Any business owner, sales director or marketing manager inevitably wants the following – to increase profits and cement their brand’s position within the market.But what exactly is a competitive marketing strategy and how can your business create one? Continue reading to discover the answer to these two questions and more.
Whilst an aggressive Pay Per Click (PPC) stance or targeted e-mail campaign may help to accomplish this in the short-term, a well-defined competitive marketing strategy is key to business survival; helping you to both get ahead and stay ahead of the competition within increasingly crowded markets.
If you’d like to discuss your marketing strategy with a member of the Think Beyond team, call 01625 682110 for a no obligation chat.
What types of competitive business strategies should you know?
Leading academic Michael Porter identified four competitive strategies:
– Cost leadership – you become the lowest cost producer. Typically achieved through large scale production, high technology and bargaining power. Use where price matters.
– Differentiation leadership – you develop competitive advantage through marketing your unique features and benefits, increasing customer perception of your added value. A successful differentiation strategy lowers price sensitivity and generates brand loyalty.
– Cost focus – you target specific market segments and keep prices low for them. For example, a telecoms company may be the cheapest in London but not the whole UK.
– Differentiation focus – you differentiated offerings to specific segments. This is a niche marketing strategy e.g. selling left-handed gadgets or over-pronation running shoes.
In summary, cost and differentiation provide the grounds for competitive advantage whilst focus determines the scale.
Competitive intelligence: how you can create a competitive marketing plan
As a long-term defensive plan aimed at generating you a superior ROI, a competitive marketing strategy is based on an in-depth analysis of your market, your competition and your customers.
It is here that the importance of your research as part of your wider marketing strategy cannot be stressed enough. Without a marketing strategy in place, your business is effectively grounded. Like a car with no fuel, your business may look fine, have all the necessary parts and even a few added extras, but you may find that it won’t get you to your destination.
Take time to examine your competitors’ strengths and weaknesses, find out what works for them and what doesn’t. Go further and conduct SWOT and PESTLE analysis to gain a keen understanding of the micro and macro environment in which your business operates. Where are your opportunities and challenges?
Deep-dive into your customer profiles and understand their pain points. Answer what particular problem does your product or service solve? How do you add value? Truly understand your value proposition and use this to your competitive advantage.
The economist, Theodore Levitt, argued that all of your goods and services can be differentiated and that “The way a company manages its marketing can become the most powerful form of differentiation .” Differentiation even exists “in the way in which a manager operates ”; analysis of buyers can identify which of your segments are most price sensitive and which markets are most loyal so that you can target buyers where most of your profit is found.
Why you should Think Beyond for your competitive advantage
Think Beyond is a marketing management consultancy that delivers solutions to your marketing challenges and increase your return. From our offices in Cheshire, our CIM qualified marketers have helped senior teams across the North West to get to grips with all aspects of their competitive marketing strategy.
From research, training courses and marketing plans through to board level Marketing Director as a Service (MDaaS), Think Beyond works with you to implement an intelligent competitive strategy focused on generating superior returns for you.
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