Coca-Cola and Pepsi-Cola have been engaged in direct competition
for over100 years, which is about 99 years too long. Originally
marketed as health tonics, the two products are very similar,
cost about the same, cater to the same market, and have never
established any meaningful product differentiation. Such
protracted, intense competition would be very, very costly to
most businesses in most industries. There's a lesson in it for
all of us, though.
prosper in peace Direct competition is an unnecessarily
difficult way to do business. The level of difficulty relates to
the maturity of the market and the innovative capacity of the
competitors. Yet, all markets mature and it's better to prosper
in peace than to fight and starve.
fill a niche To enjoy a more comfortable place in a
competitive market, it is wise to identify and satisfy an
under-served niche through differentiation from competitors.
This way, you strive not to dominate the game but to dominate
one particular aspect of the game - your own.
cheap like Cott Even if your product was a knock-off of
Coke or Pepsi, you could claim market share by selling it at a
lower price. This way, you could attract the most
price-conscious segment of the market through price-based
positioning and avoid the Coke-Pepsi fight. This is how Cott has
prospered in the cola market.
different like Jones An alternative way to create a niche
through differentiation is to create a strong brand image that
attracts people to your product - even if the product is
essentially the same as everybody else's. The Jones Soda Company
does this. Its clear-glass bottles labelled with black-and white
photos and overtly modest writing are a hit with the market
segment that likes quirky originality.
position for profit The principles of avoiding direct
competition extend well beyond the convenient examples of niche
marketing in the soft drink business. Every enterprise has its
competitors, but intelligent market positioning can make an
enormous difference in how fun and how profitable life can be.
At Harrington Newsletter, we enjoy helping businesses achieve
profitable positioning and have helped to create effective
brands. Contact us with your thoughts.
by Glenn Harrington
www.newsletterdoctor.ca
About the author:
Glenn Harrington is Principal Consultant of the
Harrington Newsletter
Company in Victoria.
www.newsletterdoctor.ca doctor@harringtonnew
sletter.ca
