How to prosper in a competitive market

The very, very first step of any (retail) strategy is to understand your existing ‘positioning’ and to embrace or adapt a particular position.

But since marketers are often their own worst enemy with all the jargon they use, I will make it really simple. 

STEP 1: List all your competitors. For this exercise, concentrate mostly on the direct competitors.) Set aside the list for a moment. Attempt to include as many as you are aware of.

STEP 2: Name the two things that are MOST important to customers in your competitive market or sector.

STEP 3: Draw a matrix and label each axis according to the two attributes you identified.

 

For each axis the bottom/left corner is the LOW score and the top/right area is the HIGH score.

 

Now review your list of competitors and PLOT each one of them on the matrix.

Here is the difficult part. It is easy to always include price, but it is not particularly helpful – If you can ignore price, identify two other variables. ‘Convenience’ is often also a cop-out because it almost always applies to all categories to some extent.

In the ‘real’ world this is not an easy exercise, because some businesses may for instance choose ‘quality’ as a key positioning attribute. But how do you score yourself and your competitors on quality? The same applies to an attribute such as ‘convenience’ and so on.

But don’t let these difficulties stop you now. Simply use your instincts to plot yourself relative to your competitors in the next step. (The most difficult part is to be honest and to admit that your competitor is ‘better’ on a particular attribute.)

Avoid central tendency (everything in the middle)

Finally plot yourself on the matrix.

You will end up with a diagram that may look something like below; where your competitors are the yellow stars and you are the white star.

THE TAKEAWAY FOR YOU

If you are surrounded by competitors (no white space) then you don’t have a distinctive positioning.

If your POD (point of difference) is NOT one of the two attributes mentioned, then you are differentiating yourself on an irrelevant attribute.

If you don’t have a distinctive positioning, you need to reinvent your business.

Have fun

Dennis

Dr Dennis Price is a consultant, trainer and speaker working with the retailers and the supply chain to effectively implement their brands on the consumer frontline with the right skills, strategies and systems.

  • PS: We are drafting the final newsletter for 2012 at the moment. Drop your email in the box HEREto get exclusive access when it is published…
  •  PPS: If you are looking for an eBook that will address everything you need to do for your business to Jump the Curve, you will find it HERE. (It is not specifically about positioning, but a practical means to operationalise your strategy.)