19 Nov Strategies to Beat Competitors in Your Business
Strategies to Beat Competitors
When the product life cycle gets shorter and shorter, the company that achieves an innovative advantage will enjoy the rewards of being first. Marketing studies conclude that innovative products are 33% more profitable. But innovation also has its weaknesses: very rudimentary or ahead of demand for new products, excessive development costs, difficulty in competing, and the appearance of copycats offering lower prices and continuous product improvement.
Quality level refers to the ability to meet consumer expectations. Depending on the product, quality is identified with durability, reliability, safety, etc. To differentiate in this sense, “the best product” or, at least, a product or service superior to existing ones must be manufactured. Companies that have higher quality products are more profitable because they can charge higher prices and their customers are more loyal. However, after a certain point, an increase in quality results in a decrease in performance. The secret is to choose a quality level appropriate for customers and higher than that of competitors.
A product may be offered with some additional feature that complements its basic function. There are many possibilities for differentiation in this sense, as it has been shown that almost everything can be added to a product: detergent with disinfectant, toothpaste with the elixir, moisturizer with caviar, shower gel with honey … But whoever opts for this strategy should find out what is worth adding to the product, calculating the value that this additional feature will have for the consumer as opposed to the cost it will represent for the company.
Fifteen years ago, companies competed through prices, today they do so through quality, and tomorrow they will do so through design. Design is the most difficult feature to copy and consumers are willing to pay a premium for an attractive and different product. The company that intends to influence the design must know that it affects the aesthetic appearance, but also the functionality. A well-designed product must be easy to use and pleasing to the eye.
The packaging is an element of extraordinary relevance, as it constitutes the consumer’s first contact with the product and actively influences the purchase decision. It is especially important in high-end objects, that is, elitist objects that take maximum care of the design, such as jewelry or watches, and in beauty products, such as perfumes or cosmetics. But it can also become an effective weapon of differentiation if you take special care in consumer products, in which the packaging is not usually given importance.
Another form of differentiation is to provide additional services when purchasing the product. They facilitate the purchase and use of the product, and the consumer obtains guarantees as added value. Good service builds customer loyalty and makes them less price sensitive. The disadvantage of choosing this form of differentiation is that it is easily imitable. Commissioning and delivery facilities, installation, and maintenance, personalized attention during and after the sale, guarantees, attention to complaints and money back are the services most valued by customers.
To make a message attractive, rational, or emotional concepts can be used. Rational ads affect quality, profit, or price, and emotional ads use positive or negative emotions. Fear, joy, disgust, shame, love, and humor are concepts used to carry out different advertising. However, even if these ads are able to attract more viewer attention, they can make it difficult to understand, cause rejection and hide the product, not forgetting that ads like these can go out of style more easily.
Public relations includes a series of activities dedicated mainly to promoting the image of a company and its products. They differ from advertising in that the company does not pay for space or time in the media, but for a group of people to develop ideas, circulate them for free, and lead events such as product presentations or sponsorship of socio-cultural activities.
An important tool to differentiate itself is the physical space in which the company produces or sells its products. The furniture and its distribution, the architecture, the materials, and the colors used… are of great importance, especially if it is retail trade. For a store to be a competitive advantage, the environment must be prepared almost as if it were a theater stage, so that going to buy is, above all, an experience.
The company can differentiate itself from the competition by having better-trained people among its workers. The most qualified personnel must be competent, courteous, convey credibility and trust, and be responsive. The company can also choose to have an employee with some characteristic or skill different from the rest.
The image of a company is enhanced and differentiated from the rest with the use of symbols that represent some aspect of the company and that remain in the mind of the consumer. The symbol can consist of an object, a pet, a color, or even a person.
The company chooses to name its products moving away from the line marked by its competitors. This requires making crucial decisions regarding the brand, ensuring that the name of the products is suggestive, as well as easy to recognize and remember.
Price is associated with considerations such as quality, value or social status. For this reason, it is possible that the consumer opts for the most expensive product since he wants to afford to show off a symbol of social success. Experts have repeated ad nauseam that most skincare cosmetics contain identical ingredients. However, the high prices of certain brands continue to convince the consumer that they are buying the best product.
There is a current trend among consumers, a group that encompasses the so-called “precision buyers”. These people have lost interest in luxury brands that charge a premium for their products and are opting for cheaper products, provided they are of acceptable quality. Offering a cheaper product than the competition can be a good differentiation strategy, as long as – yes – that the consumer does not perceive it as poor quality.
The company can also break with the tradition in the selection of channels, choosing means to distribute its products other than the usual ones. You can sell your products in exclusive stores, create your own stores to distribute them or opt for the Internet or direct sales. The franchise is also worth mentioning as an expansion strategy. With this system –if it is well designed– it is ensured that both the image and the quality of the offeror customer service are the same in each store in the chain.
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