Threat of Substitute Product

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Hi. Firstly, thank you and welcome to our Marketing Plan blog. Especially to newcomers. In case if you don't read the last post, now I have briefed you on our company Industry Analysis. Industry analysis is part of the Situation Analysis which has another two-part which are Competitor Analysis and Customer Analysis.

The threat of substitute product studies about how easy it is for the consumer to change from a brand to another brand. It is because there are dumping of product alike on the market. The switch process is most influenced by the quality of the product and the prices. The threat of substitute includes a number of substitute product available, buyer’s propensity to substitute and switching costs.

In order to fulfill customers' demands, there are a variety of scarves have been designed such as square scarf as a traditional one, shawl or turban. The price of a piece also can differ due to the total supply chain cost that the company needs to bear in order to ensure the good quality of their products. The existing of similar products in the market increases the propensity of customers to switch to alternatives. Switching cost may be lower because it does not involve a large capital. As to conclude, the threat level of substitute products can be categorized as high.

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