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 The New Competitiveness
According to the magazine The Economist, the new competitiveness test consists in taking all of your competitiveness and dropping it on your toes. If your toes hurt after doing this - it's time to change the way you do business. Why? Because the new competitiveness is built on invisible and intangible elements such as emotions, relations, creativity. The good old marketing mix is still there, but its 4P structure has somewhat changed characteristics. The 4P of the new era is increasingly becoming Passion, Prestige, Priceless and Pleasure. Only in America, in a period of some 15 years, the number of food products has climbed from about 2.000 to over 20.000. In 1995 in Japan, about 1.000 new non-alcoholic beverages appeared on the market. In 1996, only 1% of them were still being sold. There are more and more products on the market and it's becoming increasingly difficult for a company to stand out from the rest. In other words, if you want to succeed, you have to do things differently and stir enough passion and loyalty towards your products from customers that they won't even think of looking for something else. And such passion cannot be stirred by little improvements to existing products. Back in 1996, the American research institute J. D. Power emphasized in its report that 'second-rate cars no longer exist'. Consequently, the difference between the producer and the products is no longer in the engine power, technology, central locking or air conditioning, but rather in their image, brand, experience, emotions, relations. In Tokyo, you can order a Toyota, specially tailored to you, on Monday and the car will be ready by Friday. Levi's, in cooperation with the company Custom Clothing Technology, offers customers the possibility via the Internet to write in their measurements on the web and in two weeks they will receive Levi's jeans "made just for you" (at an additional charge of some 10 dollars). - Your customer is looking for orange products with purple spots. He needs them today and on the island of Fiji. You simply must fulfill the order or you will be out of business, say Nordstrom and Ridderstrale. Therefore, the key to success is offering customers something unique, different than what is being offered by the competition. What about prices? In the past, the main battles with competition were 'price wars'. All competed in offering the cheapest prices. However, customers are not necessarily looking for the cheapest products. OK, you can't really sell them scrap iron for the price of gold, but the relation between the actual cost of raw goods and the labor involved has not for some time now been equal to the selling price. What determines your market price is your image, brand, trade name. Alberto Alessi charges some 800 dollars for a toilet brush, while Gucci sells his handbags at astronomical prices (and he doesn't complain about low sales levels). On the other hand, imitation Gucci costs only tens of dollars, however, women don't 'pass out from joy' thanks to the cheaper imitations. Take some black fabric, sew a simple black dress and you may be able to sell it for a few hundred kunas. Add the Coco Chanel logo to it and you can, without any problems, ask for a few thousand. Of course, we've caricatured this somewhat because you can't just 'fasten' a brand in this way. A brand and image take years to build, but this is what makes your product 'priceless'. And finally, we must not forget to mention 'almighty' advertising. They say that a good product sells itself, however, you can have the best products and services, but you won't achieve much if no one has heard of you. On the other hand, reaching customers is not easy at all. In the US alone, companies spend around 233 billion dollars per year on advertising, while the average American sees a little under 250 advertisements per day. In this sea of advertisements, commercials and information that are constantly pounding consumers, companies are having more and more difficulty in being noticed. However, they themselves are partly to blame for this. They create unimaginative advertisements, repeating like parrots what their competitors are saying ('Powerful against stains, but gentle to fabrics') and then they are surprised that they are lacking the results they expected. Tomorrow the tidal wave of commercials will resemble a tsunami and the only victims of this pestilence will be the uncreative companies that have spent tons of money on commercials that, in the end, no one even noticed.  educON Relationship marketingThe New CompetitivenessWhat is the use of a brand?Logo |
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