Identifying Competition: An Essential Element of Marketing

All industries are growing at a rapid pace with emergence of more and more companies. For a company to exist in this race, it needs to mark its presence and grow at the same time. Knowing competition for a company and accordingly positioning the products is something businesses are concerned with today.

Listing Competitors

To get a clear idea of the differentiated positioning the company needs to identify its potential competitors. A thorough analysis of the competitive products, their features, strengths and operational excellence would give the company a clear picture of the market operations and the trends. Understanding the value proposition provide companies a sustainable competitive advantage which can be utilized in attracting customers from the competitors.

In the process of identifying competitors the company should consider the product, substitutes, technological challenges, new entrants, old established brands. Future competitor analysis also plays an important role in creating a brand presence in the market for a product.

 

How to Identify Competition?

With the help of senior management direction and insights the company can have a better picture of the competition in the market existing for its products and services. Also from the market research reports and information published by the competitors help in identifying the details of the competitors and their ways of operation.

In order to understand the competitor in the market for a particular product the several analysis are to be carried out such as future competitive analysis, marketing research and meetings and discussions with industry leaders and experts. Understanding the emerging technologies, new entrants and actively scanning the industry gives a complete idea of the competitors and their structure and functioning. A SWOT analysis of the available list of competitors also gives a fair idea of the trends the competitors following and can help in improvising the products of the company and expand the customer base.

Every business that we see today is part of one or the either industry. With the moving pace and increasing consumer demand the business are expanding. Competition is something which has always been there and shall exist till ever. To find a way out and present the product in a better way in comparison to the competitor’s product is every business’s requirement and they should be focused towards it. Identifying competition empowers the business and gives scope for improvement, which enables it to prosper.

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Lyft, Uber and the Rise of the Smartphone Economy

While covering the 2016 International Consumer Electronics Show in Las Vegas, Molly Wood, senior tech correspondent for National Public Radio’s Marketplace, half-jokingly stated that the real “big story” to come out of the renowned conference was not a cool new gadget, but rather the arrival of Lyft and Uber, two of the world’s largest ride-sharing services, to the streets and porte-cochere of hotels all over the city. According to Wood, Las Vegas was the “last bastion” of official taxicabs, which had in years past been the bane of many conference goers; cabs being too few and wait time being too long.

The city’s cab companies’ final acquiesce to ride-sharing is a prime example of the rise and power of what could be referred to as the smartphone economy, or an economy made possible by the advent of smartphones. Companies like Lyft and Uber owe much of their success to the technological game changer, which allows for instant communication between users in addition to many other benefits such as Internet connectivity, etc.

As noted in the SMstudy® Guide’s first book, Marketing Strategy, disruptive technology such as smartphones need to be considered in a company’s product strategy. Basing a business on a technology such as smartphones makes it necessary to pay special attention to developments in that particular technology and continual assessment of evolving risks and opportunities for strategic innovation.

The book explains, “Rapid changes in the Internet, e-commerce, telcom, social media, and clean technologies can be very disruptive for existing companies in these fields, but can also generate significant opportunities for innovation.

Another significant factor in the rise of ride-sharing services in the United States is the decidedly anti-ownership mentality of its largest population cohort: Millennials. According to a recent report by Goldman Sachs titled “Millennials- Coming of Age”, “access not ownership” is the Millennial mantra.

The report states, “Millennials have been reluctant to buy items such as cars, music and luxury goods. Instead, they’re turning to a new set of services that provide access to products without the burden of ownership, giving rise to what’s being called a ‘sharing economy’.”

Having a clear understanding of market trends, especially trends related to large demographic groups is also essential for any business hoping to find a home in the current and future economies.

Again, Marketing Strategy includes understanding market trends as one of the six components of a market analysis. In addition, as in the example provided here, data on a specific cohort or demographic can be beneficial when conducting a PESTEL analysis as it can satisfy the “S” or Social Factors of the analysis.

The book states, “social factors reflect the social and cultural state, attitudes, and behaviors prevalent in a market. Changes in these factors may impact the demand for a particular product or product category.”

Ride sharing is disrupting the long-held position of the taxicab industry and if Goldman Sachs’ prediction is correct, the larger idea of car ownership in the United States will most likely be disrupted as we move forward. Tectonic shifts in the US economy are here or on the horizon, and much of it hinges on the accessibility and connectivity smartphones provide.

The Truman Show: A Reflection on Product Placement


In the 1998 film The Truman Show, a man named Truman Burbank, played by comedian actor Jim Carrey, stars in the ultimate reality show. At the film’s onset we learn that Truman is the first person to be adopted by a corporation and that since the time of his babyhood, Truman has been used, unbeknownst to him, as the star of his own real-life reality show, a show that entertain millions of viewers worldwide  as it unfolds in real time.

But there are other stars with whom he unknowingly shares the show; the ceaseless parade of products cleverly woven into the artificial tapestry of the stage set Truman calls home.

With no way to break for commercials, since the show is live 24/7, product placement is the obvious choice for advertising. Snatching at any opportunity to slip in a plug for gardening sheers or vegetable peelers, Truman’s family and friends (all actors) awkwardly discuss the merits of wares and services within the program. Everyone is “in the know” on the embedded product “advertisements”, everyone except Truman. He moves through his staged world unaware of the exaggerated enthusiasm with which his “friends and colleagues” discuss a certain beer or truck.

The film’s director, Peter Weir, uses the film as an opportunity to turn the camera on itself and satirically question the part product placement plays in Hollywood. In The Truman Show, Weir is clearly reflecting the reality of the ascent of product placement in films in the 1990s, because although product placement has been seen in film since the early 20th century, the golden age officially began with the release of Spielberg’s ET in 1982. Anyone remember Reece’s Pieces?

It’s been observed that over the last few decades we’ve seen an increase in the amount of product placement in both films and television according to Dr. Mary Lou Galician.

In her book, Handbook of Product Placement in the Mass Media: New Strategies in Marketing Theory, Practice, Trends, and Ethics, Galician states, “What is most important regarding the evolution of product placement is the increasing number of high-involvement placements found during the 20-year period of the study. These high-involvement appearances nearly doubled from 1977 to 1997, further indicating that product placement has become an integral aspect of making Hollywood movies.”

So, what does this mean for marketing strategy?

As Dr. Galician points out in her findings, which cover a 20-year analysis of Hollywood films, product placement is on the rise. This will mean continued opportunity, but also continued competition and possibly threat. The SMstudy Guide, Marketing Strategy book states that opportunities and threats should be determined before embarking on a marketing campaign. In considering product placement as a marketing option, opportunities may include reaching a larger or more responsive segment of the market. Threats may include negative backlash or a company may simply find they are priced out of that particular avenue for marketing their product.

Additional opportunities may arise in the growing opportunities for other film-related product marketing. Dr. Galician notes that there has been a rise in product “tie ins” and “cross promotion” creating more marketing opportunities and greater integration between film and consumer products and services.

As stated in Marketing Strategy, first book of the SMBOK (or SMstudy Guide), potential innovation should always be considered when planning a marketing campaign. New and innovative ways to integrate a product with a film or television show are in continual research and development.

Would you like a Warranty for That Explosive Device?

Every year when the holiday season rolls around people take a glance at their bank accounts and ponder what exciting technological gadget will be released just in time for the shopping rush. This year it was hoverboards. There was just one problem… they are known to catch fire and burn down houses.

The hoverboard of today is actually just a two-wheeled self-balancing motorized scooter, but that is a mouthful, so hoverboard it is. And most importantly, the boards will not levitate like Marty McFly’s, but they may spontaneously combust.

To date there have been ten recorded instances in the United States in which hoverboards have gone up in flames. Most of the fires did not cause any real damage, no fatalities, except to the board of course. However, a hoverboard is currently suspected to be at fault for the burning down of a house in New York.

The reason for the fires is the lithium battery. After the first hoverboard was released, dozens of companies popped up selling their version of the product. The only problem is that if the battery isn’t connected to the wiring correctly it will explode, causing a very real firework show. Major distributors of the product, such as Amazon, pulled numerous hoverboard brands from shelves due to incorrect wiring. Amazon released a compliance statement, “Manufacturers must provide documentation demonstrating that all hoverboards you list are compliant with applicable safety standards, including UN 38.3 (battery), UL 1642 (battery) and UL 60950-1 (charger).”

Name brand hoverboard companies such as Swagway and Razor have applauded Amazon for their initiative. The cheap generic brands with the faulty wires were bad seeds and needed to be eliminated, but the question is, what do the name brand companies do to regain faith in their product?

According to the Marketing Strategy, Book 1 of the SMstudy® Guide, “Risk-Sharing Pricing is a strategy that businesses may employ when there is a potential for consumers to avoid buying a particular item because of a perceived risk associated with the product. In a risk-sharing pricing scenario, the seller shares some of the risk with the buyer or takes on all of the risk to induce a favorable buying season.”

Razor has stated that their batteries are manufactured by Samsung, a very reliable brand, but to ensure safety, they include a warranty with each hoverboard sold. In this case, the buyer is still expected to undertake some sort of risk, but hoverboards are worth it, right?

Swagway’s hoverboard is built with plastic rather than metal, so the hoverboard is sold for the low price of $399 dollars. When the majority of hoverboards are in the 1,000-dollar range, $399 looks very reasonable. The company is selling a cheaper product that appeals to the same buyers that were looking to purchase the less expensive generic brand, but still follows the safety standards. In this case, the seller is taking on all of the risk, but is also assuring the consumer that the product is a safe alternative.

Most people would think that Swagway and Razor would want to go out with a bang, but in this case, reliability works.

Mac v. PC: Distinct image, Distinct Choice

When purchasing a computer, a person will most likely ask themselves; Mac or PC? Well, in 2006 Apple released a series of commercials addressing that very dilemma. The “Get a Mac” campaign made the answer to that question crystal clear. The commercials starred Justin Long as a laidback Steve Jobs look alike personifying a hip Mac computer. The Mac (aka Justin Long) paints the picture of a PC as a nerdy and awkward member of a cubicle farm, but in a nice way.

The commercials were very funny and cute, but were also aggressively competitive. The kind-hearted Mac always turned out to be the good guy, letting the poor sad PC know that even though he was better when it comes to pictures, video, and music, you know… “iLife,” he does confess that PC still has a great app… its calculator.

According to Marketing Strategy, Book 1 of the SMstudy® Guide when forming a brand, a company should, “create a distinct image of a product or range of products in the customer’s mind.” Apple stepped out of the box to provide the public with not only an image, but a personality as well. Mac is a hip young man that promises to be reliable and live up to his promise. Apple took it a step further by also creating an unflattering image for their competition, a drab looking computer that will most likely malfunction or freeze at any point in time.

Prior to the “Get a Mac” campaign, Apple’s sales were on a steady decline while PC’s dominated the market. Apple noticed that while its sales were low, they were voted higher in an American Consumer Satisfaction Index survey. . So, the company decided to play to their strengths, and PC’s weaknesses.

According to Marketing Strategy, Book 1 of the SMstudy® Guide, “The image communicates the promise of value the customer will receive from the product or products.” The image of Justin Long promised creative freedom as well as reliability because that is exactly what Mac computers are known to be. The majority of PC users are aware of the malfunctions that often occur, but Apple wanted to drive the message home to the general public in order to promote its brand. One of the biggest issues with PC’s is their lack of creative control, which is something that Mac’s excel in.

This created an instant increase in sales of 12 percent in the first quarter and by the end of the fourth quarter sales had increased by 39 percent. In fact, sales increased so much that Microsoft launched a rebuttal commercial, thinking that they could use the same format of commercial and be just as successful. Unfortunately for the company it wasn’t the commercial that sold the product, it was the product itself.

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Jet Streamlining: Southwest Style

Early in the life of Southwest Airlines key success factors were identified that propelled the startup airline to become the number one domestic carrier in the United States.

For Southwest, key success factors were a commitment to efficiency in all aspects of the company and the fastest turnaround time of any airline. This allowed Southwest to log more flight time which meant more profit compared to other airlines that maintained longer ground time.

Over time Southwest has managed to keep to these simple key success factors and has seen sustained growth over its 45-year history. A true success story considering the airline industry is notoriously dicey and many run afoul and end up taking major losses or worse, bankruptcy.

Discussed in Marketing Strategy, the first book of the six-book SMstudy Guide, key success factors are one of the six components to be considered when conducting a market analysis.

The book states: Identifying key success factors helps an organization focus on existing strengths that have contributed to success and seize opportunities that can give it a competitive advantage. Such factors might include accessibility to essential resources, distribution channels, patents, operational efficiencies, technological superiority, and so on.

The other five components include: assessing distribution channels; cost structure analysis; understanding future growth rate; market trends and knowing the market size.

A thorough analysis of the airline industry allowed Southwest Airlines founder Herb Kelleher and team to clearly identify what they were up against in regards to the industry’s pros and cons and where efficiencies could be incorporated to the benefit of both the company and its customers.

http://smstudy.com/Article/jet-streamlining-southwest-style

The Campaign Your Campaign Could Win Like

Old Spice was in dire need of a revamp in order to resurrect its failing company in 2010. Old Spice hired the agency Wieden+Kennedy to help them compete with hipper brands—such as Axe—to appeal to every man rather than just “old” men.

According to Marketing Strategy, Book 1 of the SMstudy® Guide in order to launch a successful marketing campaign you must “Identify the competition, create a differentiated positing statement for the product, and select the target market segments.” Old Spice accomplished their face-lift by doing just that.

The “Smell Like a Man, Man” campaign debuted during the 2010 Super Bowl, with Isiah Mustafa as the face of the brand. Mustafa teased the female audience in “The Man Your Man Could Smell Like” commercial, associating Old Spice with luxury and the “perfect man” (obviously, see image below). The commercial spread like wildfire through all platforms of social media thanks to its humorous and entertaining monologue. The initial video gained more views in 24 hours than President Obama’s presidential victory speech.  Three months after the commercial aired, sales had increased by 55 percent. Old Spice followed up with several commercials in the coming months and they all had one thing in common, they all began with hunky Mustafa saying the line, “Hello ladies” making it crystal clear that he was comparing himself to “their man.”

Due to the campaign’s success, the Old Spice YouTube channel is both the number one most subscribed to and the number one most viewed sponsor channel. The initial video gained more views in 24 hours than President Obama’s presidential victory speech. Building on its success, Old Spice decided to venture in a new direction of marketing—fragmented new-age marketing. According to Marketing Strategy, Book 1 of the SMstudy® Guide, “While mass media marketing is less targeted and primarily focused on affecting emotional attitudes about the brand, new-age marketing is data-driven and more focused on driving specific calls to action by engaging.”

Old Spice took to social media to generate even more publicity by tweeting, “Today could be just like the other 364 days you log into Twitter, or maybe the Old Spice Man shows up @Old Spice.” And show up he did. Mustafa soon appeared on Twitter responding to tweets in near-real-time videos. Within two days, Old Spice released more than 180 “shout-outs,” that were scripted, filmed, and posted online within 15 minutes of the initial Tweet. Old Spice specifically responded to questions posed by celebrities and others with large networks to not only maximize reach, but also to target those who have credibility and influence over social media users.

Old Spice’s Twitter following increased by 1,000 percent and the commercial received more than seven million views in one week alone, making it the fastest growing interactive campaign ever. Wieden+Kennedy breathed new life into a crotchety old brand, and Old Spice—and all the ladies—couldn’t have been happier.

http://smstudy.com/Article/The-Campaign-Your-Campaign-Could-win-Like