Recalibrate Your Competition – Now
Do you know who your competitors are? Would your customers provide a similar response if asked the same question about you? Have the fluctuations in the economic climate changed the competitive situation for your company?
Theodore Levitt’s landmark article “Marketing Myopia,” first published in 1960 in the Harvard Business Review, implores us to think of our competitive set in terms of the need we are filling or the problem we are solving for our customers, as opposed to an orientation towards the products and services we are offering. One of Levitt’s examples — rail companies that incorrectly considered themselves as being in the railroad industry rather than in the transportation industry— demonstrates the shortsightedness that made railroads ill-equipped to handle challenges from the airline and automotive sectors.
It is an ideal time to start asking questions to ensure that your company doesn’t succumb to a similar fate. Consumer decision-making seems to be shifting from wants and toward needs.
How your customers define your products and your competitors also may have changed, including the decision-making process that moves a customer from awareness to consideration and finally to choice. Consumer decision-making processes could be using entirely new criteria to assess the attributes of your offering. Or less obvious, the heuristics employed may have changed with different weighting-systems or importance given to those attributes.
The overall marketplace may have changed as well. New entrants into the market, poised to take advantage of transformations in consumer behavior by better meeting needs and offering new ways to solve problems, can shift whole industries. The best way to find out against whom you are competing is to ask your customers some key questions. Specifically:
- Why did they make the purchase? A clear need or desire should surface. This can be the basis for identifying your competitive set.
- What alternatives did they consider? Some may be your natural product competitors, but you may be surprised at what customers consider a suitable replacement.
- What is lacking to fully satisfy the requirements of consumers? This is especially helpful in determining potential future competition.
Finally, ask yourself, based on the information garnered, who else currently or potentially has the ability to meet your customers’ needs? The answers to these questions should give you better idea of what industry you are really in and, subsequently, whom you’re competing against — the information you need to recalibrate your business in a dynamic marketplace with shifting consumer behavior.
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