3. Competition

• Definition of competition

  Competition in business is rivalry between businesses. It is a situation where businesses are competing against one another for a share in the market, and where they employ all kinds of tactics to discourage their customers from going to other businesses, while also encouraging the customers from other businesses to come to them.
• Give 3 benefits of competition for a customer

  The first benefit of competition for a customer is that businesses are forced to offer good products and service otherwise consumers will not return.

  The second benefit is that businesses are forced to keep prices down, otherwise consumers will go to buy their goods elsewhere.

  The third benefit isthat businesses will offer a wider range of products in order to be ahead of the competition.
• Explain 3 strategies a business could use to manage competition

  The first strategy a business could use to manage competition is through pricing. Businesses will keep their prices down at the same level as, or lower than, their competitors.

  The next strategy they could use is through product. Businesses will expand their range of products; make sure the quality is at least as good as their competitors and make sure they have the required products in stock.

  The third strategy is through promotion. Businesses will advertise widely and use promotional offers such as special discounts.
• Analyse the impact of competition on the marketing mix. (1/4)

  Competition is the rivalry between businesses. The situation where businesses are competing against one another for a share in the market. They employ all kinds of tactics to discourage customers to go to that business and instead encourage them to go to theirs. The marketing mix is where a business will have the right product at the right price in the right place using the right promotional methods.
• Analyse the impact of competition on the marketing mix. (2/4)


  Competition can have an impact on product as the quality of products will be kept high to attract customers away from the competitors and businesses will provide a range of products greater than that of the competitors.

  Competition can have an impact on the price of a product. A business will have to ensure that prices are not higher than competitors' prices and they may have to offer special offers/discounts to attract customers
• Analyse the impact of competition on the marketing mix. (3/4)


  Competition can have an impact on promotion of a product. A Business will have to provide constant advertising in order to attract and retain customers. They may also have to offer promotional discounts and special offers. Competition can have an impact on place, A business will have to ensure that their products are available in the store when required and that they do not run out, otherwise a customer will go to the competitor. They also need to ensure that the product is sold in a convenient place to the customer.
• Analyse the impact of competition on the marketing mix. (4/4)


  In conclusion competition will have an impact on the marketing mix as businesses will have to ensure their product, price, place and promotional methods are better than their competitors to gain the largest share of the market and become market leaders.