Brand Competition can be defined as the rivalry between the companies offering the similar line of products or services in the same target market and to the same target audience with the goal to have the higher market share, increased revenues, huge profits, and growth as compared to the contemporary brand at the marketplace. Knowing and astutely understanding the competitors of your brand is one of the crucial steps to plan and execute a successful business strategy.
The facet of Brand Competition acts as a motivating factor for the companies to elevate the volume of their sales generating the higher amount of profits by optimally utilizing the 4 P’s of marketing namely; product, price, promotion, and place.
There is no such industry or the marketplace where the businesses are not exposed to the competition on the daily basis as the businesses have to face the competition from the established brands in the market plus from the new entrants as well that pushes the companies to offer the products and services that are novel in the ideation as well as execution to gain a competitive advantage and the factor of long-lasting loyalty from the customers.
The market dynamics keep on changing at a very fast pace due to ever-growing Brand Competition and hence, the brands have just not to survive but thrive as well knowing the strengths and weakness of the brands that are amongst the competition and plan the marketing, branding, and the overall business strategy in such a way that the business goals are attained in the optimal and successful manner.
Example of Brand Competition
Brand Competition is all around us. But we have to clearly differentiate between Business competition and brand competition. A local business competing on the basis of price is just price competition. A brand competition happens when the businesses are communicating to their customers that their business is better than the competitors.
Verizon vs AT&T is a perfect example of brand competition in the telecom sector. These brands are fighting above the line to push their brand above competition. Over a period of time, one of the brand positions itself higher then the other and gains the market share. Because the other brand is also powerful, such competition may go on for years.
Similarly HUL and P&G are other examples of brand competition. These brands not only compete within themselves, they compete at the various levels of SBU’s that they have and each individual brand of such umbrella branded companies also compete within themselves. Thus, brand competition is present all around us and you just have to look at the communication message of competitive brands to understand the concept.
Types of Brand Competition :
1) Direct Competition
Direct Competition is faced by the brand from the other companies in the market that offer the similar lines of products having comparable features and benefits plus to the same target market and target customers. In this case, the promotional strategy and goals are similar and there is a tough fight to grab the highest amount of market share and the competition is literally neck to neck with the brand cynosures keeping a keen eye and a watch on the contemporary brand’s latest offerings, innovative techniques, and other business aspects.
For example, There is always a direct competition between the two smartphone mobile companies namely Apple and Samsung and the even the customers of both the brand are always at an argument endorsing the mobile brand that they are loyal to. There is always a competition between the two brands on the facets of mobile interface, design aesthetics, and the overall user experience.
2) Indirect Competition
The component of indirect competition occurs when the two brands offer the similar line of products but nature, attribute, and features are quite indifferent from each other plus the business strategy and goals are also different from one another. The rivalry and competition are not as tough as compared to the direct competition but the brands have to keep a watch on the facet of indirect competition as well to stay consistently successful in the market.
For example: Mobile brands Apple and Oppo are the indirect competitors of each other as Apple is majorly into luxury segment and Oppo offer the affordable range of cell phones. Their brand strategies, target audience, and business goals are also different.
3) Replacement Competition
Replacement competition is the tricky situation when your customer indulges in the purchase of other product instead of choosing your product to which he has been committed for a longer period of time.
For Example: Instead of buying comic books for their children, parents nowadays make them watch cartoon videos on YouTube replacing books with the digital technology. Though it depends on the case to case basis and subjective to the parental behavior, this phenomenon has been largely getting noticed.
Ways to defend against Brand Competition :
1) Have a thorough market research and study
The factor of Brand Competition is a consistent threat to the business as there is competition from the existing players and from the budding entrepreneurs as well that keep on coming up with novel and innovative ideas.
Hence, it is imperative for the brand to have a thorough market research and study on regular basis keeping a check on the new contemporaries in the market, what are the types of products and services that they are offering, their brand strengths, features and attributes of their offerings, and what are their unique selling propositions.
Plus the brand has to keep a keen eye on the latest government policies and rules that can affect the business operations along with the research on the developing and evolving tastes and preferences of the customers.
2) Advocate the brand
The management and cynosures of the company have to be the biggest advocates of the brand by endorsing its values, USP’s, ethos, fundamentals, and how its offerings are different from the ones of the competitive brands. And to advocate the brand and its offerings, there has to be a potent mix of conventional and modern marketing and promotional channels to make the customers aware and increase the reach of the brand.
3) Add new customers
To defeat the threat of Brand Competition, the brand has to keep on tapping new markets with a motive to add the new and fresh database of customers that will result in the higher market share and the loyal set of customers that will get ample of referrals for the brand that will work as the new set of prospective customers ready for conversion.
4) Stay true to the brand promise
If the brand is known for offering the high-quality products or offering affordable products or is recognized for providing the excellent levels of customer service experience, no matter what the unique selling proposition of the brand is; it should always stay true to its brand promise that that has made the brand attain the summit of success.
The factor of Brand Competition was always there and will always be present as a threat to the business, but the brand has to be focused on its USP’s, brand promise and keep the customers happy and satisfied that will make it gain a competitive advantage.