We live in a world where everyone is after everyoneís
business. And itís a world in which, if you lose your
business, you never get it back. A few numbers make the
Consider global trade as a percentage of gross national
product which is an excellent measure of the global economy.
In 1980 the percentage was about 12%. By 2013, the
percentage tripled to around 28%. In other words, about
one-third of what is being produced around the world is sold
globally. Thatís a lot of business and a lot of competition.
But what really is painful is that success breeds
competitors like rabbits. With todayís technology and
lawyers, even a patent doesnít seem to slow them down. I
once sat in a meeting where their lawyers were proudly
stating that they had gotten around, not one but, twelve
patents on a competitorís product. A little change here and
there was all they needed. This means that new competitors
will arrive probably sooner than later so you had better get
launched and get going in a hurry. But be thankful you are
not in Russia where a highly visible success can lead to
losing your business to one of Mr. Putinís friends. The rule
of law isnít what it should be in Russia.
If you look at the number of products and variations being
offered in each category from the 70ís to the late 90ís,
once again you are looking at doubling or tripling. For
example, bottle water brands went from 16 to 50, breakfast
cereals from 160 to 340, pain relievers from 17 to 141.
Whatever category you are in, you have a lot of competitors
trying to take away your business. So what do you do? Here
are some guidelines.
- Avoid strength. Attack weakness.
This is the overriding principle to staying out of
trouble. What you want to avoid is wishful thinking. But
to do this requires a change in philosophy.
The classic definition of marketing leads one
to believe that marketing has to do with satisfying
consumer needs and wants. Marketing is ďhuman
activity directed at satisfying needs and wants through
exchange processes,Ē says Philip Kotler of Northwestern
Marketing is ďthe performance of those
activities which seek to accomplish an organizationís
objectives by anticipating customer or client needs and
directing a flow or need-satisfying goods and services
from producer to customer or client,Ē says E. Jerome
McCarthy of Michigan State University. Marketing people
traditionally have been customer-oriented. Over and over
again they have warned management to be customer-rather
Ever since World War II, King Customer has reigned
supreme in the world of marketing.
But itís beginning to look like King Customer is dead.
And marketing people have been selling a corpse to top
Thatís because today, every company is
customer-oriented. Knowing what the customer wants isnít
too helpful if a dozen other companies are already
serving the same customer. General Motorís problem is
not the customer. General Motorís problem is Ford,
Chrysler, and the imports.
- Competition is the first thing to analyze in
a strategic plan.
To be successful, a company must become
competitor-oriented. It must look for weak points in the
positions of its competitors and then launch marketing
attacks against those weak points.
There are those who would say that a well-thought-out
marketing plan always includes a section on the
competition. Indeed it does. Usually toward the back of
the plan in a section titled ďCompetitive Evaluation.Ē
The major part of the plan usually spells out the
marketplace, its various segments, and a myriad of
customer research statistics carefully gleaned from
endless focus groups, test panels and concept and
In the marketing plan of the future, many more pages
will be dedicated to the competition. This plan will
carefully dissect each participant in the marketplace.
It will develop a list of competitive weaknesses and
strengths as well as a plan of action to either exploit
or defend against them.
What does all this portend for marketing people of the
future? It means theyíll have to be prepared to wage
marketing warfare. More and more, successful marketing
campaigns will have to be planned like military
Strategic planning will become more and more important.
Companies will have to learn how to attack and
to flank their competition, how to defend
their positions, and how and when to wage guerrilla
warfare. They will need better intelligence on how to
anticipate competitive moves.
Itís all about pursuing the right competitive strategy.
Itís all about understanding the four types of marketing
warfare. They are defensive, offensive, flanking and
guerilla warfare and my book entitled Marketing
Warfare explains it all.
- The mind is the battleground.
Positioning is how you differentiate yourself in the
mind of your prospect. Itís also a body of work on how
the mind works in the process of communications. (Iíve
written a number of books on this subject.) In essence,
you must deal with the fact that minds are limited,
minds hate confusion, minds are insecure, minds donít
change and minds can lose focus. The biggest competitive
mistake usually made is that of trying to be everything
to everybody in the mind. Itís one idea to a customer in
the mind and once you begin to blur up what you are, the
weaker your position becomes. This only opens up the
customerís mind for your competitor.
- Countering a price attack.
A low price is a big draw but there is an
inherent problem with this strategy. Competitors have
pencils so they can mark down prices instantly which
makes price a very bad differentiating idea. When
attacked by a low price competitor, the best counter
strategy is to push quality and reliability. This move
sets up the benefit of longevity. Paying more for a
product that lasts longer makes sense to most people. It
also puts your price competitors on the horns of a
dilemma. Adding more quality to their products only
raises their cost structure. Itís hard to be cheap and
high quality at the same time.
- Staying ahead of competitors.
The best weapon for a strong brand is ďnew and
improved.Ē You canít just sit there and become a target.
No other company in the history of marketing can match
Gilletteís efforts in the razor blade world. They are
constantly adding blades and features to products that
often replace existing products in which they have
invested heavily. Today they have over sixty percent of
the razor blade business, a number they have held for
decades. They also have very few competitors because
most have discovered that taking on Gillette can be
costly and not very productive. If there were a
competitive hall of fame, Gillette would be at the top
of the list.
- Stay nervous.
Finally, paranoia is the key to success. What I
mean is that constant diligence is critical in a
competitive world. As I said, everyone is after
everyoneís business, so a good worrier is a good
The biggest mistakes Iíve witnessed are companies that
didnít take their competitors seriously until it was too
late. The level of competition in todayís world is
exceptional and only getting better. It is truly the
survival of the fittest.
What people have to realize is that flexibility is a
necessary mind-set if you want to succeed. You canít
predict the future so you must be ready to adapt.