How to take care of business in a competitive environment: a guide to holding firm, by Sarah Spivey, managing director at Modulift.
Christmas is coming—it seems to arrive earlier every year—and the Coca-Cola truck is doing its rounds. The vehicle has become synonymous with the festive period; we almost don't need the accompanying 'Holidays are Coming' theme tune to remind us that it's the party season and we can all up our intake of the brand's fizzy drink, or something stronger.
It's great marketing and seasonal sales must soar. So why doesn't Pepsi drive its own truck around the world to the tune of an equally catchy jingle? Because they've got a pretty good commercial team of their own that understands it wouldn't work. Father Christmas in a blue suit sipping from a can wouldn't have the same effect. More likely, it'd impact Pepsi adversely and draw more attention to the red original.
Coca-Cola considers its partners carefully: Father Christmas and McDonald's, for example. The fast food giant and Coke go together; they're two market leaders feeding—literally—off of each other's status. Imagine if McDonald's ditched Coke for an unknown brand of soda; it wouldn't feel right. The impression we get as consumers is that these brands are good enough for each other and only the best beverage can accompany these burgers, and vice versa.
That doesn't mean anyone can accompany burgers with fizzy drinks and make a million. Of course, the marketplace, like most, is saturated with alternative options, but they're not as successful. Coke and McDonald's have a long history of quenching the thirst and feeding the appetite of the world's fast food junkies. Both are brilliant businesses. McDonald's is probably the most exemplary systemised business model on the planet; it tastes the same the world over regardless of the culture of that geography or the staff preparing and serving it. The dollop of sauce is the same size and the fries are of equal length. They can multiply and repeat, over and over and over again.
If anyone is cooking up an idea to compete, they'd be better advised to enter the market with a new idea, rather than try to compete with the industry's top team. People need to eat and they like convenience food, so what can be done with a pizza, burrito, sandwich, chicken, etc. that isn't already out there? What about a healthy option? Who are our potential customers? And how can that idea be marketed? These are the kind of questions it'd be wise to ask.
Yet, every market is full of copycats. And the real takeaway from this article is how established businesses should react to protect themselves. It's prudent to understand intellectual property, copyright, patents and trademarks etc., but the reality is it's impossible to stop a company competing with another by implementing the same business model. They can't call themselves by the same name or, in most places, copy the logo, but the tactics by which a business markets, sells and makes a profit can be replicated. Thus, it's necessary to be prepared.
As McDonald's and Coca-Cola recognise and respect in each other, successful, established businesses have a culture and backstory that goes much beyond what they sell. Their relationships with customers are deeply engrained, often over generations. Perhaps children were given a McDonald's or sugary drink after school on a Friday or if they were well behaved. They remember cinema dates that were preceded with a burger; sponsorships and advertising campaigns that coincided with major events; all the times when starvation was taking over and a service station restaurant came to the rescue. People even say they want a McDonald's or Coke when they're only really thinking about fast food generally and a drink. That's the power of mega brands, their marketing juggernauts (or trucks), and their partnerships.
So what do these power brands do when a competitor enters the marketplace? Nothing. The biggest mistake an established business can do is lower themselves to the level of a newcomer to the market. Go nowhere near them. It's particularly dangerous to engage in any warfare based on price. A market leader might well be charging a premium but that's not what separates them from competition. Of greater value to a customer base is the quality, expertise, experience, longevity, relationships and more that are all hallmarks of market leaders.
Supplying the same product and, as we've explored, entering similar partnerships, doesn't entitle a business to anything. Take our Active Link, for instance, an innovative load monitoring spreader beam with an integrated Straightpoint (SP) load cell. We might not quite be McDonald's and Coca-Cola but we're world-class brands in our sector and, in the below-the-hook world, we're zenith businesses. Putting another spreader beam and load cell together wouldn't carry the same weight.
Stand B5 at next week's LiftEx trade show serves as another example. There, we combine with SP and Crosby to bring together a trio of power companies at an exhibit underscored by the tagline, 'trusted global brands'. Notice that when McDonald's chose a confectionary supplier for its McFlurry range of ice creams, it went with Cadbury, knowing the continuing importance of keeping the right company and providing consumers with the generally accepted 'best' product.
Don't look down from the top of a marketplace; there's nothing to see. Stick to the customer centric business model that has taken the company that far and pull further away from the competition. It takes courage but don't give a loyal customer base a reason to move and certainly don't let them feel that a newcomer or upstart is a threat on any level. Be that good that people want to be associated with the brand and its chosen partners.
Thank you for reading!
Managing Director Modulift