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Competition Is Necessary For Marketing To Exist. Do You Agree With This Statement?
Posted by Anonymous on
7/9/2004 at 4:59 PM ET
There is no possibility of marketing to exist without competition. Atleast not in its true sense because the need for marketing your product goes away. What do the experts think?
Does a monopoly need to market? Also, in case of sudden opening up of markets to competition, isnt the existing complacent monopolistic company in protected markets doomed. Do you need to brand a product and carry out brand awareness campaigns, marketing exercises etc. when you are a monopoly?
I am asking this question because of my personal interest in this issue. Your comments.
7/9/2004 at 5:06 PM
There is more to marketing than competition. Brand awareness is just one of the many other resons for marketing to exist.
Just because one may perceive there is no competition, does NOT mean everyone is going to know about the product or know why they should buy it or want it. Same for the company...without marketing, you don't know who what or where to sell your goods.
I could go on, but this is a fictious topic.
In addition, I'm curious...what monopolies do you know of? Please list them here.
7/9/2004 at 5:19 PM
A monopoly absolutely has to market even though they have no competition.
Look at PEMEX, the Mexican national oil company, a monopoly for sure.
They understand that the still need to keep their company positively branded and their marketing efforts reach far and deep, local, regional, national and international.
They know they need to market the brand as being socially, economically and environmentally responsible.
They need to market the brand as being a safe place to work.
They need to market the brand as a good place for investors to put their money.
Just to name a few.
I hope that helps.
7/9/2004 at 5:38 PM
If you simplify marketing down to the four Ps (Product, Price, Place, Promotion) then even a monopole needs marketing. No company wanting to grow can rely on simple word of mouth and 'let it be' approach.
And that might be the catch. Create / identify a need for your product. Promote it so that you get your market. Ok, now having a monopole doesn't mean you will sell your product or service. If you keep hitting at the wrong doors (prospects) then no clients.
A close to monopoly situation is Microsoft's Office suite. They 'killed' IBM's Lotus Suite and even Sun's free software cannot compete. And Microsoft rely heavily on marketing.
But I agree that if you open up markets and the company did not market itself, then its doomed. Examples are for government owned agencies that become privatized (telephone, post office, etc.). Happened here in Switzerland where we had foreign phone companies rushing into our market and taking over big chunks of the clients, until the once public phone company reacted. Took them some time to stabilize the situation and establish themselves again as leaders. What did help was their 'buy swiss' campaign. And then they started to communicate.... So an interesting point is that a company in a monopolistic situation might have to shift its approach slightly once the market opens up to competition. i.e., be more marekting savvy / agressive.
So if you have a monopoly and you want to grow and you want to put some entry barriers to competition, then you definitely need marketing.
7/9/2004 at 5:54 PM
Yes -- a monopoly needs to market, particularly a monopoly with more supply than the world would buy without marketing campaigns. The diamond industry is an example. While not a true monopoly, De Beers controlled the majority of supply, quantity available to customers and therefore the price. Yet, “A Diamond Is Forever” was needed to build more demand for diamonds. There are many more diamonds available than the market can absorb, hence roll out of supply in a way that keeps the price at high levels. There are many similar case studies.
Here’s a link to De Beers story:
Hope this helps
7/9/2004 at 6:03 PM
What say you, Clint? What do you think so far?
7/9/2004 at 7:03 PM
Competition is really the competition for attention.
The ultimate goal of marketing is to own and influence some of that attention.
The need for marketing is directly proportionate to the level of distraction in the human mind, any kind of distraction.
Dallying with distraction is something human minds excel at.
Marketing will always be needed.
'twas ever thus.
7/9/2004 at 7:04 PM
No, I don't think awareness is the only aspect of marketing. But I do not believe a monopoly is exempt.
Clint, in order to help us out; What is your definition of "MARKETING"? What purpose does it serve? Do you believe it exists only to present competitive media?
I know where you are coming from. Why would a company need to market if they have monopolized a sector or product? Right? OK, well... what is GM was the only auto manufacturer? Don't you think they would need to tell people about the available automoblies? Find people who buy automoblies (no, it is not the public's responsibility to find what they need...well, to an extent, but if they don't know something exists...why would they need it and why would they look for it...plus, if the company who produced the product they need did not market, how would people find them?)? How would GM tell people where to buy cars? How would they price them? What features would they place in the in cars? What colors would they have? How many would they make? How many dealerships would they build? Where would they build them? Etc, etc, etc...
7/9/2004 at 8:03 PM
“in a hypothetical situation, if GM would be the only car manufacturer in the world and be a complete monopoly, would it still follow the marketing mix?”
Clint, since a “a perfect monopoly” can only exist in a "hypothetical situation", the dynamics involved can never really be known
If this situation existed it still wouldn’t be a perfect monopoly. Say GM tried to sell poorly designed and manufactured cars for $100,000 each. Would they sell a billion plus cars to customers worldwide? (my bad guess of the current market) Pricing, distribution and lots of marketing mix stuff would have to be considered. Wouldn’t people find alternative forms of transportation (competition) from motorized bikes to skateboards. I really can’t thing of an example where there is NO COMPETITION. In the real world there is always some choice.
What say yee …
7/9/2004 at 11:36 PM
It seems to me that you have it backwards. Marketing creates competition, not the other way around.
7/10/2004 at 2:51 AM
Here in South Africa we have true monopoly in the telecoms industry. There is only one fixed line phone operator - Telkom.
For years, Telkom have been one of our largest advertisers and marketers, investing heavily in market research, sponsorship and product development.
It is true that this has been accelerated since mobile operators began to invest heavily in this market.
Why? Well mobile operators are a substitute product for land lines. Also, Telkom are clearly preparing for that point in time when their legislated monopoly position is eroded through new entrants entering the market.
Telkom actually have quite a hard time, as historically their complacent attitude frustrated customers. They are now working twice as hard to erode the perceptions of the past and increase their commitment to customer service.
In your fictitious example of GE being the only car manufacturer, GE would have to invest in marketing, as they would be competing against alternative forms of transport. A consumer could take a train, a bus, a plane, ride a bicycle or walk as alternatives to owning a car.
7/10/2004 at 5:07 PM
Even if a business is the only one offering a particular product or service, it will still market. It must initially obtain customers.
Furthermore, even if there is no direct competition, the business is still competing with prospects' perceptions that may include, "I can do this myself" or "I can get by without this."
Once customers are obtained, the business will want to keep them, or at least make them happy so that they spread the good word.
Of course, I'm assuming that one wants his business to grow, thrive or survive.
I don't believe in situations with no competition. There are always choices.
Marketing is so much more than advertising or promotion.
7/20/2004 at 3:26 PM
If we use a Five-Forces model, there are plenty of industries without competition in the form of industry rivals, but ample substitutes usually exist. Even in your proposed scenario where GM is the only manufacturer of cars, as others have pointed out, people could still use bicycles, scooters, or their feet to simply walk. The most basic competitor is always no product at all. Why do I need to even transport myself? Maybe I'll just stay home.
The only example where this is not the case is with necessities - items like food. What if - hypothetically - one company owned all the food on earth? It could set prices as high as it wanted, never advertise, and then you may be right that the need for marketing becomes blurred.
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