by: Geoff Ficke
Competition Is to Successful Marketing As Fertilizer Is to Fruitful Agriculture
Many believe that marketing a consumer product or service would be so much easier if we could have the field of commerce solely to our project. It only seems logical that if your business enterprise had the only peanut butter, pet food or toothpaste on the market you would prosper greatly. A monopoly certainly seems to be the "Holy Grail" that any marketer would desire to protect and enhance their certainty of success. It's just that this is not so.
Reality is different. If monopolies were so desirable then the state run enterprises of the old Soviet Union and Eastern Block Communist countries would have proven wildly superior to businesses that had to compete in capitalist systems.They did not. Lack of creativity, quality and shortages were rampant precisely because competition was not allowed as the bloated state scurried to protect firms from competing, and possibly failing. This only encouraged greater failure and inefficiencies.
Farmers require fertilizer to grow abundant, healthy crops. Competition is the fertilizer that grows products and strong, prosperous businesses. The lack of an incentive to compete insures sloth, market distortions and lack of energy and innovation, so vital to achieving success. The firm that seeks protection for a preferred status rarely is able to stand on its own when real competitors are confronted.
WalMart did not invent the mass merchandise, discount store retail model. Gold Circle, AyrWay, Hills, K-Mart and others preceded Sam Walton and had a head start.For awhile they succeeded. Ultimately, however, the innovations that Sam Walton utilized to build WalMart made his competitors adjust, compete, or die. The result is that consumers are better off, suppliers have prospered and the economy has adjusted to this high volume, low margin type of retail operation.
In Europe and the Middle East there are still numerous examples of crony capitalism. In many countries a politically connected family enjoys a monopoly license or distributorship to operate a certain category of business. Automobiles, earth moving equipment, tools, machinery, foodstuff or garments are examples of exclusive distribution arrangements that enrich the owner of the license, but force the rest of society to pay artificially inflated prices, suffer shortages or minimum selection. The lack of competition is indicative of a lack of dynamism in economies that still organize their economies on this basis.
For several centuries the United States Postal Service (USPS) handled all package and mail delivery in the country. This was a classic monopoly. Then United Parcel began to deliver small packages. Fred Smith created his logistics machine, Federal Express to deliver documents and packages over night. DHL and other international players then entered the space. The result is that this intense competition has kept prices contained, service has expanded and performance has become commoditized. All have done well except the USPS! As a monopoly it has been far too slow in adjusting to the new realities and technologies that have stood its service on its ear.
I lecture to college students each semester. One of the topics we discuss is identifying marketing opportunities. I always ask a rhetorical question: "Would you like to start a flavored drinks business that would compete against Coca-Cola, Pepsi, RC Cola, Mountain Dew, Dr. Pepper, 7-Up, etc.? The students always answer "no"!
Their reasoning would seem sound. How do you compete with these giants for shelf space, floor display, promotional activity and consumer awareness? The answer is that because of competition, clever innovators introduce new types and categories of drinks each year that these behemoth brands cannot hold off owing to their bulkiness and corporate flab. Snapple, POM, Arizona Iced Teas, Vitamin Water and many more fresh new brands have carved out special niches in this mature market segment. There is always opportunity where there is competition.
Successful people always are competitive. Athletes are obviously competitive. Writers compete for readers. Radio hosts compete for listeners. States compete for business relocations. Young people compete for love and spouses. We compete in almost every aspect of our lives.
Successfully marketing a product or business opportunity requires a sharpened competitive instinct. Those lacking this trait are destined to work for others and this is fine for many, actually most people. Those who are most successful in business, sales, marketing, or life are always people who do not run from competition but meet it as a challenge. They often view competition as fun as well.