Late one afternoon, I was sitting with
For some, this rationale seemed sensible; a few nodded. However most frowned, and a few interjected. The senior marketing executive had presented a narrow view of competition that could only result in long-term damage to their brand. Competition, as best defined by Michael E. Porter in his Five Forces Analysis, is driven by customers, suppliers, potential entrants and substitute products. In the case of the sports team, what the senior marketing executive failed to see was the role sport played in customers’ lives. A rival team was not his business’ main competitor, it was his customers’ time. And everything that his customer could do with their time.
So how might a CEO identify and assess the strategic capability of their marketers in order to not find themselves leaving their main growth lever in the hands of the “we don’t have competitors” types? Based on their definition of competition.
No Competition Strategy
The worst marketers don’t recognise competition, only conversion. With these people managing your marketing, you will find rapid decline of top-line revenues.
“We’re not in competition with anyone. People know / love / want our brand, all we need to do is make it easy for them to buy. We’ve got a loyalty / CRM scheme, we just need some social media ideas”.
Portfolio Competition Strategy
Bad marketers define competition only within their four walls; competition against their own brands, services or price promotions. If you have them leading your marketing, overall revenues will shrink, with various brands shrinking faster than others.
“Looking at our product mix, I think it’s pretty good, we just need to ensure we describe and compare each product clearly. I’m thinking we change the design on our website”.
Category Competition Strategy
Incompetent marketers define it as competition against direct competitors in their category only. These people simply manage revenue decline, relying on other areas such as distribution and product to keep the company alive.
“We’re doing well against that other retailer so we’re happy. They hired an ex-Neighbours person as their ambassador. We’re looking at an ex-Home and Away person”.
Broader Category Competition Strategy
Passable marketers define it as
“We’re the number two light beer, number 15 overall in beer. Any ideas on how we might be number one light beer?”.
Out-of-Category Competition Strategy
Good marketers define it as competition outside their category, anything that could compete to fulfil that need. These people will build continuous growth for brand and business.
“If we are to sell our new bus service, we have to address competition with other forms of public service, car ownership, taxis,
car sharing, cycling, walking and other means of transport.”
Five Forces Competition Strategy
Great marketers define it as competition outside their categories, substitute products
“Let’s ensure we have the best brand, the best career path, the best products, the best distribution, the best supplier relationships, the best shareholder communications – so that anyone with an hour, a dollar, a CV or an investment portfolio anywhere in the world wants to send it to us. I’m open to any approach that can change behaviour across any area.”
Competition is Everywhere Strategy
The best marketers define it as any current or potential competition for any element of their business at any time now or in the future, locally or globally. ALWAYS: EVERYTHING, EVERYWHERE, THAT COULD EVER BE, IS COMPETITION. These people then take the various competitive elements, measure the short, medium and long term
recognisethat credit cards are only a part of the overall payment ecosystem – the future of payment opens itself up to competition from virtual currencies, mobile payment systems, debit cards and potentially even realtime peer-to-peer lending. Further, the FinTech investment market is removing barriers that could change our whole business and go-to-market model overnight, as well as potentially providing excellent returns and attracting the hype and attention of investors, so it’s important we constantly stay vigilant and evolve, ensure that our brand (memory, distinctiveness, content and behaviourchange), product (product types, innovation, relevance), distribution (access, platforms) and connections (insights, CRM, contact strategies and digital connectivity) are testing the edge. I’m open to any thinking and approach to grow our profit pool over the long term.”
If you want to grow business, broaden your view of the context and relevance that your brand plays in people’s lives. Then work with smart marketers who know and understand how to deliver within these contexts. Soon you will find that you’ve shifted the demand curve, not your point along that curve.