“If you don’t have a competitive advantage, don’t compete” according to Jack Welch the legendary former CEO of G.E. It is important for a business to know nearly as much about their competition as they do about themselves. Knowing your competition is the first step to differentiating your brand in the customer’s mind. Unfortunately, many network marketing brands promote themselves as if there were no competitive products. You often hear phrases like “our product is the first to ______”, “the only product to offer ______” or even worse, no mention of competition. Many base their claims of uniqueness on specific features that a customer might or might not see as meaningful. Every brand has a set of competitors¬ that is, other brands or products considered similar enough to be substitutes.
Many companies have a tendency to think too narrowly about their competition. However, corporate marketers define competition on four levels. For example, think of Coke. At the brand level, it competes with Pepsi; at the product class level, it competes with all soft drinks; at the form level, it competes with all bottled drinks including bottled water and at the generic level, it competes with all foods and drinks.
Let’s see how this might look for a fictitious nutritional drinks made from the Açai berry.
1. Brand competition consists of other brands offering the same features. For example, a network marketing brand Açai Plus competes with all other brands made with açai berry including Fruta, MXT and several other retail brands made with açai berry.
2. Product class competition consists of all products in the product category of nutritional drinks. From this perspective, the Açai Plus brand competes with all brands of nutritional drinks. Many are made with other unique ingredients like mangosteen or seabuckthorn berries. Unless the consumer understands the differences between these ingredients, they will see one as interchangeable with another.
3. Form competition consists of the wider world of nutritional products, not just in drink form, which promises to fulfill the enhanced nutritional customer need. In the network marketing and retail world, there is a multitude of brands. Again, unless the consumer understands the differences between forms they will see one as interchangeable with another.
4. Generic competition, consists of all products that compete for the same consumer dollar. Our original set of açai juices also competes with all food and drink purchases.
Why is it important to understand levels of competition? Because your brand not only competes with other brands, but your product competes with other products regardless of brand. Competition is most intense at the brand level, but it also exists at others. So if you are a distributor for the Açai Plus brand, you may need to convince the prospect that nutritional drinks are superior to other nutrition delivery systems (e.g. pills). Then you may have to convince them that the açai berry ingredient is superior to other ingredients (e.g. sea buckthorn berry). and finally, you must persuade them that your brand of açai berry juice is superior to all other brands of açai berry juice.
Implications for Your Marketing
I hope you see the enormous implication of this series of hurdles. The most immediate implication should be glaringly obvious. It will be easier to prospect the person that already uses some kind of nutritional enhancement product. It will be even easier to prospect people who already believe that nutritional drinks are superior to other nutritional product forms. It will be easier yet to prospect the individual who already believes that the açai berry is better than other nutritional berries or ingredients. With these three hurdles crossed, all that remains is to convince the prospect that your brand of açai berry juice is superior to other açai berry juice brands. Now you see why “cold” prospecting is dreaded by most people. You may have several hurdles to jump with any given prospect, and you will not know which until you probe. Target marketing is much more likely to lead to successful conversion of a new customer.