The Best Time to Do It is When Few People Are Doing It

Do Things Differently to Stand Out from Your Competitors

My friend had a child in a year where it’s highly auspicious to have kids.  So that means in that particular year, there will be far above average birth rates, and many babies.  Hospitals will be packed to the brim with delivering mothers, while nannies and child care centers will be clogged with above average registration rates. Yes, it may be highly auspicious to be born that year, but it also entails overloaded facilities and schools for the kid later on.  Classrooms will probably have a higher student to teacher ratio that year.

When I was doing Facebook and online marketing intensively for one of my brands, few other brands were that serious yet on social media.  They thought that it was a fad, and that it will pass with time.  I saw it differently, and decided to capitalize on the lack of serious competitors in the social media activity scene for the categories I were involved in.  Lo and behold, we became the clear leader in social media for the categories involved, and many are playing catching up now.

When recession strikes, do you cut your advertising drastically?  Guess what, so do your competitors. Most of them think alike. However, during a recession, when competitors are quiet, you should be there to dominate the share of voice.  Because most of your competitors are quiet, you can stand out without a hefty investment in advertising.  Just enough to be above them, and be the clear share of voice leader.  When the economy picks up, your brand will be way ahead of them in recall and purchase influence.

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What is Strategy?

Which direction do you want to head to?

Strategy is simply making choices of what to do and what not to do.  This impacts the direction of the company, and how you invest your money, time and energy.  A good measurement system is necessary to ensure that you are reaching your destination in all the things you do.

Strategic positioning on the other hand, is doing different activities vs. your competitors, or doing similar things in different ways.  This differs from operational effectiveness, which is trying to do the same thing as competitors, but better at it than them.

Tips on Avoiding Price Wars

Treat your profits with respect!

A recent managers’ survey showed that the top marketing issues plaguing them are price, differentiation and new launches.  Pricing comes up as the top issue.  Here are 3 tips to avoid price wars:

1) The most important concept to acknowledge and practice is that we should strive firstly for profits, then market shares.  Brand managers often got the order wrong, so they sacrifice profits to gain market shares.  Not many companies can survive this, especially if your company is small or medium in size.

2) Be a gentlemen in the market.  Read your competitors’ cues on pricing and pricing change.  Don’t start a price war unnecessarily, and if you want to have a temporary price off, signal to your competitors that its only for a while.

3) Don’t offer discounts too often, else that will resemble a permanent price off.  Coupons attract a lot of current users, up to 80% of them.  So you are actually shrinking your profits to sell to customers that will buy your products anyway, regardless of price offs.

5 Tips for Handling Price Wars

Let's see whose dollar is bigger!

Price wars are the worst nightmares for brand managers.  This is the easiest way to gain market share for the initiator, but it causes fall in margins for competitors who match prices, and can potentially screw up the profits in the category.

How do you handle price wars when they happen?

1) The easiest way is to match them immediately before the shares hemorrhage begins.  When P&G dropped the price of Tide to match Surf in the Philippines, Unilever retaliated by lowering the price of Surf even further almost within the next few days.  Be prepared for a long drawn out war though.  If you don’t have the cash flow to handle this, don’t try this on your brands.

2) Further increase product differentiation so that consumers will not see you as identical to your lower priced competitors.  Communicate your product’s higher value and that it’s worth their money.

3) Do exclusive deals with certain retailers.  This will lock out your competitors from these deals, and make your products seem more value for money among these retailers.

4) Bundle deals for your products.  When you bundle your products together, consumers find it difficult to ascertain the value of each individual item in your bundle.  This will make price comparison more difficult.

5) Flanking brands can be launched.  If you don’t want to lower the price image of your existing brand by lowering prices, launch a new flanker brand at cheaper prices to fight the price war instead.

Winning Against Competitors

In marketing, you can focus on consumers. Give the best products or services, and they will beat a path to your door.

Another way is to defeat your competitors. In a board game, to win, another way is not going for the best, but to understand your competitors and beat them at the game. Then consumers will go to the winner, you.

Sometimes consumers like you for reasons other than that you are better. Pepsi tastes better than Coke from blind tests, but Coke remains by far the much stronger leader. Put on the best image for your consumers.

Care not for the small stuffs, but the major battles. Focus your energy on what matter the most, such as having the right positioning, the right advertising and enough understanding of your target audience.

When you craft your message, do otherwise than what most companies are doing. And that is to focus on what your services or products mean to them, not what it means to you. Care for the masses. Speak to the heart of each one of them with your advertising and offering. Get down from your ivory tower and speak to them at their level.

As what Bill Bernbach said, “You have got to talk about your product in a way that people will feel it in their gut. If they don’t feel, nothing will happen.”

How do you get the right message or way to talk to your consumers? Follow this process. Research first on consumers’ needs or problems. Think of how you can offer your solutions, and look for different meanings or linkages of problem to solution. E.g. most Porsche drivers like the view from the driver’s seat, and most non-Porsche drivers hate Porsche drivers who flaunt the sexy car. So your advertisement should feature the exciting emotional rush sitting in the driver’s seat of a Porsche.

Take some time off to let ideas ruminate and cook. You will often get to refine ideas that way. Then put them in a proper flow, and delete those unnecessary information. Test your ideas on others, and get their opinions.