marketing. The purpose of the study is twofold. The first objective is to improve the "theory" of competitive analysis. To this end, the several stages of a competitive analysis and the corresponding research techniques are described, in chapter 2. The second objective of this study deals with the use of econometric models in competitive analysis. ... Zie: Summar

Dissertations of the University of Groningen

   University of GroningenConcurrentie-analyse in de marketingAlsem, Karel JanIMPORTANT NOTE: You are advised to consult the publisher's version (publisher's PDF) if you wish to cite fromit. Please check the document version below.Document VersionPublisher's PDF, also known as Version of recordPublication date:1991Link to publication in University of Groningen/UMCG research databaseCitation for published version (APA):Alsem, K. J. (1991). Concurrentie-analyse in de marketing: theorie, technieken en toepassingen. s.n.CopyrightOther than for strictly personal use, it is not permitted to download or to forward/distribute the text or part of it without the consent of theauthor(s) and/or copyright holder(s), unless the work is under an open content license (like Creative Commons).The publication may also be distributed here under the terms of Article 25fa of the Dutch Copyright Act, indicated by the “Taverne” license.More information can be found on the University of Groningen website: https://www.rug.nl/library/open-access/self-archiving-pure/taverne-amendment.Take-down policyIf you believe that this document breaches copyright please contact us providing details, and we will remove access to the work immediatelyand investigate your claim.Downloaded from the University of Groningen/UMCG research database (Pure): http://www.rug.nl/research/portal. For technical reasons thenumber of authors shown on this cover page is limited to 10 maximum.Download date: 04-06-2022SummaryCornpetitive analysis in marketing: theory, techniques and applicationsIntroductionIn the fast-growth economy of the 1960's, companies paid less attention than today totheir competitors. The economic pie was growing fast enough for everyone to succeed.However, in the seventies and the eighties competition has increased enormously. Onereason for this is the decline in the growth in many markets. Other reasons are rapidtechnological developments, stronger international competition and, as a result of thesedevelopments, shorter product life cycles.Thus it has become more important for companies to perform a competitive analysis intheir strategic planningprocess.Research questionsThis study deals with competitive analysis within the field of marketing. The purpose ofthe study is twofold.The first objective is to improve the "theory" of competitive analysis. To this end, theseveral stages of a competitive analysis and the corresponding research techniques aredescribed, in chapter 2.The second objective of this study deals with the use of econometric models incompetitive analysis. In the literature on econometric modelling and forecasting oftenstrong assumptions are made with respect to the marketing behavior of competitors.such as:- accounting for competition in modelling brand sales will provide better forecasts ofsales than models without variables which account for competition;- competitive marketing behavior in the forecasting period is known;- it is known who the competitors are: the market can be defined;- in the forecasting period there will be no new entrants.These assumptions facilitate the use of econometric models.In chapters 3 through 6 respectively we elaborate on these four specific assumptions oncompetition. We investigate empirically for some markets whether these assumptionscan be maintained, what problems arise and which solutions can be found if theseassumptions are relaxed.The tlrcory of competitive analysisCompetitive analysis covers a wide variety of research questions which are examined inseverai disciplines such as micro-economics, industrial organization economics andrnarketing. Examples of these questions are: what are the boundaries of a market, howintense is the competition in a market, what are the future strategies of "our" maincompetitors? Many firms do not have a structured framework for performing thecompetitive analysis, because competitive analysis covers such a broad area. In chapter 2of this study we present such a framework.In the strategic planningprocess a competitive analysis is part of the external anaiysis. Inorder to better understand the meaning of "competitive analysis" a distinction is madebetween- an industry analysis and- a competitor analysis.176 Concurentie-analyse in de marketing: theorien technieken en toepassingenA central assumption in the industry-(organization)analysis that the attractiveness ofan industry is determined by the intensity of competition. A firm that is able to resist thefactors which determine industry competition better than its competitors will have acompetitive advantage and thus a relatively good performance. In the industry analysisaompetition is analyzed at an aggregated (market)level and the conduct of individualcompetitors is ignored.An industry analysis consists of two stages:tr. the identification of the competitors;2. the assessment of the industry attractiveness.Several research methods can be used in identifying the competitors. A distinction canbe made between customer oriented methods (methods using data on the demand sideof the market) and competitor oriented methods (methods using data on the supply sideof the market). Examples of customer oriented methods are the use of brand-switchingdata, the estimation of cross sales elasticities, the use of product-deletion data andpositioning studies. These methods mainly provide information at the brand-level.Competitor-oriented methods in identi$ing the competitors are the estimation ofreaction-eiasticities and the concept of strategic groups.The industry attractiveness is investigated by examining:* environmental variables, such as political and economic factors;* aggregated market factors, such as (future) market growth;t the structural variables which determine the level of competitive intensity within anindustry.Marketing researchers are more concerned with the performance of products and firmsthan with the performance of entire industries. Because of this orientation, a firm shouldalso perform a competitor analysis, which deals with the behavior of individualcompetitors. A competitor analysis can be viewed as the disaggregated part of thecompetitive analysis.The goal of the competitor analysis is to provide insight into the strengths andweaknesses and the future behavior of the (main) competitors. The following stagesshould be followed:1" selection of the target competitors;2. assessing the competitors' current objectives;3. assessing the competitors' current strategies;4. assessing competitors' capabilities;5. predicting competitors' future strategies.The results of stages 2 through 4 are the input for stage 5"Both in industry analysis and in competitor-analysis econometric models may be a usefultool. The use of these models has been stimulated recently by the growing availability ofmarket research data.Competition and econometic modellingIn chapter 3 we investigate whether accounting for competition in modelling brand salesprovides better predictions of brand sales. Using bimonthly data on three brands in amarket of fast-moving consumer goods, we find that for two of the three brands themodels with variables which account for competition do not provide better salesforecasts than models without variables which account for competition. This ratherSwrnntarysurprising result camarket.The predictive povattention in the miquestion of howpredicted" This ismarket share modrIn chapter 4 weassumptions with rCalibrating a numfor nine brands frcleads to four concl1. market share pIrespect to futur,2. sophisticated Ptthan naive pred3. using predictedpredictions thar4. sophisticated prrnarket share plThe marketing litemodels. In modelidentified. Mostlyflowever, when scvariables in rnarldefinition.In chapter 5 we ela way of modellitt(absolute) unit setelevision advertisand in magazines.in the periods 1!advertising was exCalibrating absoluon advertising ex1first years after iadvertising in priexpenditures in dzIn the marketingforecasting perioclong forecasting his expected to enpredict future sakIn chapter 6 we <advertising markr(advertising expeten toepassingentractiveness ofle to resist the:s will have adustry analysis: of individualJistinction can: demand side:he supply siderand-switchingtion data ande brand-level.estimation ofrsity within anucts and firmsa firm shouldof individuald part of thestrengths andllowing stagesay be a usefulavailability ofrg brand salese brands in a:e brands thebetter sales. This ratherSurnmarysurprising result can be explained by the specific positioning of the brands in the chosenmarket.The predictive power of market share models is a subject that has received considerableattention in the marketing literature. However, hardly any attention has been paid to thequestion of how the values of the marketing instruments of competitors can bepredicted" This is remarkable since these values constitute the input variables for amarket share model.In chapter 4 we investigate the sensitivity of predicted market shares to differentassumptions with respect to competitive behavior.Calibrating a number of models and predicting competitive behavior and market sharesfor nine biands from three markets of fast-moving consumer goods using bimonthly dataleads to four conclusions:1. market share predictions are not very sensitive to the assumptions that are made withrespect to future competitive marketing behavior;2. sophisticated predictions of competitive behavior are not consistently more accuratethan naive predictions;3. using predicted values of competitive behavior may provide better market sharepredictions than using observed values of competitive behavior;4. sophisticated predictions of market shares are not systematically better than naivernarket share predictions.The marketing literature on econometric modelling is focused primarily on market sharernodels. In modelling market shares, it is often assumed that the competitors can beidentified. Mostly it is assumed that all brands in a market are (potential) competitors.However, when some brands do not actually vie for the same customers in the market,variables in rnarket share models are misspecified, because of the "wrong" marketdefinition.In chapter 5 we examine this problem for the Dutch advertising market and we describea way of modelling sales which is less sensitive to market definition, namely modelling(absolute) unit sales. The empirical problem deals with an investigation of whethertelevision advertising in the Netherlands competes with advertising in daily newspapersand in magazines. Television advertising in the Netherlands was introduced in 1967, andin the periods 1968-1972 and 1985-1989 the limited air-time available for televisionadvertising was extended.Calibrating absolute sales models ("sales" is advertising expenditures) using annual dataon advertising expenditures in the different media, leads to the conclusion that in thefirst years after its introduction the extensions of television advertising have reducedadvertising in print media. However, the recent extensions hardly affect advertisingexpenditures in daily newspapers and magazines.In the marketing literature on forecasting brand sales it is often assumed that in theforecasting period no new competitor will enter the market. Especially if a relativelylong forecasting horizon is used, this may be an unrealistic assumption. If a new entrantis expected to enter the market, the ability of an econometric approach to accuratelypredict future sales becomes questionable.In chapter 6 we examine this problem for the same market as in chapter 5 (the Dutchadvertising market) and we describe an alternative method for forecasting "sales"(advertising expenditures). The applied method is an intention survey. The method isr77r78 Concunentie-analyse in de nnrketing; tlrcoie, technieken en toepas.tingenused to forecast the impact of the introduction of private broadcastins in theNetherlands (which took place in October 1989) on advertising expenditures*of otherrnedia"Based on an intention survey with respect to the advertising plans of advertisers andtheir _advertising agencies, it is predicted that the introduction of private broadcastingwould lead to a strong substitution with advertising on the public broadcasting channelJ.From a comparison of the predictions and the realized figures we concludl that theintentions have provided acceptable predictions" A problem which is quite ofteninherent to the use of intention surveys is the low response. We have Lreen ionfrontedwith this problem because the willingness of the firms to provide information on theiradvertising plans is limited in our study.;  j .4  c? t '/, t ' t ,/ ' . / ,Curriculum'Karel Jan Alsem (1Groningen. Na zijnWetenschappelijkeverschijnende persSEO, Stichting vrMomenteel is hijsectie Marktkundeonderzoeksinteressrrentie-analyse, en v

Concurrentie-analyse in de marketing:theorie, technieken en toepassingen

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Concurrentie-analyse in de marketing:theorie, technieken en toepassingen

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