Wednesday, January 20, 2010
Reminder Advertisement
http://www.youtube.com/watch?v=0LnJskwydvM
Intensity of Rivalry according to Porter's model
The intensity of rivalry between competitors in an industry will depend on:
- The structure of competition - for example, rivalry is more intense where there are many small or equally sized competitors; rivalry is less when an industry has a clear market leader
- The structure of industry costs - for example, industries with high fixed costs encourage competitors to fill unused capacity by price cutting
- Degree of differentiation - industries where products are commodities (e.g. steel, coal) have greater rivalry; industries where competitors can differentiate their products have less rivalry
- Switching costs - rivalry is reduced where buyers have high switching costs - i.e. there is a significant cost associated with the decision to buy a product from an alternative supplier
- Strategic objectives - when competitors are pursuing aggressive growth strategies, rivalry is more intense. Where competitors are "milking" profits in a mature industry, the degree of rivalry is less
- Exit barriers - when barriers to leaving an industry are high (e.g. the cost of closing down factories) - then competitors tend to exhibit greater rivalry.
What Top Brands Spend on Advertising
More than 20 percent of their annual revenue or $11.5 billion.
Coca-Cola:
More than $2.5 billion.
Yahoo:
More than 20 percent of their annual revenue or $1.3 billion.
eBay:
14 percent to 15 percent of its revenue, which was $871 million, much of that to advertise on Google.
Google:
More than $188 million.
Starbucks:
Almost $95 million.
Reference:
http://www.marketingpilgrim.com/2007/10/what-top-brands-spend-on-advertising.html