Men’s clothing, mobile phones which support 3G, low fuel consumption automobiles, LCD TVs... These categories, which look completely different to each other, share a common characteristic. Each one is the focus of competition in their sector and it is in these categories that competition is at its peak. Low penetration, technological developments and consumer price sensitivity fuel competition in these areas even more. Companies are trying everything in order to get ahead in the competition.
Fully comprehensive is the locomotive branch of the insurance sector. Despite this, apart from 2008, the sector has never made a profit in this sector. Moreover, in the first nine months of 2009, losses in this branch reached TL 210 million. The reason for these losses is the intense competition. Just like in fully comprehensive, there is a similar situation in consumer electronics. The category which comes to the fore in this sector is competition in the TV category, and it is at its most intense in LCDs. In white goods there is ruthless competition in A class and built-in products and in automobiles it is low fuel consumption vehicles.
The Attraction Of Low Penetration
The leading factor which fuels competition in areas where it is most intense is low penetration. For example, the struggle between operators in the GSM market, where competition has heated up as a result of 3G, is in customer-focused services, campaigns and tariff competitions. The fact that the market is not yet saturated is the reason for the increase in competition in the anti-aging products segments in skin care cosmetics.
The basic determinative factors in many sectors are consumer trends. The tendency for consumers not to postpone their needs but make decisions based on price in sectors such as foodstuffs, clothing and personal care has resulted in the shift of competition in these fields to “economical product groups”. Competition is particularly intense in economical packets, two in one packaging, medium-prices product segments and discount products groups.
In automotives, competition increases in the B segment during times of crisis and in the C group when the economy is going well.
Technology Fuels Competition
The most important factor in competition in fields such as electronics, computers and mobile telephones is the mind-boggling pace of technological change. For example, the refresh time of a TV screen has really intensified competition in this field. The same situation can be seen in all the segments of consumer electronics. The result of competition can be seen in price reductions. Prices have fallen by 20 percent since last year in mobile telephones, by 30 percent in LCD televisions and by 25-30 percent in laptop computers.