KNOWING YOUR (HIDDEN) COMPETITORS
Every marketer believes s/he knows who the competition is. But many tend to only recognize the most visible competitors. Hidden from our focus are other important competitors that can undermine your brand’s growth potential or, worse yet, steal market share and growth from it.
The Usual Suspects
Who’s your competition? Let’s start with the usual suspects. This leads us to our Standard Of Identity, class of drug or category competitors. These are the legal, regulatory and/or manufacturing classifications and labels. For example, Coca-Cola is a CSD, which stands for “carbonated soft drink.” The former significant pharmaceutical brand Lipitor is a “statin.” And, AcrySof ReStor IQ Multifocal is a brand of Advanced (i.e., premium, added-value) IOL or “intra-ocular lens.”
One would logically conclude that Coca-Cola’s only competition is other CSDs. And, Lipitor’s only competition is other statins. So, it goes without saying that AcrySof ReStor IQ Multifocal brand’s only competition is other Advanced IOLs. Right? Not exactly!
Your Market Competitors
Your market competitors go beyond the Standard Of Identity, class of drug and category competitors. It is everything the customer can use to substitute for your brand. Back in our days at the Coca-Cola Company we viewed our (targeted) competition as not just other colas, or all CSDs, but also other beverages. We were competing for “share of stomach,” not just share of CSDs. We sought and gained volume from coffee, milk and water too! We wanted to grab a greater share of the 180-gallons or so of “total liquids” that adults consume per year.
Lipitor’s competition, prior to going generic, had been more than statins. Vytorin, another cholesterol reducer is comprised of two compounds, only one of which is a statin. And Zetia, a stand-alone brand (and also the other compound in Vytorin), is not a statin yet competes in the same market. And, certainly Lipitor targeted diet and exercise, when neither or both were not enough to reach healthy cholesterol levels.
The AcrySof ReStor IQ Multifocal brand’s competition is not just advanced IOLs but also regular IOLs (i.e., those economy lens that do not provide added value of spectacle independence). It is also Lasik surgery.
|Coca-Cola||CSD||Other CSDs and liquids such as water, coffee, milk, juices, etc.|
|Lipitor||Statin||Other Statins, Diet and/or Exercise, Vytorin, Zetia, OTC Supplements|
|AcrySof ReStor IQ Multifocal||Advanced IOL||All Other IOLs, Monofocal Lens, Lasik|
Your market is everything your target-customer can substitute for your offering. And, it is everything from which you source volume, not just your category of products.
Your Mental Drawer
Consider this, you wake-up from a fretful night of sleep with lower back pain. You have a full day ahead of you and know you cannot afford to remain in bed. You’ve got to get out of bed and get going. Now reach into your mental drawer. That’s where you have all your options for dealing with this situation, your “evoked set.” What products might you think to use to give you temporary relief from your back pain? Here are some:
- Oral OTC analgesic such as Tylenol, Advil and Aleve
- Prescription analgesic such as OxyContin (let’s not go there or we are likely to land back in bed!)
- Topical analgesic such as Tiger Balm or Ben Gay
- Mustard Pad (does anyone use these things today?)
- Analgesic Pad (such as Icy Hot)
- Take a steamy hot bath, with Epsom Salt
- Get a massage
- Perform some stretching exercises … and so forth.
You might even use more than one product or remedy. For example you may swallow an oral analgesic, take a long, hot bath with Epson Salt, and apply a Mustard Pad. It is important to know what products your target-customer considers and uses that substitute for and/or complement yours. This will enable you to determine your market, identify your competitors (those that replace your brand or displace its usage) and target where you can source additional growth.
External Hidden Competitors
Now we have to consider competitors who are not part of your market. These are competitors who are outside of your industry who may come into it in the future. They can be the most disruptive because they usually bring advanced technology and/or don’t play by the same set of rules as you or others in your market. Apple is a good example. Their introduction of the iPhone changed the mobile phone industry for both consumer, and business use. Apple also changed how we buy, listen to and consume music. They were an outsider to the music industry but are a major player today.
If you’ll indulge us for a moment, we’d like to offer another competitor of sorts. That’s doing nothing or doing the same old stuff (out of habit or comfort). We find it frequently in health care, where health care professionals will stick with the old ineffective Standard Of Care so as to avoid doing harm or, worse yet, watch and wait (referred to as “active surveillance”), despite the introduction of more efficacious and/or tolerable treatments. We suggest treating these actions (and inactions) as competitors since they represent choices that do not favor our brands. We must focus and find ways to deal with them if we are to realize our brands potential.
Your Internal Hidden Competitors
One might say all products that are outside our Standard Of Identity, class of drug and/or category competitors are hidden competitors. Also, those future products that originate from companies outside our industry along with those practices such as “active surveillance,” or sticking with the old Standard Of Care, may be considered to be hidden competitors. But there is one more. This one is right under your nose. And, it’s stealing precious company resources from you. Resources you could put to work to achieve your business objectives. Do you know who it is? The most hidden of your competitors are not external to the company, but internal. They are the other brands in your company’s portfolio of products!
Senior managers deal with limited resources. Just as you never seem to have all the resources you need, neither do they. So, they don’t distribute funding for marketing support equally (or should not!) to all sectors, brands, geographies and marketing mix elements within their portfolio. They must determine, what sectors they will invest in to drive company growth and shareholder value (is it pharmaceutical, consumer or medical devices for companies such as Johnson & Johnson?). Then it comes down to what brands are priorities within each of the sectors. And, we must consider what geographies. Going deeper yet, choices will be made regarding specific marketing mix elements. Senior management, your company, cannot invest in everything! Yes, we not only have external competition but also internal competition for funding and support. And, our ability to gain that funding and support significantly influences our ability to be competitive with those products that constitute our market, or may impact us adversely.
Management’s decision regarding what, who, where and the degree in which to invest will depend upon a few critical factors: future growth prospects, return on investment and, importantly, confidence in you. Yes, confidence in you is a significant factor. Senior managers will approach funding and support in a way that is similar to the way professional investors select stocks. Namely, they will consider the potential for growth and return on investment. And just as the savvy investors go with well-managed companies, your senior managers will also make investment decisions based upon their confidence in the marketer presiding over the brand being able to realize the brand’s potential.
Successfully Competing Against All Competitors
What then constitutes a sound investment prospect that can successfully deal with all competitors, internal and external? Here are some favorable competitive factors that influence investment in your brand and its ultimate success:
Favorable Competitive Factors
|· Growth category or segment
· Strategic importance to the company
· Meaningful differentiation versus competition
· Favorable lifecycle
· Pipeline of product, packaging and marketing innovations
· BIG Ideas
· Proven ROI
· Strong growth rates and prospects
· High levels of customer satisfaction
· Highly favorable margins
· Confidence in your ability to realize the brand’s potential
– Sound MBO (Marketing By Objectives) Plan
– Thought Leadership
– Proven track record of successes
Actions for Targeting Your Competitors
Here’s how to target all relevant competitors to maximize sales volume:
- Identify your competition– Get beyond your Standard Of Identity, class of drug and/or category competition to identify all the products your customers use to substitute for your offering, and from which you source volume.
- Consider “overlooked” competitors– These are those outside of your category, as currently defined. They are the ones that can cause your brand to suffer the most since they will leverage one or more of their unique strengths and play by an entirely different set of rules (i.e., operating principles). This makes them so very formidable.
- Recognize internal, previously hidden competitors and deal with them– Be mindful of internal competition. Your and your brand’s performance prospects must be more attractive than theirs to win the resources you need and, ultimately, afford you the opportunity for success with external competition.
Seek out and be mindful of all competitors, including the overlooked and hidden. Get competitive to make your marketing matter (more)!
Richard Czerniawski and Mike Maloney