Making your market impenetrable is one of the best defences against competition. When you don’t want your competitors to succeed, a key strategy is to make is impossible for them to enter and succeed in the market that you are trading in.
So what can you do, to discourage competitors from entering your markets?
1. Reduce your costs of production.
Black and Decker has mastered the science of leveraging on its economies of scale accruing from its use of research and development, technology and its strategic manufacturing and production systems. Each of Black and Decker’s factories around the world produces one product for the global market. The production costs thus become unbeatable and as Black and Decker is not keen to increase its prices, there is not much room for copy cats to manoeuvre.
2. Master technology and quality.
This is the strategy being used by companies like Procter and Gamble as well as Gillette , L’Oreal cosmetics and 3M. These companies are top of their game in utilising technology for competitive advantage. They constantly innovate and have therefore remained the benchmark and reference point in their markets in terms of quality. Technology , in the long run reduces your operating costs and enhances the quality of your products.
3. Dominate through image and communication.
No brand has managed to beat Coca Cola in the game of brand communication. As a world- wide brand, Coca cola has access to the sponsorship of the Olympics, football and other major sporting events. The communications weapon has also been successfully used by Nike, Reebok and Adidas. Domination in the area of marketing communication does not have to be the preserve of financially sound companies. With a great product, clever marketing strategy, and the use of cheaper and more creative advertising channels, even smaller companies can make a memorable impact.
4. Use up all aspects of a concept, through product range extensions.
In the USA and in Europe, the Snapple brand is dominating the “New Age” drinks market by offering a wide variety of tea based soft drinks including Peach tea, Diet lemon tea, Raspberry tea, Mango madness, Green tea and Grapeade. This strategy ensures that Snapple covers the range of possible fruit tastes from their customers. Your company should therefore stop focusing on one type of product , but try and cover a whole range of products within that product group.
5. Put a name on a product making it unique to your company.
All the giants of the chemical industry produce elastane, a fibre which makes stockings and undergarments soft and shiny. On the other hand, only Du Pont de Nemours has lycra, a name that has been used as a sales ploy by Du Pont and all lingerie brands. Lycra is the trademark used by Du Pont to sell elastane. It is ten years of world -wide communication about the glamour linked to the Lycra name that gives the brand its attractiveness. Other brands that have successfully made their names into reference names include Colgate for toothpaste, Surf for washing powder and Coca cola for soda drinks.
6. Control the relationship with opinion leaders
Brands can do this by developing a close relationship with customers. This may include organising competitions, funding community events and supporting a cause that is dear to your community.
7. Control your distribution channels and suppliers.
McDonald has over 1000 restaurants in France and Wal-Mart has over 8500 store world-wide, with more than 2500 stores in the USA alone. These sheer numbers close the market to their competitors. These companies have also mastered the science of sourcing for and distributing their products through dedicated suppliers and growers. Nur Die, a leader in hosiery in Germany dominates the market by having and managing its own shelves in supermarkets. The display units belong to the company and are branded by it. If a competitor wants to enter the market, beyond the advertising cost required to make itself known, it will have to invest millions to create thousands of display units from scratch. Your company can also create barriers to entry by controlling distribution and supplier channels. In the UK, Tesco does this successfully by having exclusive contracts with farmers and other producers.
8. Make your brand elements legally yours
Your brand can also defend its exclusive image against counterfeit products and models. You should not hesitate to defend the exclusive character of your distinctive signs, logos etc against imitation and copycat brands. Therefore it is prudent to register your trademarks and patents. If your product is good enough, there will be no end to the number of copycats who will try to take your market share. Dior, Chanel and Cartier invest heavily in lawsuits against counterfeit networks. In recent months we have witnesses lawsuits between Apple and Samsung for alleged copycat product components. When all else fails, you can always take your copycats to court.
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