It is ironical, defensive marketing is done only by the fittest

What we learn in schools is that only the weakest have to be defensive all the way. But in business it is the other way about. The fittest have to resort to defensive marketing as business strategy to forestall competitor advances.

The challenge arises when a market leader is alarmed about a new or existing competitor bringing out a superior product with lower price, better quality and advanced features that have the potential to appeal to its own customers. At this point the score is getting equal and the tendency for the challenger to scoop market share is now real.

Failure to respond to this newest offensive could result in two ways: one the major chunk of customers might walk across the road to the attacking firm and start using the new product. Second and most debilitative one is the expected bad press that can play havoc in terms of company reputation and fall of its share price in the stock market reducing its capitalization value.

In order to stem the tide of competition firm must ensure two things: one is to do everything possible to protect the existing customer base. Second is to explore new customers joining its base. Singular objective is the denial of new product making inroads into firm’s customer base or building product acceptance outside.

To operationalize these objectives firm need to look at three main areas: product positioning, psycho campaign and customer loyalty improvement. Product poisoning is the key to fight any new innovation in the market. Google did this in a unique manner. Faced with new competitors in the horizon it used high tech to make product upgrade in search market by introducing “cloud technology”. This served twin purposes: one it forestalled competitor gaining foothold and secondly it raised the competition to higher level where the new entrants have to toil more.

Social engineering via psychological warfare is the second type of defensive mechanism. This conveys to the market that firms’ product is superior and the one by the challenger is inferior. Moreover, enhancing brand loyalty is carried out by undertaking promotional drive and targeted advertisements.

Loyalty plus is the third method which is much easier to implement with good results. Here the aim is retaining customer loyalty to the firm as a whole and encourage new customers to join the band wagon. Several inducements are given for this purpose. Gift vouchers, price coupons and “Buy 1 & get 1 free” are some of the popular tactics. Most companies in retail trade such as Wall Mart do this exceptionally well.

 

Cheers!

 

Muthu Ashraff

Business Strategist

Mobile: + 94 777 265677

E-mail:   cosmicgems@gmail.com

Blog:   Business Strategist

Why Google would not fight Bing head on?

When someone asks you to look for info most of the time you hear the expression ”Google it”. So much Google is associated with the concept of internet search that its name implies the search itself. Yet nowhere Google is seen attempting to dislodge Bing from the market. What is the reason?

Before answering the question, let us do a comparative narrative of the two search engines:

1. Market share: Google has on average 65% of the search engine market whereas Bing is around 7.5%. But its associate Yahoo provides much of the margin with 17.5% thereby making an overall 25% of the share

2. Brand name: Since starting in 1997 Google continues the same brand name and there is wider recognition of its name leading towards ready acceptance. In contrast Bing is the third generation brand which was previously known as Windows Live Search & MSN Search

3. Advanced features:  Google offers smart search & image search features that brings numerous results in vast range. It gives info on movies, weather, currency conversion, shopping and many items that both business and households look for. Bing is strong in its video search, entertainment, flight info and features that are distinct yet useful

4. Technology:  Google has user friendly interface with sophisticated but speedy delivery. Besides Google is fully integrated with the other line of products under its watch. Bing on the other hand does not provide seamless integration with Microsoft products. Neither it boasts high tech environment

5. Demography: Google attracts white colour young people who have fair knowledge of info technology and most of them are ready spenders. Bing brings in fairly older people who are less techy and most of them having blue colour jobs. However, it has saving grace in the form of children who like and use Bing more than Google

6. Coverage & reach: Google has global reach covering many countries and cultures except for the Asian Tigers:  China, Japan & South Korea along with Russia. Viewers of Bing are mainly concentrated in USA where it has 85% of the market. Significantly 80% of them use Microsoft Internet Explorer

It appears that Google is in much stronger position to thrash, Bing in a head-on fight. Yet business strategy of Google opts for healthy competition instead of going offensive. There are two reasons for this posture: first Bing is supported by the Microsoft Group that has immense financial muscle. Second and most significant one is that Bing has exceptional reserve power in the form of moving up-scale in short notice and undertake counter offensive as and when it is necessary.

 

Cheers!

 

Muthu Ashraff

Business Strategist

Mobile: + 94 777 265677

E-mail:   cosmicgems@gmail.com

Blog:   Business Strategist

Get the brass stacks on types of business offensive

In business strategy, offensive is the sum total of aggressive posture and projection of power by dominant firms. The goals and objectives vary according to the two types of offensive: market and industry. Here are the brass tacks:

Market offensive

Similar to theatre centric offensive in military warfare market offensive is limited by geography or location and the attack is made mostly as a pre-emptive one to dislodge a weak competitor. Here the initiative rests with the attacker who must ensure that the targeted opponent either close shop or make tactical withdrawal from the market for a considerable period of time.

While market offensive leads to operational and/or tactical victory this is not going to be the final outcome as some other firm can replace the vanquished opponent. This type of offensive is much prevalent in the Techno market where defeated firms can come back in new clothes or join with some others to make a re-entry.

Industry offensive

This is similar to strategic offensive in the military arena. Here the focus is to use multiple campaigns not limited to a single competitor or location but make a huge foray into the industry as such world-wide. The domains of competition covers products, companies, product promotion & distribution, techno innovation and sometimes unethical forms including guerrilla attacks on fairly dominant players who would potentially succumb to these methods.

Before undertaking industry offensive the attacking frim must do extensive and thorough planning and do so many war games in the corporate board before plunging onto the offensive. There must be definite goals sought by the attacking firm that could fundamentally alter the industry as a whole and in the wake of it making many a competitors to bite the dust. Seiko watch makers adopted this industry offensive successfully to dislodge the entire Swiss watch manufacturers as well as watchmaking industry world-wide.

 

Cheers!

 

Muthu Ashraff

Business Strategist

Mobile: + 94 777 265677

E-mail:   cosmicgems@gmail.com

Blog:   Business Strategist

Seven pluses of an offensive mind-set

Being offensive in mind-set is something a go-getter has in his DNA. Similarly in business strategy, offensive mind-set gives a firm a great edge as against its competitors in the short-run and if properly managed the gains can last in the medium term too. Here are seven pluses a firm gets when it goes on offensive:

1. Moving first and fast is key benefit that comes from an offensive mind. It basically means that firm is in proactive mood. Firm can identify the weak links in the competitive posture of its opponents and pounce where it can hurt them severely and surely.

2. Attacking is the second most important gain one gets with an offensive mind-set. Firm is always prepared to attack before the opponent gets ready for an attack or a counter-offensive

3. Attacking has a definite companion: speed. Unless you attack with speed and surprise your offensive might peter out. Fast & nimble, undoubtedly are the best boons firm gets when it moves in with an offensive mind rather than dilly dallying.

4. Dominating is the next important plus point. When a firm is in domination position it gets two-pronged benefit: one is command the other one is control. As in military strategy, command & control are twins that are joined in the hip. One gets stuck means the other one fails too. Put in other way, if firm loses command it is certainly going to lose control. Companies that have market dominance not only control the price but commands barring of entry into market by potential competitors

5. Offensive mind is always associated with being positive. Firm is perched on “Go for It’ as the binding mantra which propels it to make right decision at the right moment.

6. Timing consequently is the big plus point. Time is always in essence when it comes to initiate anything. A firm having offensive mind-set wait for the right moment to attack where the competitor is defenceless or his defences are in disarray. In strategy execution time is the more critical aspect. A well-timed move brings the opponent to the knees. More than that, the dividends of an offensive are manifold

7. Finally it is adulation. Be it in military or business the party who makes the first move get much more media coverage, may be little negative things are also published. Yet the fact any publicity, good or bad is good at the final count. Media coverage gives a sense of dejavu to the staff of the firm and high degree of adulation from the market for the firm as a whole.

 

Cheers!

 

Muthu Ashraff

Business Strategist

Mobile: + 94 777 265677

E-mail:   cosmicgems@gmail.com

Blog:   Business Strategist