Week 3 Blog

Questions for Class

One of my class questions this week related to defining competitors.  Due to the economic fluctuations in recent years this lead to me ask whether or not this would impact the overall amount of competitors that should be considered.  If there is less spending money available by consumers, should more competitors be considered?  In my opinion, this would have an impact.  Rather than just potentially reviewing direct competitors, people may be more likely to substitute your product for indirect competitors.  In class we discussed the reduction in cable due to less money available, not necessarily because cable was substituted with something else like satellite, but could have been substituted for unrelated objects like groceries.  If consumers are spending less, they may have to make more product substitutions overall.

My next question was actually related to the first one.  There was a picture of a De Beers diamond ad shown below - noting to 'Redo the Kitchen Next year'.

I can see the intention of the ad, but I have to say this simply reminded me that those diamonds are as much as re-doing my kitchen.  Seeing this ad would make me change my mind about the potential impulse purchase of new diamonds.  Does anyone else agree that potentially calling out an opportunity cost in an advertisement may lead people to think more about the other ways they could be spending their money?

Prompts from Class

One class discussion included the idea of whether the customer or company determines the competition.  I would have to say that the customer is the overall decision maker related to competitors - especially noting the question paragraphs discussed above.  I believe our Drucker reading supports this theory in that he makes the point that marketing in general is customer driven.  Companies could look at any competitors they wish for comparison, but that doesn't necessarily mean they are picking the competitors that customers are choosing between with their products.

Another discussion focused on ethics.  There is a definitely a line between ethical and unethical competitor analysis.  I have heard stories of people getting fired from a job due to crossing this line.  Trying to secretly sneak information from a competitor was enough for his company to let him go as they did not want to be even remotely associated with this type of behavior.  The Analysis book mentions becoming a stockholder in your competitor to gain inside information.  Although I don't believe this is illegal, I don't believe it's ethical.  As a stockholder you have a partial say in the organization and it just doesn't seem appropriate to have a say in a competitor as that could lead to potential sabotage.

Pharmasim

I looked at two reports this week.  One report was 'Promotion Activity' which showed how much each company is spending on different types of promotional activities, including co-op, samples, point-of-purchase, and coupons.  Next I looked at the report 'Purchase Intentions'.  This report showed which product consumers intended to purchase when they arrived and then which product they actually purchased.  By looking at these reports together, it was easy to see that ALL companies that had increased percentage from the intention to purchase to actually purchased offered free samples.  This lead me to the conclusion that sample offers helped influence purchases over original intentions.