Methods of competition - the methods common in the economy, allowing the company in a market environment to attract the attention of customers, develop, successfully exist. It is customary to divide the currently known methods into economic and conditional economic ones. The former suggest appropriate behaviors, while the latter suggest the remaining possible attempts to influence the current position of the company.
Economic methods of competition
There are two key approaches: playing with costs, with prices. Influence through prices is such an option when a company resorts to a floating pricing policy. The main task is to make the opponent leave this niche. Often, to achieve the goal, the company puts the price of goods significantly below the norm. The competition method gives the greatest effect if the decrease occurs sharply, unpredictably for rivals. The company adheres to this pricing policy until it succeeds in squeezing a competitor out of a niche. Equally satisfied are the options when the opponent completely ceases activity, and when he chooses another direction as an attempt to avoid barony.
If the applied competition methods gave the desired result and the opponent was removed from the market, prices can be restored to the previous level. In some cases, the company can afford to raise the value above the previous standard. This allows you to compensate for the losses with which the period of competition was conjugated.
Advantages and disadvantages
The weakest side of the described approach to eliminating rivals is the fact that the opposite side can also resort to a similar line of behavior. Competitive competition in the market is often unpredictable, and an accurate estimate can be given in advance only when there is voluminous and correct data on the financial condition of the competitor.
The gain remains with those who have a large supply of money for the period of the beginning of the "battle". As soon as the first signs of competition appeared in the niche where the enterprise operates, it is necessary to tune in to the struggle, from which only one can emerge victorious. However, as practice shows, only large monopolies currently seriously compete in this way, while most of the medium and small companies simply adjust to the generally accepted price level. For such market participants, other forms and methods of competition are relevant.
Costs as a way to deal with an opponent
The main idea of this method of competition is to minimize the costs associated with the process of production and sale of products. Enterprises resort to all legal instruments that allow at least slightly reducing the expenditure component of the business. It is taken into account that manufacturing the same product in different ways can be very expensive or vice versa. The influence is exerted by technological features of production, automation of work lines, and the establishment of an in-line workflow. It becomes very important for the entrepreneur to establish an organized working day - this is one of the methods of non-price competition.
In an effort to minimize costs in the production and sale process, many try to use the most inexpensive raw materials.This often leads to poor quality of the finished product, which, as practice shows, does not stop firms that are immersed in the methods of competition in an attempt to win their place in the market.
At any price!
The widespread practice of reducing costs associated with the production and sales process is to attract cheap labor. This option often goes against the current legal norms of the country. This is not only about the law on the protection of competition, but also on the rules of employment. Enterprises employ illegal, semi-legal workers who are ready to work full time on hard work, provided that wages are low. However, you should not expect that such employees will work really well, producing high-quality goods.
As the appeal to cheap labor, and other methods of non-price competition can reduce the cost of the enterprise. This means that adhering to peers on the open spaces of the price market, the company can count on big profits. The specified methodology is quite typical for both small business and medium-sized enterprises.
Conditional: considering in more detail
There are several methods combined in this group to increase the competitiveness of the enterprise. If the ones described earlier allowed you to influence your opponent, then this group was developed on the idea of attracting more buyers.
The simplest way, which is completely subordinate to the law on the protection of competition, is legal, correct and does not lead to an underestimation of the quality of services - this is an extension of the assortment. The company thus forms a line of offers so that the client can find anything for himself, regardless of his wishes, no matter how specific they are. This applies not only to items, but also to packaging. For example, a classic package of milk - one liter in volume, but to meet the needs of a certain category of customers produce containers of 100 ml, 330 ml, half a liter or a half.
Choice and pricing
As they say in the course of economics in any specialized educational program, applying knowledge of the concept, types of competition can be used to improve the position of the company on the market. How does this happen in the framework of the approach described above? As it was possible to identify, the sale of goods present in stock in different design options is always more than that which is only in one form.
For the enterprise, this type of competition is beneficial, as well as for the client: prices can be set on small packages that are higher in terms of the net weight of the product. The company makes a profit, the client - the goods he needs. Additional tools for this type of competition (the concept was given to him above) is a change in the design decision. The more modern, brighter the product looks, the more they buy it with great desire. It is worth considering fashionable music, popular films - in a word, not even directly related aspects of social life.
And I am the best!
If the methods of price competition involve attracting a customer with a minimum price tag, then the options for non-price attracting attention can be based on a well-thought-out marketing strategy. A properly formulated advertising campaign inspires a potential buyer that this particular brand is the most promising, effective, and advanced. In addition to promotion, it is necessary to pay attention to the support of goods. This allows us to formulate public opinion regarding the brand: it is he who produces the best product.
The manufacturer’s task is to clearly demonstrate that it is his products that are characterized by the best qualities, greatest convenience and other advantages. If the old brand managed to create a good reputation, modern owners of the brand quite firmly support it.At the same time, it is customary to renew old brands so that they correspond to the spirit of the times, the latest trends, but the associative chain formed by years and decades would be preserved.
Well buy it!
Another technique for promoting a product on the market, considered conditional economic, is the imposition of a manufactured product. This option of competitively gaining a market niche involves resorting to all possible tools for promoting a product. It is necessary to fill the client’s ether with calls for acquisition. To do this, use television, radio, newspapers, the Internet, transport - in a word, wherever possible and permissible by law.
Statistics show that if a potential buyer constantly encounters an advertisement for a product that may be interesting and useful to some extent, he eventually becomes convinced that this particular product is better in quality than alternative options. Having gathered for purchases, most likely, a person will stop precisely at a carefully advertised product.
Forward to the future!
Currently, the market is advancing in literally leaps and bounds. Along with this, the applicable methods, capabilities and approaches are being developed. Competition options are constantly being improved, more subtle instruments of influence and customer acquisition are used. This is normal and reasonable, predictable, at the same time it is important to understand that you cannot strive for success at all costs - it is important to comply with the laws of the country in which the activity is conducted.
In pursuit of quality
One of the most effective methods of competition, which allows attracting more customers than competitors at a constant cost, is to adjust the quality of the product. Only support of an already established level is not always assumed. It is necessary to improve the parameters of the manufactured product, to work on adapting it to the needs of the client. This will help attract the attention of the buyer and establish a position in the selected market niche.
By resorting to non-price methods of competition, an enterprise gains ample development opportunities, and it is possible to concentrate on strategic issues, developing effective approaches to improving product quality. If non-price competition is inherent in some market segments very strong, we can say that there are high-level market relations. It is equally beneficial to both producers and consumers.
Non-price competition: when is this the only option?
There are such conditions of activity within the market when the only possible development option is non-price methods of defeating an opponent. For example, this is typical when working in an area controlled by a cartel agreement that does not allow for cost adjustments. The main idea pursued by contracting parties is to keep profitability at a given adequate level. The market regulator may introduce additional restrictions that do not give the enterprise the freedom to adjust pricing policies.
In some cases, within the market, price competition can be available only by lowering the cost, but for the enterprise this approach is unacceptable due to very large expenses in the process of developing and manufacturing the product. A similar situation occurs if the company is forced to bear the high costs associated with the distribution of goods. Both options force to resort to non-price methods of competition as the only possible. Finally, this is the situation for companies operating in an overloaded market, when the buyer has a large selection and the acquisition is not determined solely by value.
Non-price competition: what does it look like?
The simplest option is to adjust the characteristics of the goods being sold.If you improve your position or introduce fundamentally new ones to the market, you can increase the value for the consumer. With the first option, the ability to differentiate properties that are significant for the buyer becomes important, and the conclusion of new products involves the differentiation of products.
Yesterday Today Tomorrow
Improving the quality of the manufactured product, its features and parameters is effective if the company is interested in deeper penetration into the selected market segment. Some organizations resort to the idea of concentrated marketing when they select a narrow segment in which the organization seeks to occupy a leading position. Another option is to improve the service in the process of selling goods and services after this point. The most effective methods of this approach allow us to convince the client that it is profitable to work with the seller and he buys more products. The more items on the check, the better for the firm.