The business world is competitive and rapidly changing, requiring companies to constantly adapt and innovate to maintain their competitive advantage.
Competitive marketing is the cornerstone of achieving superiority over competitors. Consequently, those without a competitive marketing strategy will fall behind and be outperformed by competitors with effective competitive marketing strategies.
In this article, we will learn about the concept of competitive marketing, the main types of competitive strategies, and provide examples of competitive marketing strategies.
What is Competitive Marketing?
Competitive marketing is the development of a long-term marketing strategy aimed at outperforming competitors. This requires understanding the strengths and weaknesses of competitors and the needs of the target market.
The goals of competitive marketing include maintaining market position, achieving a competitive advantage, increasing sales, and achieving a high return on investment.
Competitive marketing is increasingly important in highly competitive markets selling similar products.
To understand what a competitive marketing strategy is, it is simply a combination of the use of certain tools, planning, and research. The strategy includes various business aspects, including customer support, product development, advertising, and promotion.
For a successful competitive marketing strategy, companies conduct research on competitors and customers to understand their marketing strategies and customer expectations.
Based on the results of this research, companies can identify available opportunities and potential threats, and based on this, develop an appropriate competitive marketing strategy that enables them to outperform their competitors.
Successful companies continuously monitor their competitors and evaluate their performance to adjust their marketing strategies accordingly.
Competitive marketing strategies take many forms, but they are designed to differentiate themselves from competitors.
The most common competitive marketing strategies include offering lower prices, providing excellent customer service, and offering innovative products.
What Is Competitive Analysis
Competitor analysis refers to the process of comparing your brand to other brands to identify its strengths, weaknesses, and advantages.
This analysis also clarifies competitors' market position, their sales and marketing methods, and their growth strategies.
Competitor analysis is an opportunity to learn, but it does not mean imitating competitors or undermining their pricing.
The importance of competitor analysis lies in the following:
- Knowing the strengths of your business, or if you are starting your own business, gives you ideas on how to stand out from your competitors.
- Understanding competitors' strengths and analyzing their behavior as they rise to the top.
- Giving insights into how to measure success and progress.
- Knowing your target audience closely.
The steps of competitor analysis include:
- Identifying competitors.
- Identifying the products offered by competitors.
- Researching competitors' sales methods.
- Understanding competitors' prices and features.
- Analyzing competitors' marketing methods.
- Observing competitors' content creation strategies.
- Understanding the technological means competitors use.
- Analyzing the level of audience engagement with competitors' content.
- Observing competitors' promotion methods.
- Understanding the extent of their digital presence on social media platforms and the strategies used to increase engagement.
- Conducting a SWOT analysis to identify competitors' strengths, weaknesses, opportunities, and threats.
Types of Competitive Strategies
There are four types of competitive strategies developed by American academic and economist Michael Porter.
These strategies are general strategies that work for any organization, regardless of its size or the nature of the product or service it offers.
1. Cost Leadership Strategy
This is a strategy used by companies to offer their products and services at the lowest prices and with high quality, creating a competitive advantage.
To achieve the target profit margin, they require reducing production costs through several methods, including large-scale production and optimal resource utilization.
Cost leadership is a popular strategy among large corporations.
An example of a company that applies this strategy is Walmart, a multinational retail company.
2. Cost Focus Strategy
The "cost leadership" strategy is similar to the "cost focus" strategy in many ways.
However, the "cost focus" strategy is more specialized and targets a specific market segment or geographic region.
This is a strategy used by companies to focus on a specific market segment and offer products or services at the lowest possible cost. This strategy aims to attract customers with specific needs that competitors don't meet.
Companies that follow this strategy often target regional markets with specific needs or specific market segments based on demographics, such as age or gender.
An example of a company that uses this strategy is Sonata Watches, which offers an alternative to authentic watches like Rolex, but at lower prices and with reasonable quality.
3. Differentiation Leadership Strategy
This strategy is used by companies to differentiate themselves from competitors by offering unique, distinctive, and superior-quality products or services, enabling them to stand out in the market and gain a competitive advantage.
The goal of the differentiation leadership strategy is to maintain the loyalty of customers who desire unique and exclusive features in products that competitors don't offer.
These products or services may be of high quality at high prices, but the competitive advantage remains the high quality. Examples of companies that employ this strategy include Apple and Starbucks.
4. Differentiation Focus Strategy
This is a strategy used by companies to target a specific market segment and offer them distinct value.
These companies seek to develop their offerings to offer customers unique features that set them apart from their competitors.
However, despite the small size of the target segment, companies strive to maintain customer loyalty by offering them unique features.
An example of a company that applies this strategy is Titan, a watch manufacturer.
This company is known for manufacturing original jeweled watches. While many companies offer luxury watches, few offer jeweled watches.
5 Ideas for Competitive Marketing Strategies
Here are 5 ideas for competitive marketing strategies:
1. Analyze Competitors' Websites
Websites are a marketing tool for any business, allowing customers to learn about available products or services. For a website to make a good impression, it must have a good, modern design and be easy to use.
To analyze competitor websites, follow these steps:
a) Select three websites of your closest competitors who target the same customer segment and operate in the same niche.
b) Review each website and note the way information is presented and the ease of use and navigation.
c) If the website has a blog, note the number of times it posts monthly, the nature of the topics they cover, and whether their content is accurate. What sources do they rely on to present information?
d) Check whether the website is mobile-friendly.
e) Check whether the website contains videos and infographics, and whether they organize events such as seminars and workshops.
When implementing these steps, you must assume the mantle of an expert in the field to analyze, monitor, and evaluate competitors' websites.
2. Be the Customer
To get to know your competitors well, try becoming a potential customer to see which marketing strategies you would like and which ones you wouldn't.
To become a potential customer of your competitors without paying a penny, follow the following steps:
- Subscribe to their newsletters and blogs, but don't use your company's email address.
- Follow their websites and stay updated on their latest developments regularly.
- Follow their social media pages.
- Participate in free offers that competitors offer to potential customers.
After implementing the previous steps, you will have a close understanding of the best marketing strategies used by competitors and the worst ones.
Your role here as a business owner will be not to be an exact copycat of your competitors, but to draw inspiration from them, provide your customers with better service, and employ better marketing strategies.
3. Evaluate Your Competitors' Use of Social Media
Most businesses and companies use social media to communicate with customers and promote their services or products.
Therefore, an important strategy for understanding your competitors is to evaluate their use of social media.
To evaluate your competitors' use of social media, follow these steps:
- Read their posts on various social media platforms.
- Note which posts receive the most engagement from their audience.
- Learn the size of their followers on social media pages.
- Learn the level of engagement from their audience on their various posts.
- Note the hashtags used in their posts.
- Note how competitors use calls to action.
- Note where they post their posts, and whether they post them in specialized groups and pages.
Repeat these steps regularly to understand your competitors' approach to attracting customers.
4. Monitor Traffic to Competitors' Websites
To monitor traffic to your competitors' websites, you should use competitor analysis tools such as Semrush.
Using these tools is simple; all you have to do is type the website's URL into the search box.
You will then receive valuable information such as:
- What keywords do they rank highly for?
- Natural and paid traffic.
- Backlinks pointing to them.
- Their top-performing subpages.
- Their main organic rivals.
This information helps you better understand your competitors and identify their gaps. You can use this information to develop your strategy for creating content that attracts potential customers.
5. Ask Customers
One of the competitive marketing strategies is to ask customers about their opinions about your company or business, why they chose it, and what they want.
Conducting regular surveys to understand customer opinions and needs will help you develop and differentiate yourself from your competitors.
In conclusion, the goal of competitive marketing is to achieve a competitive advantage, outperform competitors, gain a significant market share, increase profits, and maintain a company's market position.
To develop effective competitive strategies, one must constantly monitor competitors and analyze their performance.
Monitoring competitors doesn't mean imitating them exactly, but rather drawing inspiration from their experiences and understanding their strengths and weaknesses in order to develop successful competitive strategies.
So, if you own a company or business, your focus should not be on monitoring competitors, but rather on what new things you will offer customers and how you will differentiate yourself from your competitors.