 The
ABC’s of Marketing - A Look at Competition &
Differentiation - Part 2
By Angela Mullan
Marketing is not just about advertising; if it were, then your sales
would increase every time you ran an ad. In fact, advertising is only a very
minor part of marketing. Marketing is about growing your business and
expanding your revenues through a well-thought out, well-researched plan. A
good marketing plan will help you articulate the value of your products or
services and will help you understand the competitive landscape your
business operates in. Without it, you’re guessing or relying on your
intuition - which may work, but may take longer than necessary to help you
succeed.
In Part 1, we looked at your business’ strengths, weaknesses, threats and
opportunities, as well as the customer markets you serve. In Part 2, we
examine competition and differentiation.
C is for Competition - Which businesses are serving the same customer
group(s) as your business? Think beyond the obvious competitors. If you are
a florist, your competition might include the local grocer with the in-store
floral department and the balloon bouquet business that advertises in the
newspaper. Ask yourself: Who are my closest competitors? What are their
strengths and weaknesses? What products and services are they offering that
are the same or different as mine?
To find the answers to these questions, you will need to conduct some
competitor intelligence. This involves finding out information through
inexpensive and easy methods such as reviewing competitors’ websites and
brochures, staying tapped into your industry network or association and
reading newspapers or trade publications for announcements competitors make.
Ask your customers and suppliers what competitors are doing. Attend
tradeshows and collect the competitor’s sales literature. Buy competitors’
products and assess their quality and features. Sizing up the competition
gives you a more realistic view of the market and allows you to identify the
opportunity that will give your business a competitive advantage - the edge
that differentiates your business and makes your company unique.
D is for Differentiation - Now that you’ve analysed your business and
conducted some research into potential business segments and competitors,
you can identify your differentiation. What sets you apart from others? Do
you serve a niche market? Are your products and services unique compared to
your competitors? Are you the low-cost provider or are you offering a
premium brand?
This differentiation should become obvious to you as you work your way
through Parts 1 and 2 of this article and should form the foundation for
your strategies around the 4 P’s: position, placement, promotion and price.
1) Position - How do you want your customers to perceive your products and
services? Are you a premium brand or the low-cost alternative? Are you
provincially-based or global? Your customers are not buying a product or
service from you; they’re buying benefits. Show them the value of your
product or service by showing what’s in it for them. This is called a value
proposition, and determines your positioning strategy.
2) Placement - How will you sell your products and services? Through
storefront, website, sales people, catalogues, or independent distributors?
Will you use a different method for each type of customer? Are the methods
you are using now reaching the customer segments you’ve identified as your
primary, secondary and tertiary markets?
3) Promotion - How will you advertise and market your business through
newspaper ads, direct mail, trade shows, TV or radio commercials? The
promotion strategy should suit the business segment(s) you identified
earlier and, ideally, should involve more than one type of advertising. Your
promotion must stress the one thing that your business does better than
anything else, and your marketing must be created so that this message can
be reduced to a single sentence.
Whichever advertising method you decide to use, conduct follow-up research
to see whether it’s working. Ask your customers how they heard about your
business. Note how often a newspaper ad increases your sales. Track how many
leads you get from a tradeshow. Re-evaluate your promotion strategy every
six months to ensure that it’s working for you; if it’s not bringing in the
business you want, talk to an expert about other ways to promote your
business.
Price - Your price will be determined in part by your position and placement
strategies. If you have identified your business as a premium brand, your
prices should reflect that. If you are claiming to be the low-cost provider,
ensure that your pricing strategy covers your operating costs and makes you
a profit.
Sometimes, it’s important to re-examine your marketing strategy for your
business. Remember Zellers? Their differentiation and positioning strategy
was “The Lowest Price is the Law” until Wal-Mart opened its doors and beat
Zellers’ prices. Zellers had to confirm its target customer markets and
conduct some competitor intelligence to determine what Wal-Mart’s strengths
and weaknesses are. Now Zellers’ differentiation and positioning strategy is
about being 100% Canadian and about their customer service.
A good marketing plan will help you articulate the value of your products or
services and will help you understand the competitive landscape your
business operates in. Without it, you’re guessing or relying on your
intuition - which may work, but may take longer than necessary to help you
succeed. Marketing is about growing your business and expanding your
revenues after all, isn’t that what you’re in business for?
Angela Mullan is a Management & Training Consultant with 15 years
experience helping businesses grow & succeed. She can be reached at
amullan@amullan.com |
