What is a competitive marketing strategy?
What happens when consumers are offered goods that are like yours in a highly competitive market? It essentially becomes the battle of the best marketer.
This scenario is common and brand competition is stiff these days, especially for those looking to enter the market. So naturally, businesses without the right competitive marketing strategy may end up going under sooner or later.
But what is a competitive marketing strategy? Think of it as the plan a business uses to protect its position in the market and gain a competitive edge.
In this piece, you will discover:
– Â Â Â Exactly what a competitive marketing strategy entails
– Â Â Â Its importance in your business
– Â Â Â Four competitive strategies that can help your brand achieve market dominance.
What is a Competitive Strategy?
A competitive strategy is a long-term action plan that a business develops to gain competitive advantage and outperform its competitors. To do this, they would have to analyze their competitor’s strengths, opportunities, weaknesses, and threats relative to their own business.
This plan is intended to put you above average and produce a higher Return on Investment (ROI). This tactic is crucial when there are market rivals offering a wide range of identical products to your target customers.
A competitive strategy is a blend of tactics, planning, and research. All these are put together by a brand to expand its market share and stay one step ahead of the competition. The plan covers several commercial activities, including product development, advertising, and customer support.
Why is it Important to Have a Competitive Strategy?
It is a well-known fact that staying ahead is much harder when there are more competitors in your chosen industry.
Developing your brand’s offering without a solid competitive strategy is not a viable approach. If you don’t, a competing brand will eventually find ways they can outperform you. They might start offering the same features but at a cheaper price, or more features at the same price.
Therefore, maintaining a strong position in the market requires a carefully drawn-out competitive strategy.
To grow a brand in a highly competitive environment, you need to conduct a detailed analysis of your competitors. This should cover their market advantages, disadvantages, strengths, and weaknesses. Take note of all possible threats to your brand’s growth so you can anticipate and avert them.
But even more importantly, find out your target market’s preferences, problems, and needs. Knowing all this will help you identify weaknesses in your current offerings so you can improve them appropriately.
Seems like too much? Then it’s time to reach out to us. At Senspoint, we employ successful business practices to establish your company’s credibility and give you a competitive advantage over rival brands.
In essence, businesses can make more informed judgments with a well-thought-out competitive strategy. With this they may sustain competitive advantage, and continuously enhance their goods or services.
Businesses, no matter the niche, need a strategy to stay competitive, and business strategy deals with these problems. There are four such competitive strategies that come in handy.
4 Types of Competitive Strategies
The four types of competitive strategies were categorized by Michael Porter, an American economist and academic.
No matter the size or the nature of the product or service, each organization can use these four different competitive strategies. For this reason, these strategies are also known as “generic strategies” since they can be used by any business. Let’s review them:
1. Cost Leadership Strategy
With a cost-leadership approach, a business prices its offerings less than the competition. Businesses pursuing a cost leadership technique are the market’s lowest-priced vendors.
Offering a product at the lowest price can cut into profits. So, if using this strategy, the cost-leader must minimize the cost of its product’s construction. This method was successfully adopted by Walmart as larger enterprises can offer a lot of goods at little expense.
Large-scale production, good capacity utilization, and a variety of distribution routes all contribute to making this viable. The lowest price is this strategy’s competitive edge.
2. Differentiation Leadership Strategy
The cost-leadership strategy is totally opposed to the differentiation strategy. Through the addition of value, businesses attempt to distinguish their brand by offering quality products.
Here a brand figures out what distinguishes its products from others in the same niche. They can charge a higher price for their product or service, outperforming its competitors in the long run.
Apple and Starbucks are examples of companies utilizing this tactic.
3. Cost Focus Strategy
The cost focus approach also focuses on giving consumers the lowest prices possible – just like the cost leadership strategy. The cost focus strategy aims its marketing efforts at a specific market segment and caters to their wants and needs.
Businesses that employ this tactic frequently focus their efforts on regional markets with specific needs. The benefit of this method is that it makes it easy for brands to build brand recognition.
Sonata wrist watches use this strategy to stay ahead. They focus on selling low-cost, quality wrist watches as compared to premium brands like Rolex and Hublot.
4. Differentiation Focus Strategy
Businesses that employ this tactic concentrate on specific market segments with a focus on providing distinctive value to their customers.
The differentiation focus strategy focuses on upgrading the brand’s offering with unique features. To make the company stand out they need to distinguish themselves from competitors who sell similar products.
A very good example is Titan, a watch manufacturer, which focuses on making jewel-encrusted premium watches. Other watchmakers produce luxury watches, but not many of them embed their timepieces with jewels.
Wrapping Up
Without a doubt, a well-defined competitive strategy will enable your brand to make better decisions. If you want to outsmart the competition and seize a larger market portion, it’s imperative that your business adopts one.
Of course, you may need a helping hand. So why not take the first step and talk to us at Senspoint? Let us collaborate with you to refine your brand’s competitive marketing strategy.
