Marketing in a ‘Competitor-driven’ company

Following on from my previous post How is your company ‘driven’? , this post looks at what it means to be a ‘competitor-driven’ company and how Marketing functions in this type of company culture.

Competitor-driven companies generally identify a market opportunity for a copycat or ‘me-too’ product or service. The value proposition is usually to offer a cheaper alternative, or greater availability, or some tweaks to the design, features or functions to make their product or service an appealing competitive alternative. The market leader usually holds a dominate market share with a number of competitor-driven companies battling for what is usually single digit or low double-digit market share each.

The common marketing approach for competitor-driven companies seems to be mostly tactical, focusing on competitive comparisons, cheaper price promotions, higher availability through mass-market channels, product comparisons in trade publications, comparative ‘shoot-out’ coverage, and pursuing favorable exposure from the myriad of awards, recognitions, seals of approvals and other endorsements. While these products or services are mostly undifferentiated in the minds of target customers, marketing must come up with some differentiated value propositions to gain prospect and customer mindshare.

If applicable, a competitor-driven differentiator that works in some markets is to offer an industry standards-based product versus proprietary technology products. The beauty about standards is there are so many to choose from. :)

A more strategic marketing approach would be to research and identify niche market segments or adjacent markets where competitive products may have minimal presence or little traction. These niche markets could be geographic, vertical industry, demographic, psychographic, professional, trade, persona, or one or more of many other market segmentation dimensions marketers regularly use. Strategically this could be a great approach – building market share and credibility in niche or adjacent markets. This strategy moves the approach from undifferentiated to differentiated marketing.

“If you don't have a competitive advantage, don't compete” - Jack Welch

IMO, a mistake many competitor-driven companies make is trying to directly compete with the market leader(s). That’s tough territory. If you look at typical market share breakdowns, it may be strategically better to first directly compete with other smaller players and build up a solid position in the top 5 or better before putting resources into competing with the market leader(s).

Do you work in a competitor-driven company – what’s your marketing approach?
(use the comment link below to share your thoughts on this topic)

Next post, we’ll look at marketing in a sales-driven company.
Copyright © 2009 The Marketing Mélange and Ingistics LLC. http://marketing.infocat.com

How is your company ‘driven’?

I frequently hear people categorize their company as being “customer-driven” or “we’re a sales-driven company” or “we’re definitely a market-driven culture” or something like that. I’m always tempted to ask 2 questions; “so what does that really mean for how you operate?” and “how does that impact your approach in marketing?” The curious thing is that when you do ask these questions you frequently get wishy-washy answers. So, being analytical and curious, I did some checking a couple of years ago to find out what these categories of how companies perceive they are driven really mean and more importantly, what it means for how you approach marketing.

Every business has a company culture, usually established by the founder/owner/CEO/executive team or similar chief person(s). One of the many facets of company culture is this categorization of how the business is driven. What you usually find is the chief person’s professional career is the primary determinant of the culture. Yes, other factors such as their background, education, culture, personal beliefs, etc. do play a role too, but their career experience seems to have the most influence. Therefore, a chief person who came up through the sales organization will generally establish a ‘sales-driven’ culture while someone with mostly customer service or consulting career experience may establish a ‘customer-driven’ culture.

Seems to me there are 4 major types of company culture drivers:

1. Competitor-driven
2. Sales-driven
3. Customer-driven
4. Market-driven

Sure there are other drivers such as product, engineering, innovation, etc. but IMO they’re a subset of one of these majors. While none of these are necessarily wrong or bad, there are ramifications for the organization overall and associated limitations that may not be readily apparent in some of these.

Companies could evolve through different cultures as the business matures and evolves in the marketplace – for example, a company founded on a competitor-driven premise of providing cheaper alternative products, may move to sales-driven as their market share increases and eventually to market-driven with their own product innovations establishing market leadership.

My next 4 posts on this blog will explore each category in more detail and discuss the implications for marketing supporting each type.
Copyright © 2009 The Marketing Mélange and Ingistics LLC. http://marketing.infocat.com