In todays world, there is a rise in both, the number of products and the number of competitors in the market. Naturally everyone wants to be ahead of the competition. But is everyone successful? Definitely not. Any market will have one single market leader and not several market leaders!!! So what is it that market leaders do correctly to ward off their competitors? We look at some strategies which are common for every market leader
1) Covering the market globally and locally
Look at companies like Coca Cola, microsoft, LG and others which are market leaders in their respective categories. You will find that each one of these companies have products which are widespread and are known across the world. However, the marketing strategy of each one of these products is customized according to the market that they are serving.
Thus if you have a business which has numerous competitors, it is important that you look at market expansion along with localization. Dont stay back from the global market, but more importantly, while serving the global market, do not forget your home ground. The simple supporting statistic for this statement is that each and every developing country, after exploring the global markets, is now looking at their own rural markets which will provide the maximum growth opportunities.
2) Expand Smartly
Expanding just for the sake of growth can become disastrous. All strategists know that keeping an eye on the cash flow of the business is the most important thing for the growth of the organization. If your working capital is being used for expansion, this will affect even the business units which are actually showing growth thereby causing you to cut back on essential plans.
Expansion is necessary for good business but it should not come on the cost of a skewed working capital or cash flow as both can affect your survival.
3) Control costs
Look closely at the accounts of any good company and you will find ways being implemented to manage costs. There is one basic equation for profits. Income less Expenses is equal to profit. Thus if you cut down your costs, your expenses automatically come down thereby increasing the overall profit. The important thing here is to know what are the major components in your costing. For example in a product based company, Transportation, Rentals, Labour, distribution margins, etc are some expenses which are costlier even than the raw materials which will be used in making a product. Hence knowing each and every component of costing is crucial.
A perfect example of the importance of cost control can be seen during an economic downturn. Whenever a company faces a tough economic environment, it needs to know where it can control the costs thereby curtailing expenditure. It can be done by basic changes in raw materials, tying up with low cost transporters, transporting in bulk quantity, cutting down on labor and finally cutting down on skilled manpower. These are some methods used by companies to control costs during bad times. However, if proper methods are implemented during good times, the company will have more margins and deeper pockets to phase off the bad times instead of taking drastic measures.
4) Implement good marketing plans
The crux of beating your competitors is to have your own unique position in the mind of the consumers. This position should be highly attractive and profitable. Only then you will gain advantages over time. There needs to be a proper implementation of marketing plans. What should be the message of the company? How to change the message over time to bring more and more customers to your brand? How to alter the marketing so as to expand and gain more market share? What should be the vehicles of marketing communications? How and in which order does the plan need to be implemented? These are some questions which your marketing plan should answer thoroughly.
At this point of time it is very important to take the competitors as a frame of reference and to have a marketing plan which is better than the competitors and helps you in achieving the numbers that you are targeting. The best way to implement a good marketing plan is to do a proper competitive analysis and see where you stand in the curent market. You may not challenge the top competitor in the start. But you can definitely get rid of each competitor one by one by implementing a strong marketing plan and sticking to this strategy. In this case, proper implementation of the marketing plan is the key to marketing success.
5) Get the right people and retain them
In the services industry, you are as good as the talent you have on board. Many software companies keep a part of their margin aside so that they dont have to lose software engineers when one project is complete. These engineers are transferred to another project when the work is complete. A customer service manager would never like to lose their best employee. A CEO will never like to lose his best performing managers. Any company would not like to let go of efficient employees. Your employees and stakeholders are your assets.
There needs to be regular action taken to keep your employees and stakeholders motivated and loyal. Take any company which has a low attrition rate and you will see a company which spends a lot in training and development of its employees. This is because when employees leave a company, they take along a part of the knowledge and experience which they have gained in that company. This knowledge and experience needs to be inculcated in the other employee over time. Thus a lot of time is wasted in training and developing new employees. This is why, the smart companies save time by retaining and motivating their best employees. And this is why they stay ahead of the competition
6) Focus on your customers
Several companies, while making profits, forget that the prime reason they are still working is because the customers like their products. The day a company forgets this principal, it is bound to fail. And hence, you need to be the best in this area. Know your customers in and out. Do regular market studies and consumer buying behavior analysis to determine the mindset of the customer. A new technology which was being underestimated by you, but has been implemented by a competitor, can attract your customers attention and take away even your most loyal customers.
Take an example of Facebook and Google (orkut). Google did not even catch up when facebook rapidly expanded to be such a large social network. And by the time google had implemented its own product (google plus), it was too late. The audience was no longer there to notice it. The product too was poor in its implementation. Thus at all times, know what your customers want and also know how the environment is changing and where you are losing your customers. Do not fear to experiment with your product portfolio. You are bound to fail with some products. But as long as you implement strategies with your customers in mind, you will be ahead of the competition.
7) Be Informed!!
One of the basics of selling against competition is to know your competitors. Consider the consumer durables segment. There would be 10 different competitors in television and refrigerators segment. Furthermore, each of the competitors will have ten different product lines. They would have high end refrigerators and televisions for the Sec A customers and low end and lesser priced models for the price conscious segment. You need to know your competitors and their product lines to launch product variants of your own. On the other hand, you need to know all the products of all your competitors to launch a product which is unique in the market and has the first mover advantage. Thus information is important.
Lets take the consumer durables example even further. Consumer durables works on a channel sales basis. Thus your channel too needs to be informed of the features of your product. There needs to be regular training to keep the channel in loop of the latest strategy being implemented by the company. Imagine if you were to launch a new product and you are advertising that product through ATL and BTL activities. And if your channel dealers do not have information of the product and they do not have the machine available for immediate delivery. This will cause a huge loss of sales along with expenses incurred due to absence of information and proper communications.
Thus in essence, when customers visit your channel showrooms, your marketing activities are not in sync. Even though you are advertising the products, the products are not available in the market or your channel partners are not capable of selling it. Thus you lose out on sales and the initial rush. On the other hand, your competitor might be smarter and might have implemented a completely new product with altogether different features. Now your product completely fails in the market!!! This is why information and its dissemination is crucial to beat your competitors.
Here is a video by Marketing91 on Market Leaders.
All the above strategies will be present in top companies across the world. But even if your company is new, and your are planning on expanding your product, these seven factors need to be taken as a reference point to form a successful company.