Showing posts with label competition. Show all posts
Showing posts with label competition. Show all posts

Wednesday 17 May 2017

How to compete alongside the competition…When growth in flat-line can only come at the expense of competitors

With product, company and customer all going through different stages of different lifecycles, and the competitive profile changing in respect of all three, simultaneously, in a flat-line demand environment, it is little wonder that companies are tempted to evolve a policy of ‘ignoring’ the competition and marketing to a customer as if it were the only route to the consumer, with each customer receiving this ‘exclusive’ treatment in the name of a ‘tailor-made’ approach.

Moreover, given the consumer’s current degree of media and data saturation, it has become increasingly difficult to help the consumer to appreciate the subtle differences in a brand’s ability to meet individual need better than the competition.

These difficulties can be compounded by a fixation upon the competitor, amounting in some cases to face-to-face confrontation, with the only result being a dilution of energies and reduced focus upon the satisfaction of consumer need.

The competitor is not, and should not, be treated as the enemy. Each is competing for the mind of the consumer, and a focus upon consumer perception of the available alternatives will be more productive in terms of the optimisation of supplier resources.

Thus competing alongside, within a realistic acknowledgement of the competitor’s relative appeal, will be more productive. The supplier is thus merely using the competitor’s offer as a reference-point, focusing upon usable differences and then demonstrating to customer and consumer how the brand offer can more effectively meet the target consumer’s need, cost effectively.  The emphasis should be upon how one can capitalise upon the short period which a market allows before a better, cheaper, more effective alternative offer is thrown up in opposition…

Incidentally, if a competitor fails to emerge as a threatening alternative, a more fundamental question has to be asked regarding the assumed ‘unique advantage’ over the competitive offering in attempting to meet real need in the marketplace…

In expressing the offer to the customer it is only realistic to bear in mind that the buyer is merely interested in maintaining a competitive advantage over other categories and departments, and perhaps with other retailers in a macro sense. The buyer wants to maintain a fair-share balance within the category that is generally ‘right’ and allows the category to compete as a whole with other categories and with other retailers’ version of the category as part of the total shopping experience.  The buyer should not be expected to operate at SKU level. It is therefore a pity when availability shortfalls provide a negative trigger that detracts from appreciation of the overall proposition.

Within this set of priorities, expressions of ‘petty’ differences between brand propositions become a waste of effort and are ineffective in terms of providing a basis for securing instore compliance.
Equally, it is important to keep the buyer focused upon the category within a total aisle experience versus that of competing retailers. Again the emphasis should not be upon merely copying or attempting to neutralise the competing retailer’s approach, but instead, the competitor’s offer should be used as a reference point from which to establish a ‘unique’ shopping experience, instore.

Focusing upon getting the Marketing Mix basics right will then allow the supplier to take advantage of inevitable out-of-stocks, changes in brand-switching rate by consumers and any performance shortfalls of even the most daunting of competition, within an agreed ‘fair share’ balance of brands and own-label in the retailer’s version of the category.

On balance, competing successfully is less about seeking and exploiting ‘secret’ information or matching a competitor’s moves blow by blow, and more about identifying real points of difference between perceived alternatives available to the consumer wanting to satisfy a need.

Success is then about meeting that need faster and in a more effective manner than the competition, operating alongside comnpetitors, SKU by SKU, in the aisle….

Friday 10 April 2015

The CMA investigation of Poundland’s takeover of 99p Stores - a retro, redundant exercise in cut-priced, hyper-competitive British retail?

Over at The Telegraph, Graham Ruddick reports that the Competition and Markets Authority's analysis could result in the closure of 33% of the 99p stores, thereby jeopardising the deal...  He also points out that the UK consumer now has unprecedented multichannel access to choice via discounters, major mults and the Internet.

This makes consumers less vulnerable to abuse by anti-competitor behaviour.

We would simply add that where market information flows freely, competition plays a regulatory function in balancing demand and supply.

In other words, the emergence of price comparison tools, at home and in-store, has helped to create a state of almost perfect competition in the UK, where the role of the CMA is in danger of becoming redundant, unless little £1 sparks of initiative are damped down at birth...

If fact, in the current real world, could the CMA initiative be deemed anti-competitive?