Asif Jamal Lecturer of

Management Science

NUML

Marketing competition

Content

Ø  Introduction

Ø  Marketing competition

Ø  Three levels of competition

Ø  Perfect Competition

Ø  Structures Of Perfect Competition

Ø  Imperfect Competition

Ø  Pro’s and Con’s Of Perfect Market

Ø  Summary

Competition

Ø  Is a term that encompasses the notion of individuals and firms striving for a greater share of a market to sell

or buy goods and services

Ø  Causing commercial firms to develop, new products, services and technologies, giving the consumer a

greater selection and better products

Marketing Competition

Ø  Competition is seen as a state which produces gains for the whole economy, through promoting consumers

sovereignty. It may also lead to wasted (duplicated) effort and to increased costs (and prices) in some

circumstances

Three Levels of Competition

Ø  Brand competition: products performing same function competing against each other

Ø  Substitute competition: products that are simillar to each other, ex; margarine, mayonnaise, ..etc

Ø  Budget competition: anything that the consumer might want to spend their available money, all products competing

for the consumer’s money

Perfect Competition

Ø  Describes markets such that no participants are large enough to have the market power to set the price of a

product

Ø  A perfect market exists only when every participant is a “price taker”, and no participant influences the price

nor the product.

Structures Of Perfect Competition

Ø  Infinite buyers and sellers

Ø  Perfect information

Ø  Zero transaction costs

Ø  Profit maximazation

Imperfect Competition

Ø  A competitive situation in any market that did not satisfy the conditions of a Perfect Market

•  Monopoly

•  Oligopoly

•  Monopsony

•  (etc…)

Pro’s and Con’s Of Perfect Competition

Ø  Advantages:

•  Competition encourages efficiency

•  Consumers charged a lower price

•  Change in demand , lead in extra supply

Ø  Disadvantages:

•  Insufficient profits for investment

•  Lack of product variety

•  Unequal distribution of goods and income

Summary

Ø  A market is any one of a variety of systems, institutions, procedures, social relations and

infrastructures whereby parties engage in exchange. While parties may exchange goods and services by

barter, most markets rely on buyers offer their goods or services (including labor) in exchange for money

Asif Jamal Lecturer of Management Science National University Of Management Science