Discuss marketing competition and types of competition in marketing.

Email This Post Email This Post

Competition is the rivalry between companies for market share in a target market where the customers have similar needs and wants.

A marketer’s job doesn’t ends at serving the needs and wants of the target customers. There may other companies as well who may see the same needs and wants. They may enter the same market with similar kind of products. The competition can be from an existing firm or the competitor may enter after the organisations product launch.

Competitor analysis forms an integral part of the marketing strategy. The analysis is based on the threats and opportunities basis the strengths and weaknesses of the existing or emerging competitors.

The firms counter competition by making changes to the marketing program or the 4P’s – Product, Price, Place, and Promotion.

For example, with the increasing demand of smart phones there is a stiff competition to market leaders like Samsung and Apple from new brands like LeEco, Xiomi, Oppo, and Micromax. Basis the market predictions in developing countries like India with a population of over a billion, many smart phone manufacturers are leaving no stone unturned to increase their market share. Motorola too entered the Indian market few years back to tap the opportunities available amid competition from Samsung, htc, Sony and Apple.


Types of competition –

There are 4 types of competition – Pure competition, monopolistic competition, oligopoly, and monopoly.

Pure competitionNo barriers to competition and large number of suppliers. There are large number of sellers, and customers have a wide variety of brands to select from. Mostly the prices are set basis the economy of target market or markets. The customers buy the product basis the availability. They will prefer buying the product from a nearest location. Organisations have limited control over price. A change in price will enable customers to switch to a competitor product. The price is determined by supply and demand factors. For example, agricultural products, cigarettes.

Monopolistic competitionIt is similar to pure competition (no barriers to competition and large number of suppliers) except the sellers try to differentiate the offerings basis the quality, packaging, style, convenience, and location. For example, soaps, shampoo, gasoline, greeting cards, barbers, restaurants, etc. The sellers advertise their products as better in various aspects to justify the higher price.

OligopolyHigh barrier to enter the market and limited sellers. Limited number of organisations in the market compete to get maximum customers. For example, car manufacturers. The manufacturing set up usually requires high investments which becomes a barrier for many companies to enter the market. The supply in the market is usually high by a manufacturer as less competitors are present. Because of this the manufacturer has control over the price. But the organisations are forced to give competitive prices to increase market share. For Example, banking, insurance, mobile service providers, airline fares, etc.

MonopolyHigh barriers to entry and the market is dominated by one large company. The organisation has a say on setting the price. It can be because of exclusive rights to raw-materials, patent, government policy. For example, railways and electricity supply in India, many drug manufacturers have patent on their medicines, Microsoft windows operating system.


Microsoft windows operating system is at the moment compatible with almost all the computer manufacturers like Dell, HP, Lenovo, Samsung, etc. So in case of Microsoft there is a monopoly and computer manufacturers will have to invest heavily to create a new operating system and then to market it will have a very high risk involved.

More Entries :

Recently Added

Read previous post:
Discuss Porters 5 forces model on competition.

This was developed by Harvard Business School’s Michael E. Porter in 1979. It is a method which answers questions about the competition. The five forces...