The marketing environment of a firm is made up of a microenvironment and a macroenvironment. The microenvironment is represented by forces that are directly related to the firm itself and its ability to serve its clientele, that is, suppliers, marketing intermediaries, customers, competitors and contact audiences. The macroenvironment is represented by forces of a broader social plan that influence the microenvironment (factors of a demographic, economic, natural, technical, political and cultural nature).
Thus, competitors are an important part of a firm’s marketing microenvironment. Without taking into account and studying, it is impossible to develop an acceptable strategy and tactics for the functioning of the company in the market.
There are many definitions of competitors, we will give the most common ones. As noted above, competitors are subjects of the marketing system, which by their actions influence the choice of markets, suppliers, intermediaries, the formation of a range of goods.
Competing firms are firms that have wholly or partially overlapping fundamental niches. The fundamental market niche here is understood as a set of market segments for which the goods and / or services produced by the given firm are suitable.
From an economic point of view, competition is an economic process of interaction, the relationship between the struggle of producers and suppliers in the sale of products, rivalry between individual manufacturers or suppliers of goods and / or services for the most favorable terms of production. Thus, competition in a general sense can be defined as rivalry between individuals and economic units interested in achieving the same goal. If this goal is concretized from the point of view of the marketing concept, then market competition is the struggle of firms for a limited amount of effective consumer demand, waged by firms in the market segments available to them.
From a marketing point of view, the following aspects are important in this definition:
First, we are talking about market competition, that is, about the direct interaction of firms in the market. It concerns only the struggle that firms are waging in promoting their goods and / or services to the market.
Secondly, competition is for a limited volume of effective demand. After all, if the demand is satisfied with the goods and / or services of one firm, then all the others are automatically deprived of the opportunity to sell their products. This situation, for example, was observed at the very beginning of reforms in Russia, when a small amount of goods that began to come from the West were faced with an almost insatiable domestic demand.
Competition is a good thing. In marketing it helps to always be in trend, always rushing into new things, because we all know that marketing is introducing new things itself.
Types of marketing competition
There are several types of competition in marketing.
- Functional competition – arises because any need can be met in different ways.
- Specific competition is something that looks similar to a product, that have the same target, same needs but different from each other in characteristics.
- Subject competition is something that creates the same products, which are different only in quality. But sometimes quality also can be the same.
Types of marketing strategies
Restricted response – with confidence in your customers; at the end of the activity in the given market; with a shortage of means of response.
Selective reaction- a selective response to the behavior of competitors (for example, a reaction to a decrease in prices, but indifference to an increase in the activity of competitors in advertising); this approach allows you to compete in several directions or markets at the same time.
Random, low-predictable reaction – the response is not directly related to the economic situation and the specific situation of competitors.