Question

Topic: Strategy

Should We Answer The Competition's Actions?

Posted by Anonymous on 4/3/2008 at 11:24 PM ET 125 Points
Here is my dilemma...
My company is the leader in every aspect of our industry. Our closest competitor just released a product that matches the product that differentiated us the most (we have been producing this product for 9 years)...they used to make a similar product with a few differences but always said "their" way was better...now they have a product with exactly the features they said were inferior and are really promoting it. There are people within my company who want to start an ad campaign to tell consumers "we were first" and poke holes in the competitor's product history. I am against this, we should not stoop to this level!!! I think of Budweiser and McDonald's...you never see them put out an answer to an ad where a competitor bashes them or releases a product similar to theirs.

I need some examples or places to find research/articles to support the fact that industry leaders do not put out advertisements in direct response to competitor's actions. Hard data is always the best but case studies would be great too. I am hoping someone on here has dealt with this in their own company and I really need help building my case...HELP!
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RESPONSES

  • Posted by Jay Hamilton-Roth on 4/4/2008 at 8:57 AM Member
    If you're the leader, then telling people about #2 is in effect giving them free advertising. By changing their product to match yours, they'll be saying, we're now as good as #1 (free advertising for you), so now you need to continue to evolve your product - finding out what will distinguish you from #2 (and #3...). You don't need more features to match #2 - you probably already understand how your product is used, make it easier, strengthen your warranty, customer service, create higher/lower-end products, etc. Yes, pay attention to #2 (and what they're doing). Make sure you understand the new threat, and are a couple of steps ahead of them.
  • Posted by CarolBlaha on 4/4/2008 at 9:28 AM Accepted
    Jay is right. Like when Walmart entered into the organic food market. The organic grocers I knew were happy! Walmart has horrid quality produce-- but their PR promoting organics was selling the concept for them! Think of it, now your salespeople can say "we were right -- even our competition says so!"

    Being #1 itself isn't a differentiator. Really, who cares who was #1. Ford was #1-- but they sure aren't now. Look at how many others have built a better mousetrap.

    Your team is being defensive about the copycats. Before you decide on a plan, urge them to not think emotionally. They have to react not in defense, but how they aren't going to be the next Ford. Strengthening your package, again-- as Jay said. Here is an article I think helps the process. https://www.strategy-business.com/media/file/03306.pdf

    The risk you run of insulting directly a competitor is that it insults the buyers who have purchased their product. Your potential buyers. Companies do occasionally attack each other head to head-- but then, you will be buying PR for your competitor!

    Carol
    Sell Well and Prosper tm
  • Posted on 4/4/2008 at 9:38 AM Author
    I am in 100% agreement about strengthening our business to continue the differentiation...that is not a problem and even with this new product from the competitor I am not worried about keeping the differentiation.

    Carol hit it on the head with not reacting emotionally...thanks! I am really looking for specific examples or research of where a company directly went after their competitor and failed. It would be great to find something where a company was at the top of their industry and actually got knocked out of that position due to them marketing "against" the competition.
  • Posted by Markitek on 4/5/2008 at 11:27 AM Accepted
    Beware the pitfalls of research. For every example you find that supports your case, there will be another that supports the opposite. And so you end up in a subjective, political battle. Which is both unprofitable and frankly illogical.

    The truth is: there are in fact times when directly attacking the competition works perfectly. In general, it's a tactic used by the #2's (and below of the world)--Avis is the obvious example. Rarely does #1 do it--in fact I can't think of an example. But trust me, they're out there.

    I think your approach needs to be one that, first, acknowledges that there are times when direct attack works (which positions you as the cool head in the hothouse and gives you credibility), and then run some scenarios to see if that applies to your case. Remind everyone that for every action there is an equal/opposite reaction: you attack them for copying, they attack back with "yes but we do it better for less"; you attach them back with "no you don't" and . . . you get the picture. Associate costs with that kind of (you know what) contest.

    A compromise might be (and it's impossible to spell this out without any info) to position yourself as "the standard setter" in your industry, which gets across the same message but doesn't provide free visibility to your competition.

    Now, the message that imitation is the sincerest form of flatter is a quality sales message: I don't know your product so don't know what your sales force is like (if you have one) but attack points should certainly be part of their message.

    Here are just a couple of links which you can use to begin to support your case . . . the query was "advertising direectly attacking the competition " on Google. The key point is that in every one I found the attacker was the underdog. That ought to be a statistical cherry for you.


    https://www.inc.com/resources/marketing/articles/20040701/war.html

    https://findarticles.com/p/articles/mi_m3190/is_n38_v31/ai_19784446

    https://www.quickmba.com/marketing/ries-trout/marketing-warfare/
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