Home > Articles > Business & Management

  • Print
  • + Share This
This chapter is from the book

Competitive Pressure

Regardless of how benign or cynical a marketer's view of people is, the intensity of competitive rivalry in open and free markets will frequently be a dominating factor in strategic and tactical marketing decision-making. One can even say that a lot of the in-your-face efforts come from marketers set on dominating competitors, and going over the top in their effort.

In a sense, competition has always been a factor as long as marketing has been around, in fact as long as business has been around. After all, the key ingredient in a successful business is to provide a differentiating benefit, something that the competition cannot offer, something that generates a sustainable competitive advantage. One reason why the in-your-face efforts in marketing have risen to new heights is simply that the intensity of competition has grown apace with the globalization of markets.

Partly it is a question of numbers. Open and free markets entice new entrants who help raise the promotional intensity in an industry. Having more advertisers means having more advertising. But, perhaps what matters more is the fact that the competitive battle has shifted from product differentiation to less tangible attributes such as brand image and style. The rapid diffusion of technology and rejection of the "not invented here" syndrome have helped many companies incorporate new features from competitors into their own products, obliterating their competitors' advantages. This is why consumer choices in advanced countries depend so much on price and promotion, forcing companies to go to ever greater efforts to hype their offerings.

This was neither an obvious nor easily predictable result from globalization. There was no real reason to expect companies' products to become more alike. It was the emergence of best practices, reverse-engineering, and imitative design that led to a greater importance of promotion. The shift in thinking was mostly due to the Japanese companies' success with imitative product design strategies. As we will see later, the Japanese preference to not necessarily bring new products and new features to the marketplace, but to improve versions of the existing market leaders, is one explanation why their approach overseas seemed so much better attuned to the local conditions than the American way of doing it.

It is not surprising that the shift to communications and promotions as differentiation devices also has meant more and louder promotional efforts than before. Since functional differences between products are relatively minor, promotion of brand and image is the only way to avoid debilitating price competition. If one competitor tries to lower the pressure, other competitors will gain. Many companies advertise heavily to at least match their competition, not really being able to gauge the effectiveness (or lack of it) of the effort. Increasing the stridency and the amount of the effort serves to attract the attention of the prospects and dominate competitors. Then, if people behave as marketers suppose, there is a chance to convert a prospect to a customer. All in all, it is not a pretty scenario.

Marketing as warfare

The marketing activities that many of us are most familiar with are not so obviously based on the idea of satisfying our needs and preferences. This is because the markets in many developed countries are basically mature, even saturated. Marketing involves as much the creation of needs and wants as the satisfaction of them. Actually, marketing often has to start with the creation of dissatisfaction, making you displeased with the state of your present possessions. Only then will you be open to information about "new and improved" options. Marketers frequently compare marketing to warfare, with branding strategies conceived as an attack on a competitor's stronghold rather than simply satisfying customer needs.

The idea of marketing as warfare has a fairly long history, and does crop up now and then in most academic texts on marketing management. In 1986, a book entitled Marketing Warfare was published by two well-known advertising consultants, Al Ries and Jack Trout. They applied the military strategy principles of von Clausewitz to marketing strategy. Strikingly, comparing marketing efforts to military action means that competitors are the enemy, while consumers become the battlefield. As the authors proclaim at the outset: "The true nature of marketing today is not serving the customer; it is outwitting, outflanking, outfighting your competition. In short, marketing is war where the enemy is the competition and the customer is the ground to be won."11

For all its assumed "empowerment" of the consumer, the Internet go-go years of the 1990s did not diminish the relevance of this analogy. As the Preface to the 1998 reprint of the book states: "A decade ago, the term 'global economy' didn't exist....Today's marketplace makes the one we wrote about look like a tea party. The wars are escalating and breaking out in every part of the globe....All this means that the principles of Marketing Warfare are more important than ever."12

Albeit one should not take such promotional hyperbole at face value; such language is regrettable. However, the point about military strategic thinking being part and parcel of marketing remains. For example, it is easy to relate the emphasis of von Clausewitz (and current American military doctrine) on the use of dominant force directly to the consolidation of businesses and the concentration of marketing spending behind a few global power brands. Big beats small.

Today's emphasis on the importance of the brand has not diminished the war-type rhetoric used by marketers—quite the contrary. Other contributing factors of course might be the political and military situations in the country, although it really seems farfetched to ascribe any direct effect from the Iraq war. In any case, a reasonable person might well shudder reading the titles of the current crop of branding business books: How to Build a Killer Brand, Differentiate or Die: Survival in the Era of Killer Competition, Warp-speed Branding, Only the Paranoid Survive. These are not very encouraging metaphors.

  • + Share This
  • 🔖 Save To Your Account