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By Jean McIntyre (Marketing Angels)

Is competition something to be feared, ignored or confronted full on.  Jean Mc talks about the nature of business competition and ways that marketers can help businesses deal with this inevitable consequence of success.

I was reading in the Canberra Times on 28th February about the demise of Brand Depot and DFO. Both it seems are in danger of closing and certainly both have seen a mass closedown of tennant stores.  They put it down to both the GFC and development and upgrading of other shopping centres in the region.

Wikipedia defines competiton in economics as: ” the notion of individuals and firms striving for a greater share of a market to sell or buy goods and services.” Surely with words like “individuals”, “striving” and “share” this can only be considered a good thing.

Certainly Wikipedia goes on to say that economist consider competition to be a healthy thing (as did my economics lecturer at UC) because it promotes “consumer soverienty”.  This means that the greater the competition – the more choice and control that consumers have.

Competition is a good thing – really!

It usually means that prices come down which (in a narrow way of thinking) is less good for businesses than it is for consumers.  The good thing for businesses about competition is that it tends to keep us focused on our brand and continually innovating new products and ways of promoting them to keep our place at the top of the market.

In short – when the customer is king then it makes sense for businesses to think about newer and better ways to meet their needs.  That folks is the essence of marketing.

Dealing With Competition

I talk about competition a lot when I go around the Capital Region talking about marketing.  It’s not that easy to understand.

In some ways, your business is in competition with my business and every other business that people might spend money in.  If we agree that consumers (business, Government or household) have a limited amount of money in their pockets to spend – and even less discretionary money to spend – then in this way each business competes with every other for this money.

Plumbers compete with gymnasiums, with supermarkets, with financial planners and with charities for all the money that households have to spend.  This is probably how accountants see it.

How to Have No Competitors

Marketers see it a different way.  Marketers start with fully understanding the needs of the target market (through research) and how your business could best meet them.

A marketing savvy business works out how their unique resources (skills, knowledge, people, technology, experience etc) can be packaged together to meet the needs of the target market in a way that no other business can match.  Promotion of the business then becomes about building a desire in the market to have their needs met in this way.

An example

Mary has a shoe store.  She conducts some research about how her market feels about shoe shopping.  She discovers that her potential customers look forward to shoe shopping as a way to relax and make them feel special.  With a bit more research, staff input and some customer feedback – she develops a ‘Valet Shoe Fitting Experience’ where customers can come and relax, mingle, drink and eat and have a customer care specialist give them individual attention.

Mary found that women in her market were prepared to pay a premium price to have their special needs met in this way.

You might say “but not every woman would find that appealing”.  That is the whole point.  Mary has specifically targeted a small section of women with specific tastes and values and put all her resources into serving them better than every other shoe store.  Of course she did sufficient research to identify whether there were enough women fitting in to this niche group to be able to support her business.

In this way – having created a need for this valet service among her market – Mary  has removed all the other shoe stores from her competition.  She simply has no competitors in this market.

Research is the Key to Removing Competition

If you would like to be like Mary and remove the competition then the place to start is with research.  You need to research these things:

  1. Characteristics of your target market (size, income, location, age, spending habits etc)
  2. Values of your target market (what’s important to them, what do they put a premium on?)
  3. What they need (needs and desires – fears they want to allay)
  4. Where are the gaps in the market?  (Who is meeting these needs and who is not – how are they positioning themselves?)

Once you have a good understanding on what the market needs you can then start to develop products (goods and services) that meet their needs better than other businesses and start to eliminate your competition.

Marketing Angels can Help with Research

If you need help to understand what makes your target market tick – contact Marketing Angels for expert help on marketing research.

I’d be interested to hear about your experiences with competition and how you have managed it successfully.

Jean Mc

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