Definition and types of competition

In the general marketing system, a firm thatacts on the market, is considered basically not by itself, but considering absolutely the whole set of information flows and relations that connect it with certain market entities. Various environmental conditions in which a particular firm operates, is called its marketing environment. The marketing environment of each individual company consists of a set of different active forces and entities that operate outside the firm and affect the ability of management, with the help of the marketing service, to maintain and establish with all possible target customers any relationship for a fairly successful cooperation.

Such marketing environment of each firmis composed of a macro environment and a microenvironment. The microenvironment is a variety of forces that are directly relevant to the company in question, as well as its potential for servicing potential customers. Macromedia is represented by a slightly more extensive social plan, which constantly exerts a certain influence on the microenvironment.

Thus, we can say that competitorsare an incredibly important component of the marketing microenvironment of each firm, and absolutely all kinds of competition are important. If you do not take into account such an element as your competitors, then there can be no question of developing any acceptable strategy or tactics to ensure the functioning of the firm.

To date, there are quite a fewall sorts of definitions of competitors, however, we will consider only the most common of them, as well as the very nature and types of competition. As it was said before, competitors are some subjects of the marketing system that are able to influence their choice of various suppliers, markets, the formation of an assortment, intermediaries, as well as the entire overall complex of marketing activities carried out by the firm. And it should be said that different types of competition have different effects. Considering competitors, thus, it can be said in other words that they are firms that have a part or even a completely identical niche. By niche in this case, we mean a certain set of segments of a certain market, for which services or products produced by the company are suitable.

The presence of competing firms begins graduallygenerate such a phenomenon as competition. From the point of view of economics, it should be noted that competition is an economic process of interconnection or interaction of the struggle of some producers or suppliers in the realization of certain products, as well as to some extent the competition between certain producers of a certain product for the most favorable conditions of production. It should be noted that all types of competition are taken into account, without relying on any one of them.

Market competition to datedevelops mainly only on the available market segments. That is why one of the most popular techniques, which are used by modern firms, is to drastically go to the market segments inaccessible to other competitors. Types of competition in the economy there are the following:

  • Price (when firms compete on the basis of price).
  • Non-price (when firms compete among themselves on the basis of quality of use value).

Price competition in our time goes back tothe times of completely free market competition between companies, when even different homogeneous products on the market were offered at absolutely different prices.

The reduction in prices was at that time such a basis,with the help of which each trader could allocate his goods, while attracting the attention of a huge number of consumers, thereby earning the desired market share.

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