In the general marketing system, a company that operates in the market is considered mainly not by itself, but considering absolutely the totality of information flows and relations that connect it with certain market entities. The various environmental conditions in which a particular company operates is called its marketing environment. The marketing environment of each individual company consists of a combination of various active forces and entities that operate outside the boundaries of this company and affect the ability of management to maintain and establish any relationship with all kinds of target customers for a sufficiently successful cooperation.
Such a marketing environment of each company is composed of macroenvironment and microenvironment. The microenvironment is a variety of forces that are directly related to the company in question, as well as its ability to serve potential customers. The macroenvironment is represented by the forces of a slightly more extensive social plan, which constantly have a certain effect on the microenvironment.
Thus, we can say that competitors are an incredibly important component of the marketing microenvironment of each company, and absolutely all types of competition are important. If you do not take into account such an element as your competitors, then there can be no talk of developing any acceptable strategy or tactics to ensure the functioning of the company.
Today there are quite a lot of various definitions of competitors, however, we will consider only the most common of them, as well as the essence and types of competition. As mentioned earlier, competitors are some entities of the marketing system that are capable of their own actions to influence the firm’s choice of various suppliers, markets, assortment formation, intermediaries, as well as the entire overall complex of marketing activities carried out by the company. Moreover, it is worth saying that different types of competition have different effects. Looking at competitors in this way, we can say in other words that they are firms with a partially or even completely matching niche. In this case, a niche means a certain set of segments of a certain market for which services or those goods manufactured by this company are suitable.
The presence of competing firms is gradually starting to give rise to the phenomenon of competition. From the point of view of the economy, it is worth noting that competition is a certain economic process of interconnection or interaction between the struggle of some manufacturers or suppliers in the sale of certain products, as well as to some extent the rivalry between certain manufacturers of a certain product for the most favorable conditions of production. It should be said that all forms of competition are taken into account, without relying on any one of them.
Market competition today develops mainly only in accessible market segments. That is why one of the most popular techniques resorted to by modern firms is to abruptly go into market segments inaccessible to other competitors. Types of competition in the economy are as follows - these are:
- Price (when firms compete based on price).
- Non-price (when firms compete among themselves on the basis of the quality of use value).
Price competition nowadays dates back to the time of completely free market competition between companies, when even various homogeneous products on the market were offered at completely different prices.
Price reduction was at that time such a basis by which every trader could highlight his goods, while attracting the attention of a huge number of consumers, thereby earning the desired market share.