Question

1. Provide a description of competition.

2.What is the value of positioning in relationship to competitors?

Answer 1

1. In economics, competition is a condition where different economic firmsseek to obtain a share of a limited good by varying the elements of the marketing mix: price, product, promotion and place.Because the resources are scare and limited in proportion the firms have to compete in the markets to maximize their profits without decreasing their outputs. Rivalry in which every seller tries to get what other sellers are seeking at the same time: sales, profit, and market share by offering the best practicable combination of price, quality, and service. In classical economic thought, competition causes commercial firms to develop new products, services and technologies, which would give consumers greater selection and better products. The greater selection typically causes lower prices for the products, compared to what the price would be if there was no competition (monopoly) or little competition (oligopoly). There are four types of competition in a free market system: perfect competition, monopolistic competition, oligopoly, and monopoly.

2) Competitive positioning is about defining how you differentiate your offering and create value for your market. It’s about carving out a spot in the competitive landscape, putting your stake in the ground, and winning mindshare in the marketplace – being known for a certain something.

A good positioning strategy is influenced by:

• Market profile: Size, competitors, stage of growth
• Customer segments: Groups of prospects with similar wants & needs
• Competitive analysis: Strengths, weaknesses, opportunities and threats in the landscape
• Method for delivering value: How you deliver value to your market at the highest level

Hence positioning in relationship to competitors is very valuable as it helps the firm build upon its unique selling proposition.