Why Brand is so Crucial to Competition and to taking Market Share
At our September training event in Zambia I developed discussion around business competition, the concept of taking market share and the crucial role brand building plays in the process.
I was prepared for a reasonably lukewarm reaction, as I had already learned that competitive business with the aim of actively taking market share doesn’t sit so well culturally with Zambian business owners.
Gladly, the other training material was received well with lively interaction and contribution from the 50+ group. However, when it came to business competition and the importance of market share it was as if I'd taken delegates by surprise.
Occasionally I encounter similar reactions in meetings with business owners in the UK. This is usually with owners of small businesses or business owners flying solo.
Do business owners feel threatened? The idea that another business could quietly be scheming to take a share of one's customers – a customer base built over a long period – could be worrying and potentially damaging to both business and livelihood.
Perhaps in the minds of some, competitiveness to the point of actively taking market share appears greedy and one of the uglier distinguishing marks of capitalism.
Is competitiveness in business healthy?
Capitalism in its truest form needs a competitive market. Without healthy competition monopolies exist with power to price set instead of the market setting prices. American Lawyer and Politician, Amy Klobuchar puts it well with her example when she says: 'Competition is the best way to ensure prescription drugs are affordable.'
But, let’s bring our thoughts nearer to the small business community. What about healthy business competition in this arena?
In my view running a healthy, competitive business has several key benefits for the business owner and the competitor alike.
Here are 5 to be going on with:
1. Competition brings change. It leads to development and innovation. Without another player in your field there is little incentive to improve. In fact, to improve can be difficult.
Development, innovation and improvement are essential for players within a crowded marketplace. After all, who’s going to succeed by offering the same product or service as everyone else? As Dennis Muilenburg, President, Chairman and CEO of The Boeing Company believes: 'In the long run, competition makes us better ... it drives innovation.'
Your business can be distinguishable in a variety of ways. The use of advancing technology, product R&D or an improvement in customer experience can all make your business different and thus introduce a good measure of healthy competition.
It will follow as no surprise that such a business will, almost by default, take market share.
2. Whatever and wherever you sell there are usually others around you with the same offering. Thus your approval or otherwise of business competition is, to a large extent, irrelevant. Quite simply you are forced to compete for customers.
Your good customer service, for example, will often win you loyal followers, thus leading them away from your competitor with whom they had previously been loyal. This is a legitimate win and is a product of healthy competition.
3. While you’re busy developing, innovating and improving, your business will grow a whole new culture.
A business that is led to continually better itself and to break new ground will be a business in which employees engage and push themselves to drive up standards, both qualitatively and quantitively. Productivity becomes better as well as greater.
From the perspective of competition, it follows that such a business will be both attractive to buy from and to emulate.
4. Your business is in a competitive marketplace and your mission is to appeal to an audience that is seeking what you sell. Others in the field will make a plea for the same audience.
Rather than feel threatened by this level of competition there is a positive opportunity to focus more forensically on your core audience, your true target market.
Your market research will have determined your targeting method, which could be from something as simple as geographical location or demographic indicators such as gender, age, household income, education level, occupation and more.
Your competitors are also your challengers. Those who challenge you also encourage you to better understand the market and your share of it. Your better understanding will result in better provision. It’s up to you if and how you wish to grow your share.
5. There’s a huge amount to learn in the field of competitive business too. Once again, competition brings a positive and this time it’s around education.
Your business will be used to operating and supplying products or services in a way that is familiar to you and to your employees. Seeing what your competitors do – and what they do differently – can reveal a lot about your own business.
Methods employed by your competitors can provide valuable insight into the market from a different perspective. There’s an opportunity to learn what works for your competitors, as well as what doesn’t!
Why is Brand so Crucial to Competition and to taking Market Share?
The opening line to our own company definition of the term ‘brand’ answers this succinctly: ‘Brand differentiates a product or service from others in the marketplace …’
Brand differentiation is to secure a position within the marketplace from which to compete for customers and sales.
Our full definition is as follows:
"Brand differentiates a product or service from others in the marketplace, it assures uniqueness, carries emotional and functional associations and offers a promise that performance will be what customers expect." © 2018 Future Point 4 Business Ltd
It is crucial for any business to know why and how it’s offering is both different from and, ideally better than the offerings of others within the field of competition.
However, as strange as it might sound, I believe a prelude to this is for the business owner to know him/herself well too and to know fundamentally why s/he has chosen to build a business in the first place.
The absence of a clear answer to this ‘why’ question will likely lead to a problematic inhabiting of the business brand and thus affect the efficacy of its ability to compete. The business owner’s inhabiting of their brand will be lacklustre at best.
A passionate inhabiting of one’s business brand is the dynamo of the business itself. It's what drives the business to know its offer, its audience, its competitors and its challenges well.
What follows thereafter is performance with an authentic competitive edge and with an ability to legitimately take market share as a natural process and a winning outcome – for everyone!
Future Point 4 Business
Our one purpose is to make your business stronger.