Marketing Tip: Avoid Direct Competition

Coca-Cola and Pepsi-Cola have been engaged in direct competition for over 100 years – about 99 years too long. Originally marketed as distinct health tonics, the two soft drinks today provide quite a similar experience. They cost about the same, cater to the same market, and have no meaningful differentiation as beverages. The enduring competition between their makers would be costly to most businesses in most industries. Therein lies a lesson for all of us.

aim to prosper in peace

Direct competition is an unnecessarily difficult way to do business. The extent of difficulty relates to the maturity of the market and the innovative capacity of the competitors. Yet, all markets mature and it’s better to prosper in peace than to fight and starve.

identify a niche

To enjoy a more comfortable place in a competitive market, the wise identify and satisfy an under-served niche through differentiation from competitors. They strive not to dominate the market but to dominate one particular aspect of the market: their own.

cheap like Cott

Even if your product was a knock-off of Coke or Pepsi, you could claim market share by selling it at a lower price. This way, you could attract the most price-conscious segment of the market through price-based positioning and avoid the Coke-Pepsi fight. Cott has prospered in the same market this way.

different like Jones

An alternative way to create a niche through differentiation: create a strong brand image that attracts people to your product – even if the product is essentially the same as everybody else’s. The Jones Soda Company does this. Its clear-glass bottles labelled with photos taken by customers and overtly modest writing attract the market segment that prefers quirky originality.

position for profit
The principle of avoiding direct competition extends well beyond the convenient examples of niche marketing in the soft drink business. Every enterprise has its competitors. This is why intelligent market positioning can make an enormous difference in how rewarding serving a market can be.

consult an expert

Since 1996, Articulate Consultants has served independent businesses in Canada and the USA that aim to achieve effective market positioning. In the process, Articulate's bright minds and clear communication have been contributing to the development of distinct, profitable brands. Contact Articulate Consultants for a free discovery session.

- Glenn R Harrington, Articulate Consultants Inc.

Click on these links for more:

The Law of Focus: How to Avoid Direct Competition (part 1 of 3) (YouTube video in new window)

The Law of Focus: How to Avoid Direct Competition (part 2 of 3) (YouTube video in new window)

The Law of Focus: How to Avoid Direct Competition (part 3 of 3) (YouTube video in new window)

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