Substitute products are the closet industry products that form the substitute of each other in consumer perceptual mind map. Often firms in an industry face competition from the threat of it’s closest substitute products. For example, "Oneplus 6T" mobile phone may face stiff competition from it’s closest substitute products namely "Honor View 20", "Vivo Nex", "Samsung Galaxy S8", "LG V30+", "Vivo 11 Pro" etc.
The competitive pressure, OnePlus6T may face, depends primarily on three factors:
- Whether the substitutes available are attractively priced
- Whether buyers view substitutes available as satisfactory in terms of their quality and performance
- How easily buyers can switch to substitutes
1. Price comparison: OnePlus 6T is priced above it’s substitutes Honor View 20, Vivo V11 Pro and LG V30+. However, it is priced below it’s substitutes Vivo Nex and Samsung Galaxy S8.
| Product Name |
Price (INR)* |
| Vivo Nex |
39,999 |
| Samsung Galaxy S8 |
37,990 |
| OnePlus 6T |
32,999 |
| Honor View 20 |
29,999 |
| Vivo V11 Pro |
25,900 |
| LG V30+ |
24,999 |
*Above prices are just indicative prices that were taken at one particular snapshot of time. Thus, these prices are subjected to change. These are taken purely for learning purposes.
2. Quality & Performance:. Let us now compare quality attributes of product substitutes. These attributes are subjective and varies from survey to survey. These are taken purely for learning purposes and may vary from time to time.
| Vivo Nex: |
| Pros |
Cons |
| Gorgeous Display |
Heavy |
| Notch-free |
|
| Pop-up selfie camera |
|
| Battery backup |
|
| Samsung Galaxy S8: |
| Pros |
Cons |
| Compact |
Battery backup |
| Great camera |
|
| Excellent display |
|
| Water and dust resistant |
|
| Honor View 20: |
| Pros |
Cons |
| Trendy design |
No microSD card slot |
| Powerful chipset |
|
| Camera performance |
|
| Headphone Jack |
|
| Vivo V11 Pro: |
| Pros |
Cons |
| Display |
No USB Type-C port |
| In-display fingerprint sensor |
|
| Dual 4G VoLTE |
|
| Dedicated card slot |
|
| LG V30+: |
| Pros |
Cons |
| Premium design |
No portrait mode |
| Wide angle dual camera |
|
| Military grade built & water resistant |
|
| OnePlus 6T: |
| Pros |
Cons |
| Ergonomic design |
No water resistant certification |
| 6.4-inch AMOLED screen |
No Audio Jack |
| 6MP selfie camera |
No LED notification light |
| Battery backup (3700mAh) |
|
3. Easy switch to its substitutes: It's all about how easily buyers can switch to it's substitutes. Now a days, we see aggressive promotion campaigns where competitors offer buy back program where they pay high prices for it's substitute products.
Generally it is observed that the availability and acceptability of substitutes determine an upper price limit to a product. When relative prices of the product in question rise above that of the substitute products, customers tend to switch away from them.
Continually, our products have to sustain and improve upon customer goodwill (and thus market share) from time to time through their apt customer service, periodic software updates and less maintenance costs. Also, effective implementation of relevant and appealing marketing plans for our products make a great difference in sustaining the competition from it's substitute products.
