The business world is very competitive and changing at a very high speed; therefore, companies must change and innovate at all times so that they can remain competitive.
Competitive marketing is the cornerstone of superiority over competitors. Companies with no competitive marketing strategy in place will certainly fall behind those that do, with effective approaches in place.
We will define in this article what competitive marketing is, types of competitive strategies, and some examples of how to build competitive marketing strategies.
What is Competitive Marketing?
Competitive marketing is the act of designing a long-term marketing strategy directed at outperforming other businesses. This, therefore, calls for an analysis of the competitors in terms of strengths and weaknesses and knowing the target market’s needs.
Some of the goals of competitive marketing are to retain the market position, create a competitive advantage, increase sales, and attain a high ROI. The importance of competitive marketing can be best described in highly competitive markets where substituted products are sold.
Competitive marketing strategy is a combination of planning and research by different tools that might include aspects such as customer support, product development, and advertising.
In competitive marketing, the company does research on its competitors and customers to know the competitor marketing strategies and customer expectations. With this information from research, the company would know the opportunities available for it, possible threats that may occur, and therefore develop an appropriate strategy that could make the company perform better than the other companies.
Companies that succeeded in business keep on the periphery of observing their competitors’ market performance, evaluate, and change the strategies of marketing.
Competitive Strategies of Marketing
There are several competitive marketing strategies and each of them basically emphasizes ways to outshine competition. Some of the common means include low-priced offers, excellent service, and unique products.
Competitive Analysis in Marketing
Competitive analysis is benchmarking your brand against others to help you understand your strengths and weaknesses and other competitive advantages. Through this study, you will know the market positions of your competitors, their sales and marketing techniques, and strategies towards better growth.
While competitive analysis opens up much-needed learning opportunities, it doesn’t mean copying competitors or slashing their prices.
The Need for Competitive Analysis:
- Identify what makes your business different and unique; or, if you’re just starting out, learn how to.
- Determine the strengths of your competitors and analyze how they achieved those strengths.
- Gather intelligence about how to measure progress and success.
- Get a better understanding of your target audience.
Steps in Competitive Analysis:
- Identify your competitors.
- Identify the products that competitors sell.
- Research how competitors sell their products.
- Learn about the competitor’s pricing and benefits.
- Analyze methods for which competitors promote their products.
- Note the content creation strategy of the competitors.
- Understand the technological platforms they use.
- Study the audience response to the competitor’s content.
- Notice how the competitor promotes his content.
- Observe the digital presence on social media and the strategies to enhance engagement.
- Conduct a SWOT analysis – What are the strengths, weaknesses, opportunities, and threats of the competitor?
Types of Competitive Strategies
Michael Porter, one of the most influential academics and economists, defines four types of competitive strategies which could be applied to any organization independent of the size or type of product. They are:
1. Cost Leadership Strategy
This is whereby a business produces at the lowest possible price, but at high quality, hence advantage over other businesses. High quality at low charges often means that production costs have to be reduced. The reduction of production costs can be achieved through a number of ways such as large-scale production or efficient use of resources. This strategy is, therefore, employed successfully by companies such as Walmart, a multinational retail corporation.
2. Cost Focus Strategy
The cost focus strategy is similar to the cost leadership strategy except that it has a more narrow target. It focuses on a particular market segment or a geographic area. The firms implementing this strategy concentrate on giving the customers in the selected market segment the lowest prices for a product or service. It aims to satisfy specific customers whose needs have not been met by the competition. For instance, Sonata Watches are the inexpensive version of trendy watches such as a Rolex.
3. Differentiation Leadership Strategy
The companies applying this strategy try to differentiate on the basis of quality products or services, thus providing them with an edge over their competitors. The objective is simply holding the loyalty of customers through value addition that none of the other service or product providers can match. Companies like Apple and Starbucks are examples of brands using this type of strategy.
4. Differentiation Focus Strategy
This strategy targets a niche market segment and offers a unique value to the customers in that particular segment. Business organizations adopting this strategy make every effort to develop a product or a service that has distinct features and is different from other products available in the market. For example, Titan, being a watch manufacturer, offers its original watches by setting gems in them so that it can cater to a niche market with exclusive tastes.
Five Ideas on Competitive Marketing Strategies
Following are five ideas that can help you come up with competitive marketing strategies:
1. Analyze Competitors’ Websites
Websites are one of the important tools of marketing for any business. Looking at a competitor’s website includes analysis of its design, usability, content, and digital presence. It will help you to understand their strengths and weaknesses and improve your own website accordingly.
2. Put Yourself in the Customer’s Shoes
Understand your competitors by becoming a potential customer to their strategies. Get on their newsletter lists, follow their blogs, and engage with their content. This keeps you up to speed with what works and what doesn’t.
3. Assess How Your Competitors Are Using Social Media
Most businesses advertise on social media. The social media presence of competitors can be analyzed by tracking their posts, audience, number of followers, and ways of attracting more engagement. The continuous monitoring of all the above-mentioned aspects allows a business to learn their trick of attracting customers.
4. Monitoring Competitors’ Website Traffic
Tools such as Semrush give insight into competitor website traffic, what keywords they’re ranking for, what kind of organic and paid traffic they have, and their top-performing pages. This information is valuable in refining the content strategy for attracting prospective customers.
5. Ask Your Customers
Regular surveys of customers as to what they think of your business, why they’re doing business with you, and what they want will help improve and differentiate from competition.
Conclusion
Competitive marketing is aimed at gaining an advantage, overcoming competition, conquering a more considerable share of the market, maximizing profits, and retaining your company’s position in the market. Monitoring competitors and performing constant analyses on their performance is necessary in order to create effective strategies for competitors.
While following your competitors is important, do not just copy them. Get inspiration from and understand what they are doing, learn from their experiences, and know their weaknesses and strengths toward building successful competitive strategies.
As a business owner, you have to be more concerned not only with what your competitors are doing but also with what new value you can give to your customers in order to be different.
