There’s a New Kid in Town

With today’s competitive intelligence tools, internet alerts, plus your own customer relationships, it is rare that anyone is surprised by a new competitive entry. What is often surprising is when that new product takes off and starts to eat into your market share. That requires a response.

Where to start

Your sales team, no doubt, can get the marketing and sales materials for the new product from one of your customers. Purchase their product as well to begin your own rigorous assessment. Now do a deep dive into a series of questions.

  1. How is the new product being positioned, and what is their point of difference? What is their target audience and what is the primary messaging? Does the product truly offer a unique value or benefit? Are they onto an unmet consumer need, or a new market segment? Or have they simply raised the bar with somewhat stronger marketing and messaging?
  2. Have your R&D and product teams evaluate the new product in depth. Is there a new ingredient, formulation or packaging innovation that is fueling their success? Is the product performance superior to yours? Do they have any consumer preferences testing data or claims? Based on your best guess, do they have a cost advantage or disadvantage?
  3. What do your customers think of the new product? Get the honest opinion of the customers you trust most. Is the new kid a winner, or just a flash in the pan? Does it represent a genuine threat to your sales going forward? And most importantly, why? Are the early results simply due to deep discounts and promotional deals?

Don’t take too long to pull these threads together. Then gather your team for a consolidated assessment. Ask the tough questions to get to the answer to “how much trouble are we in?” If you determine that the product is a breakthrough and is superior, you may want to do some consumer research head-to-head. Or better yet, if you have a prototype new product that has been in development, test that match up. If that consumer product research demonstrates that you are in a weaker position than the competitor, then it is time to get to work. And we are here to help in formulating a thoughtful response plan!

Time to roll up the sleeves

If the consensus is that the new kid has exposed one of your vulnerabilities, then a rapid response is necessary. Likely you will want to step back and challenge your thinking about the market opportunity, your market position and go-to-market strategy. How large is your target audience? Is that target audience growing or shrinking? What is your market share and trend over time? Is there an unmet or underserved market need, and is that need likely to continue to grow? Is consumption per capita trending up or down?

OK, you conclude the market opportunity is still attractive. How about your prospects? Do you have one or more competitive advantages? Are they sustainable? Can you further leverage your capabilities to enhance your product or packaging? How fast can you get that done? In the clear light of day, what are your true strengths and weaknesses? What is your point of difference, and how well do you communicate that unique selling proposition? Is your product available (in the right sizes and flavors) in all points of distribution, including the top eCommerce sites and traditional retail?

Let the battles begin!

Your extended team (top company leaders and agency partner) are unified that you are in it to win it. Increase the odds of winning by following these strategies:

  1. Play to your strengths. Showcase your product, backed up by consumer testing claims, your superb customer service track record, and your avid consumer fan base in your competitive response messaging to your customers.
  2. Leverage your scale. If your company in the aggregate holds the market or category leadership position, you are the top god and typically can call the shots with the trade. Your deep and enduring customer relationships matter, as do your vendor and supplier relationships.
  3. Focus on the numbers. Your retail customers care most about dollar profits per square foot of distribution and number of turns per month. Do the math to demonstrate those profit metrics, and trends, month over month. There may be a compelling story there that the new kid will not like.
  4. Test the resolve of the new kid. While not our first choice, pricing can be effective, particularly when tied to performance. Consider offering short-term discounts that match or beat the new competitor. They may not have the fortitude to stand toe-to-toe for an extended bout.
  5. Raise the bar. Get your ducks in a row and introduce your own innovation that takes the wind out of the sails of the new kid, particularly if you can secure a product superiority claim.

At Forge, we thrive on helping clients get to the next level. We have worked with many clients charting a path to meet competition head on. And in some cases, reposition a brand to address blind spots or vulnerabilities.

We are here to be your partner, a member of your extended team, an objective yet vested voice. And we will always bring the conversation back to strategy. Who is your primary target audience going forward? How does your product meet and exceed their needs? What are the best ways to enhance your product portfolio? How do we maximize the market opportunity and optimize return on investment? 

Importantly, we are pragmatic, focused, and energetic. We get assignments done well, and quickly.

Take the first step to a more successful business today.

1.    Hit “LET’S TALK” to schedule a free 30-minute discussion. No pressure – we promise.
2.    We’ll provide real-world case studies showing the process in action.
3.    If we’re a fit, we finalize the details and get started!

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