Competition and fellowship, what's the big deal?
This week we continue this discussion about brand fellowship. Greed is a common factor when a company decides it wants to grow market share to the point of crushing the competitors! This concept goes back to a now retired CEO for McDonalds when he said,” if we served beer and wine, we might eventually have 100% of the food-service market!” This of course is very unlikely. The laws of expanding a brand suggest the opposite. When you broaden your brand you weaken it, which is exactly what happened to McDonalds. The fast food exec’s decided they should go after the adult market by introducing the Arch Deluxe. The more they promoted this “new adult sandwich,” the more market share dropped causing them to eventually drop the Sandwich all together. This brings us to a very important point, not only should the dominant brand tolerate competitors, they should welcome them. What was the best thing that happened to Coca Cola? Pepsi-Cola! It’s ironic at the time that Pepsi started that Coke fought in court the right for Pepsi to use the word cola. They lost and the soft drink industry has grown like gangbusters ever since! If you have a choice, this stimulates demand and good competition between companies makes people more aware of the category. Sales go up.
The power of fellowship is evident in every city in the USA. Take used car dealers for example. A used car dealer might have trouble making it alone, but you’ll find many-used car dealers clustered along car dealer row that do make it and actually prosper. That’s the power of fellowship. The ski resorts of northern Utah will do much better because of the many close destinations and variety of skiing offered than if they try to own the industry and kill the competition. The more the marketing guru’s for these beautiful resorts realize this, the bigger the market share of skier’s they will attract. Branson Missouri is an excellent example of fellowship. With a population of around 4000 people, one music theater would be hard pressed to make it, but with fellowship over 40 music theaters are doing well and making money.
The point is welcome competition, it creates more interest in your category, which in turn grows the awareness and increases the dollars spent. Spend your time and money marketing your category and promoting where you fit in the category. Where you find a McDonalds, you’ll usually find a Burger King. Burger King knows it will probably never eclipse McDonald’s in sales, but they know they will get a bigger market share when they are next to them as opposed to being alone and away from them. Welcome competition, and then be better. We find a great deal more fun in watching the 100-yard dash in the Olympics when they run against each other rather than running alone against a clock! The bigger the pack of competitors the better. Just do a better job preparing for and running the race. Till next Monday…..