Chapter 3: Industry-, Competition- And Distribution Analysis

Question 1

Porter’s 5-forces model

Answer 1

A framework used to analyse an industry’s profitability and the attractiveness of a certain market

Question 2

What are Porter’s 5 Forces?

Answer 2

1) Threat of New Entrants
2) Supplier Power
3) Buyer Power
4) Threat of Substitutes
5) Industry Rivalry

Question 3

What is a potential 6th force for Porters 5 Forces model?

Answer 3

_ The Threat of Complementary Products

Question 4

Product Life Cycle (PLC)

Answer 4

A concept that describes the stages a product goes through from its introduction to the market until it’s eventual decline or withdrawal

Question 5

Stages in Product Life Cycle

Answer 5

1) Introduction Stage
2) Growth Stage
3) Maturity Stage
4) Decline Stage

Question 6

Introduction Stage of Product Life Cycle

Answer 6

• Slow Sales Growth
• Little or no profit
• High distribution and promotion expense

Question 7

Growth Stage of Product Life Cycle

Answer 7

• Sales increase
• New competitors enter the market
• Price stability or decline to increase volume
• Consumer education
• Profits increase
• Economies of scale

Question 8

Maturity Stage of Product Life Cycle

Answer 8

• Slowdown in sales
• Many suppliers
• Substitute products
• Overcapacity leads to competition
• Increased promotion and R&D to support sales and profits

Question 9

Decline Stage of Product Life Cycle

Answer 9

• Maintain the product
• Harvest the product
• Drop the product

Question 10

Product Adoption Curve

Answer 10

A model that describes how different groups of people adopt new products/services over time

Question 11

Stages in Product Adoption Curve

Answer 11

1) Innovators
2) Early Adopters
3) Early Majority
4) Late Majority
5) Laggards

Question 12

Innovators in Product Adoption Curve

Answer 12

• 2,5%
• First to adopt new product/technology
• Typically well-educated
• Helps introduce and test new products in the market

Question 13

Early Adopters in Product Adoption Curve

Answer 13

• 2,5% - 16%
• Opinion leaders / Influencers
• Help spread word about product and influence majority of consumers
• Crucial for gaining broader market acceptance

Question 14

Early Majority in Product Adoption Curve

Answer 14

• 16% - 50%
• Adopts new product slightly ahead of average person
• Cautious
• First significant wave of adoption leading to widespread product acceptance

Question 15

Late Majority in Product Adoption Curve

Answer 15

• 50% - 84%
• Skeptical & only adopt after majority have done so
• Typically more price sensitive & conservative in buying behaviour
• Final phase of widespread adoption
• Peak market penetration

Question 16

Laggards in Product Adoption Curve

Answer 16

• Last to adopt a new product
• Prefers traditional products, skeptical of innovations
• Only adopt product when it becomes unavoidable or the standard in the market

Question 17

Competition-Based Competitor Identification

Answer 17

A competitor identification method in which the management of the company recognises the direct or indirect competition and categorises them in specific strategic groups

Question 18

What are some examples of specific strategic groups within Competition-Based Competitor Identification?

Answer 18

• Top segment niche brands
• Large A-brands
• Smaller A & B brands
• Retail brands
• ‘No Name’ brands

Question 19

Customer-Based Competitor Identification

Answer 19

A method of competitor identification based on the choices and preferences of the customers

Question 20

Which competitor identification method is used the most?

Answer 20

Competition-Based Competitor Identification

Question 21

Marketing Myopia

Answer 21

Where a company focuses more on it’s products and competitions than on the needs and wants of the customer

Question 22

What are the most essential things to know when analysing a company?

Answer 22

• Competitor’s goals
• Competitor’s strategies
• Competitor’s success factors

Question 23

Distribution Analysis

Answer 23

The process of examining and evaluating the channels through which a product or service reaches its end customers.

Question 24

What needs to be analysed in a Distribution Analysis?

Answer 24

• Distribution intensity (% of market we are serving?)
• Distribution Channel Choice (Choice of channel to reach this %)
• Distribution Channel management (How do we manage the channels?)

Question 25

Traditional retail (brick-and-mortar)

Answer 25

Offline purchasing & Offline orientation

Question 26

Showrooming (omni-channel)

Answer 26

Online purchasing & Offline orientation

Question 27

Online retail (pure-play)

Answer 27

Online purchasing & Online orientation

Question 28

Webrooming (omni-channel)

Answer 28

Offline purchasing & Online orientation

Question 29

What is it called when a company operates through online purchasing & offline orientation?

Answer 29

Showrooming (omni-channel)

Question 30

What is it called when a company operates through online purchasing & online orientation?

Answer 30

Online retail (pure-play)

Question 31

What is it called when a company operates through offline purchasing & offline orientation?

Answer 31

Traditional retail (brick-and-mortar)

Question 32

What is it called when a company operates through offline purchasing & online orientation?

Answer 32

Webrooming (omni-channel)

Question 33

The Disintermediation Trend

Answer 33

A trend where traditional intermediaties (wholesalers, brokers or retailers) are removed/bypassed from the supply chain, allowing producers or service providers to sell directly to consumers

Question 34

Micro level of Distribution Analysis

Answer 34

At the level of the individual distributors
- Distributor strategy
- Relationship & sales management
- Importance of distributor
- Importance of brand
- Does the distributor become more and more a competitor?