Marketing illustration Marketing theory

Business competitors

Businesses exist in a competitive environment. For example, supermarkets are in fierce competition with each other to provide the best possible value for money goods, and to offer the most suitable range of products for their customers. Businesses compete in many ways. One of the most obvious ways is over price. For example, book sellers on the Internet compete to supply the same book at the cheapest price to customers. However, in addition there are many forms of non-price competition, e.g. location - being at the most convenient location for customers, customer service - giving the best personal attention to the needs of customers, customisation of products - providing additional features to products to cater for particular customer groups e.g. route finding satellite navigation on some models of cars, other forms of non-price competition.

Direct competitor

Within a market businesses are faced by direct competitors. These are firms that produce the same or very similar goods e.g. fruit and vegetable sellers on a Saturday market.

However, most products are differentiated in some way. For example, although soap powders may look highly similar each will offer some form of special ingredient that sets them apart. Indeed, in recent years differentiation in this market has been increasingly differentiated by the development of dissolvable sachets of liquid, solid tablets and other forms of detergent.

In addition to direct competition, businesses also face indirect competition.

For example, in the leisure industry cinemas are faced by indirect competition from other providers of leisure activities such as bowling alleys, and discotheques.

A direct competitor is a business that produces or sells a product or service that is identical or highly similar to another in the same market. Indirect competition occurs when firms compete for the same £ of expenditure, although they might be in different sectors of the same market, or in apparently different markets (see methods of analysing marketing opportunities).


Supporting Documents

These downloads will help to put marketing theory into context using real world examples from real businesses.

Re-focussing a company's culture and marketing mix
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Learn how Argos applied marketing theory to prosper in the retail industry by downloading our premium case study.

Using sports marketing to engage with consumers
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Learn how Kia Motors used marketing theory to succeed in the automotive industry by downloading our premium case study.

Leading a revolution in banking
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Learn how Intelligent finance employed marketing theory to thrive in the financial services industry by downloading our premium case study.

Innovation in infant nutrition
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Find out how Cow & Gate applied marketing theory to succeed in the food & drink industry by downloading our premium case study.

Entering a new market with a new product
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Learn how Experian used marketing theory to prosper in the financial services industry by downloading our premium case study.