Explained: How to beat your competition by dominating the market share?
This is the second article in the Marketing series. The first article talks about identifying the right markets for your product. If you haven’t read it yet, please read it from here.
We are all participants in the world market. Each one of us is selling a product/ service to survive (sparing monks & priests). The consumer base of our product decides our success and position in this world. Doesn’t matter if you are a writer, singer, TV manufacturer, or pharmaceuticals company, you want to increase the market share every day.
This article explains the techniques that are used by leading market research firms to help their clients dominate the markets. Some of them can be done by you without sharing a penny with the firm. And even when you consider a research firm with your question, having the points in your mind will help you decide how much they are evaluating before responding to you.
Understanding the market
If you belong to the space of art creation, then your market is the audience/ readers that engage in your work. If you belong to a manufacturing company, then the market is users who buy your product.
Absolute numbers don’t usually convey meaning in any market. The meaning is often derived from the market share that you hold in the market.
1. Market Share = Share of your product/ Share of entire similar products
2. Market Share = Number of products Sold by you/ Total number of similar products sold
The reason I have used two different criteria for deriving market share is the fact that different companies use different profit margins and follow different marketing strategies. The strategies to identify and influence market share will depend on company to company.
Expanding the market share
The expansion of market share is the ultimate goal for any firm. This expansion usually means three things:
- Expanding in new geographies
- Expanding with new consumer addition in existing geographies
- Expanding with already existing consumers by increasing the demand frequency
The correct expansion usually targets each of the above points with a timeline of actions that need to be taken in the immediate, medium-term, and long term.
Expanding in new geographies
The easiest part of the expansion is to identify new geographies which are not crowded by the competition. It gives you access to a new consumer base that is not biased toward a certain product. A market that is not competitive also offers higher profit margins with low efforts and is ideal for expansion.
These new geographies are explored by looking at various angles such as:
- Economic, environmental, social, financial, & legal regulations that impact the sale of your product
- Patents, Copyrights, Freedom to operate & sell
- Product Demand & need
- Market stability, Environment conduciveness
There are other aspects such as momentum, access to finances, public sentiment, pain points of consumers, etc. which also impact the sales and should be considered for identifying new markets.
This is the strategy that is followed by the majority of manufacturing firms on day to day basis. The expansion of the two-wheeler market from India to African nations is a great example of this type of expansion. The expansion of Chinese financial firms to African and Asian nations is another example of the same approach.
Expanding with new consumer addition in existing geographies
Unlike the previous point, when a firm needs to increase the market share by adding new consumers in their existing markets, they need to make their products better.
You cannot dominate a competitive market with sub-par products. The profit margins in a crowded market are low and don’t offer much space to expand. The expansion here is directed towards adding new consumers by beating your competition.
The strategies in such markets revolve around “Competitive product development”. It is done by analyzing your competition and knowing their unique selling points, their profit margins, efficient practices, their manufacturing secrets, upcoming moves, and other details.
Then a firm needs to offer products that target the USP of their competitor with reasonable prices. Identifying the most efficient manufacturing practices, and future needs of the consumers. The product development is highly targeted to the future requirements and should never offer any room to the competitor for expansion.
Looking at future regulations, consumer feedback, activities of your competitors, and other market developments is the only way to dominate these crowded markets.
Example: Netflix targeted Blockbuster with this type of market expansion. Prime videos and Disney+ are targeting Netflix with this type of expansion.
Expanding with already existing consumers by increasing the demand frequency
The final strategy is to expand in existing markets by targeting the demand frequency. It is a very sensitive topic and can create a bad reputation if not done in the right way.
This is done by making the product addictive so that the consumers don’t stop using it. Some ways to do it are:
- Using consumer feedback and designing your product. A product that is highly customized to the consumer’s needs.
- Identifying consumer needs and designing a product accordingly
- Use chemical compositions to hook your users (Nicotine tablets)
- Using techniques that offer a deeper connection with the product (Bone conduction in audio devices)
- Decreasing the quantity of a product and thus making users buy more
- High advertisements & making the product a style statement
Every firm needs a different strategy and every product demands a different expansion strategy. Once you find the right strategy, then it is all about implementing it and achieving the desired results.