Out-Competing The Competition – The RIGHT Way

Most businesses have failed to learn from all the other competitive disciplines before them. You fight one competitor at a time, and you develop a strategy that beats competitors one at a time. There is no competition – there are only competitors.

I tried to understand why so many businesses fail to build competitor-specific strategies. I believe this is based on three reasons. First is the real lack of strategy at the brand level. I believe that while strategy is widely employed in plotting the future of the firm in terms of what businesses to buy, what countries to enter or what resources to own, little strategic attention is given to how one brand will beat another brand in the market.

If strategy is the way a brand endeavors to differentiate itself positively from its competitors, using its relative strengths to better satisfy customer needs, then the brand manager must know the strengths of each of the competitors. In many cases, brand-level activity is just planning and not strategy. Planning is specifying exactly what you intend to do next year (or for any other time period). Strategy is specifying how you intend to beat a competitor.

octcMost of what I have experienced at a brand review is telling the company what the brand manager intends to do and how much it will cost. I sincerely believe that the review is more for financial planning (which is critically important) than for specifying how companies will beat each competition. In many cases the plans present a “hockey stick” forecast. You know the scenario: Sales have been going down for the past five years, but next year we plan a 5 percent increase in sales by doing more of the same thing we did in the past five years.

The second reason for a lack of brand strategy is the impact of America’s downsizing efforts. The front-line marketers just don’t have the time or money to devote to determining how to win the war. They are too busy trying to win the war.

Finally, the third reason is that most brand marketers are not really trained and educated in strategy. I know that most brand managers have MBAs from leading schools, but keep in mind that an MBA is by definition a general degree.

The military and sports groups have an advantage over business. The military have the war colleges where candidates are brought in and told, “Beginning today you will no longer fight the wars, you will determine how the wars will be fought.” And sports teams have coaches. Their only duty is to decide how the game will be played, and they leave others to play the game.

The distinction is less clear in business. In fact, in business we frequently see top executives rolling up their sleeves and getting into the battle. Some executives have told me they don’t feel productive unless they are out in the field selling.

I might add that in the military, most officers start out learning how to fight a war, and in sports most coaches have been players. But in business, many brand managers actually brag that they never had to do any selling. They moved straight from their MBA to brand management, especially if they came from a well-known school.

I have also seen some really good competitive strategy. I once worked on a project for Campbell Soup Co. – during the Gordon McGovern era – where I was given the results of the past two years for CSC and the key competition. I was asked to create the plan for the next year for the competitor as I thought that company would do it. Campbell then used the possible competitor’s reactions as input into its strategy.

I also worked with another company that played war games. One side was assigned to be a competitor and was asked to develop a plan to beat the host company. No one wanted to be the enemy because it meant they had to articulate the weaknesses in the host company, which everyone is loathe to do.

To win the marketing wars, food companies must again make out-thinking the competition the path to success. Out-spending or just putting your head down and charging straight ahead will lead only to lower profits and lost opportunities from potentially successful products.

Let me make a couple of recommendations. Insist that a clear strategy exist for each brand, and write it down. Make sure everyone can recite the strategy. I once visited a Wal-Mart on a best practices tour. Before the tour the assistant store manager met us and said he wanted to share with us the Wal-Mart strategy, and then his store strategy, so that we could understand why they were doing the things they did in the store.

In another example I was at an advertising review. The senior vice president came in and said, “Let’s begin. Where’s the strategy?” The brand manager started to recite the strategy and was rudely interrupted by the vice president. “Do you have a written strategy statement?” he asked. “No,” replied the brand manager. The meeting was canceled, and the brand manager was fired shortly thereafter. The vice president could think of no action worse than planning a tactic without the strategy.

Make sure everyone spends time understanding what the competition is doing and why. Try to emulate Gen. George Patton, who said, “I have studied the enemy all my life. I have read the memoirs of his generals and leaders. I have even read his philosophers and listened to his music. I have studied in detail the account of every damned one of his battles. I know exactly how he will react under any given set of circumstances. And he hasn’t the slightest idea of what I am going to do. So when the time comes, I’m going to whip the hell out of him.”

Have regular post-mortems on past marketing programs, both winners and losers. Learn what has been successful and what has failed. Develop an analysis of the tendencies of each competitor.

Food companies must make total understanding of the competition an essential part of the brand activity. Plans must include specific statements of how the brand intends to beat a competitor – not “the competition.” Brand managers must get back to deciding how the marketing wars will be fought, and let the fighting take place in the market.

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| October 8th, 2015 | Posted in Business, Marketing |

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