Challenging by Competitive Advantage-

The new marketing Paradigm

By

M.Sarath Chandra W.Sai Abhishek Rao

140610672072 140610672065
Bhavan’s Vivekananda College Bhavan’s Vivekananda College
Ph: 9985043490 Ph: 9949002687
Email:sarath_mn@yahoo.com
Abstract: A little competition can be healthy but at the same time it can also be both costly
and disastrous if one is not on par with others in particular business or industry. How a
company handles competition is the direct link to the success or failure of the company. So,
many of the companies have marketed their products or services to sustain in the market
through established marketing techniques.

This paper mainly discusses about the new way of marketing strategy which has come
into existence i.e., challenging by competitive advantage. Competitive advantage is what
separates a company from rest of the competitors. Companies are giving an open challenge to
the competitors based on their competitive advantage. In the recent times, consumers have
come across two popular challenges: “PUREIT One crore challenge” and “Rin One crore
challenge”. By offering a staggering amount, the company has been conveying its confidence
in the brand’s promise and has been challenging competitors to meet its promise. In a
majority of the cases studied through this paper, such a strategy seems to help companies
sustaining in the market.

I. Introduction

Marketing Activities become more competitive and the best marketed goods only
would be sold in the market. Consumers are choosing better value for their products for their
hard earned money, hence providing better value for customer is the main challenge for
companies in the present economic scenario. So, the entrepreneur has to promote his products
quickly through time based events, exhibitions, trade shows, sports events, sponsoring to
various cultural programmes in the country and participating various societal development
activities and operational activities are to be integrated to get a concrete solution for
withstanding the competitions. Winning companies aren't successful by accident, though
often it may seem that way. A closer look usually reveals that most have sized up their target
markets and zeroed in on a unique approach to meet customers' needs, values and
expectations. Through important considerations like location, product, services and product
features, they have somehow found a fresh spin, a new way to offer buying incentives that
similar companies either can't or don't offer.

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A Business has good products and/or services, good people working and a list of good
Customers, but:
• Business is a constant struggle against steadily increasing competition.
• Best customers are becoming increasingly difficult to satisfy
• Prices are steadily going down and you are forced to make creative cuts in cost structure
• It’s increasingly difficult to differentiate value to customers and what was once a preferred
product and/or service is now feeling like a commodity
If any business is suffering from any one of the above situations it is nearing the end of the
useful product cycle. If it is experiencing two or three of them, business is in trouble and
immediate action is absolutely required to save the company.
The typical response to these nagging issues is product creativity and the marketing
strategies which a company is following. There are many of marketing strategies which
became common in the time run and as said earlier marketing activities became more
competitive to the companies. In this context some companies are following new techniques.
They are creating the competitive edge of their product and going for the challenge through
their competitive edge on competitors to create a confidence on the product in the public.
Having a competitive edge means possessing an advantage over the competition. This does
not take the luck of the Irish, but rather some solid strategic planning.

II. Developing Competitive Advantage –most valuable business asset!

Competitive Advantage is what separates one company from the rest of the field. It is what
keeps business alive and growing. Many companies start out with a good idea, product or
service that catches on. But as time passes, anything that is a good idea will either be
duplicated or surpassed by competition. Some companies have a strong competitive
advantage but fail to promote it. Or they don’t realize they have a competitive advantage so
they don’t build on it. Competitive advantage should be the foundation of all of strategic and
operational decisions. If one cannot identify a good list of competitive advantages, then that
company better get to work to create new ones. If one can clearly identify and promote the
competitive advantages, it will positively impact the bottom line. Most companies are
surprised to learn that the benefits their customers are looking for which will differentiate
them from competition, rarely involve price, quality and technology.

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Before one can accurately identify the competition, it's crucial to first define and analyze their
target market. What a company is selling and to whom? Next, it should make a list of those
companies trying to do the same. What are their strengths and weaknesses? Their strategies
and goals? How do they draw in customers? What, if anything, makes them stand out from
the pack?

If one don't have this vital information, get it quickly. Assessing the competitors openly and
honestly will play a key role in helping a company to develop a competitive edge. Once the
company has developed a competitive edge, maintaining it will be a daily challenge. It
requires to look into crystal ball and attempt to forecast where the trends and changes in
industry will come from, and what company can do to stay ahead of the game. It will demand
that one should continuously track their competitors and future plans. One should also need
to recognize that through the course of time their customers' needs may change due to a
variety of circumstances. Company must be flexible and willing to change as well.

Gaining a Competitive Edge

A. Define Company

Before customers can get to know about company, it's important to first know company's
mission in the marketplace. In today's highly competitive world, it isn't enough to simply say,
"I own a card shop." One must define the type of card shop. Is it a card shop for everyone
with wall-to-wall generic cards that can easily be purchased at other stores? Or is it
specialized in unusual cards, thus attracting those people who demand cards that are unique
and not readily available at other locations?

One should ask himself the following questions:

 Is the product or service unique, and if so, why?

 Is the way one operating his business is unique?
 Are there other markets that could benefit from the product or service?
 Are employees a key asset that sets business apart from the competitors?

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B. Define Competitors

Now that one has a clear understanding of what the company is, he must make a list of all
competitors and track them on a regular basis. In order to compete, a compnay should
compile the following data about each competitor:

 What are their strengths?

 What are their weaknesses?
 What are their capabilities?
 Who is their customer base?
 What are their revenues?
 Are their profit margins growing?
 What are their promotional and marketing strategies?
 What are their current offerings?
 What are their future goals?

Gathering data on all competitors could, in itself, be a full-time job. To make it easier one
should realize up front that tracking each and every competitor every day of the week is
probably an impossibility. Therefore, one should break his competition into categories and
prioritize them, asking himslef who poses the biggest threat. The following are suggested
ways to categorize competitors:

Priority #1: Head-to-Head Competitors

These are the companies that compete directly. Products are similar. Customers compare in
terms of price, quality and service. These companies should be tracked on a weekly basis.

Priority #2: First-Tier Competitors

These Companies compete, but not for everything. They may try to woo a particular kind of
customer, or they may be similar to one’s company only in a certain area. This is an
important group to stay on top of because they may decide to expand and compete more
directly. One should track them at least one to two times per month.

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C. Identify Customers

The next important step is to clearly define the customer base. A good way to identify what
customers want is to talk with them and really listen to what they have to say. Customer
feedback can be a cheap and invaluable tool in creating a competitive edge.

D. Differentiation

In today's crowded marketplace, consumers have lots of choices. In order to gain a

competitive advantage, one must give customers a reason to choose his product over the
competition. While lowering prices is certainly a viable way to reel customers in, there are
other things one can do to make the company unique simply by using a little imagination and
creativity. The following are ways to differentiate product and/or company from competitors:

 One should look at what competitor has to offer. What new spin one can put on it?
 One should assess the product. Add any new features that might make it more
desirable or useful than competitors?
 Company should think of new uses for old products or new ways to package or
bundle your offerings
 Company should analyze the marketing strategy. Are there ways to use promotional
campaign as an advantage?
 Company should think whether it can provide exceptional customer service, hours of
operation, guarantees, etc.?
 Are there any special services one can offer to customers that competitors don't?

H. Marketing Strategies

Now that company has a fabulous product, it's time to take it out into the world. It would
never think to venture into a blizzard without the proper snow gear. Why? The company
knows hat it will not survive. Likewise, one should never venture into the market without a
specific strategy as to how to sell the product. A good place to begin is with the competition.
One should look at companies with similar products and analyze how they have marketed
them. In what ways have they succeeded? In what ways have they failed? One has the luxury
of learning from their mistakes and benefiting from their triumphs. It's an invaluable tool.
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These days, most markets are highly saturated. Without a clear marketing strategy, one
cannot compete with other companies.

III. Challenging through competitive edge

Once the company has established a clear, competitive edge, the tendency might be to coast
for a while. Creating a competitive edge is not just sufficient. Company should implement
aggressive marketing techniques to make people understand about the product’s competitive
advantage. Companies are going for an open challenge using their competitive advantage
against their competitors.

These companies are going for aggressive advertising techniques by offering a

staggering amount; it is conveying the confidence about the brand promise. If any one can
prove or break their challenge they are ready to pay that promised amount of money. It is
courageous on the part of the brand to make such a move. Before going for the challenge the
company should think about the competitors

Think that the company is in the middle of the ocean floating on a raft surrounded by
sharks waiting for one tiny mistake so they can swallow the whole company. That is precisely
what the competitors will do: circling around company, waiting for the moment to let down
the guard just long enough so they can go in for the kill.

Once the company went for the challenge it should be very confident on the competitive
advantage as the competitors will be always searching for the mistakes and loopholes in the
product to break the challenge and make it go out of the market. If they are unable to find the
mistake then they try to overcome the competitive edge by developing the quality of the
product, reducing the price or following the technology which have used in the product.

The company which followed this kind of marketing strategy is Hindustan unilever
limited (HUL) for its products “PUREIT”,”RIN” and “BROOKE BOND SEHATMAND”.

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PUREIT One crore challenge

Launched in India in 2005, PureIt products are the only

in-home purifiers to provide water that’s ‘as safe as
boiled’ without the need for cooking gas, electricity or a
pressurised supply. During 2008, the product was rolled
out to 23 states in India, and reached all 28 by early 2009.
It is now bringing safe drinking water to more than five
million people in a million households.

It came up with the challenge in Aug, 2009.The challenge

was about the features of the product:

 Pureit challenges you that if you find any other in-home water purifier which meets all these
safety criterias, then Pureit will offer you Rs. 1 Crore.

You will have to make sure that it :-

   
• Meets the tough germkill test of USA (that of EPA-Environmental Protection Agency)
   
• Has ‘Auto Shut Off’ mechanism which switches off the flow of water when the germkill
power of the purifier is over and needs replacement, thus ensuring you never drink unsafe
water.
   
• Needs no electricity and no running water – to provide water that is as safe as boiled water
at all times.

RIN one crore challenge

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 Key Facts

 Rin was launched in India as a bar in 1969 with the iconic lightning mnemonic.

 Rin powder was launched in 1994 as Rin Power White

 Rin Matic for washing machines, launched in July 2008

 Sold in developing markets in Africa, Asia and Latin America.

 Sold as Brilhante (Brazil), Rin (India) and under other local brand names. 

The new campaign is aimed at reinforcing the positioning of Rin as "The detergent
that provides the best whitening of clothes"., Hindustan Unilever Ltd (HUL) has launched an
aggressive television campaign titled ‘Rin Safedi ki Challenge’ on channels across the
country. HUL has roped in cine star Kajol to feature in its new communication for Rin. “Are
you ready for the Rin Challenge? If you win, you get Rs 1 crore as prize money,” says Kajol
in Rin’s new commercial.

When contacted by FE, an HUL spokesperson said: “We firmly believe that Rin
delivers superior whiteness vis-à-vis competing brands in the market. The Rs 1 crore
challenge advertising campaign brings alive the Rin’s superior value proposition to its
consumers in a distinct and engaging manner. The challenge is based on established testing
protocols.”

BROOKE BOND SEHATMAND

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Hindustan Unilever Limited has unveiled a unique campaign 'Brooke Bond Sehatmand 1
Crore Challenge' in the country. The challenge started on 22nd March and will close on 31st
December.

This campaign was launched as India faces micronutrient deficiency. More than 1/3 of men
and women in the country suffer from chronic nutritional deficiencies and 60% of people face
Vitamin Intake Gaps

“The primary reason to introduce the 1 Crore Challenge was to let our consumers know that
Brooke Bond Sehatmand is the only tea available in India that promises vitamin taakat to
keep your family healthy at an affordable price. This challenge is a means to proclaim to our
consumers that we care about their needs as Vitamins are important for the overall wellbeing
of the body and better functioning of the mind.”

Analysis:

 While EFL (Eureka Forbes) was doing its bit and more, but when HUL launched the
Rs 1 crore safety challenge EFL couldn't remain silent any more. The Rs 1- crore challenge
of Pureit invites customers to compare Pureit with other brands in the market on three safety
features. It was a challenge by HUL which EFL couldn't ignore because after the introduction
of one crore challenge the sales of EFL has been decreased.

Conclusion

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 In order to stay at the top, one must continuously monitor and evaluate the
competitive advantage. Constantly re-defining and re-inventing company is essential. As one
make changes and introduce new and innovative changes, company shouldn’t be alarmed if
competitors follow suit. As, imitation is the sincerest form of flattery -- and it makes good
business sense. If one continually evaluates the competitive advantage, by the time
competitors begin to copy the strategy, the company will already be three steps ahead and
onto a different approach.

Finally, Company shouldn’t automatically assume that because it is ahead of the

Competitors, it always will be. The truth is, just as easily as the business is on top of the
world, it could be wiped off the planet tomorrow if it isn’t careful. It must always be seen by
customers and competitors as extraordinary. Anything less and it will have lost the
competitive edge it worked so hard to create. Everything changes with time, and what worked
in industry today may not work tomorrow. In order to stay successful and competitive, one
must change and grow along with your industry.

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