Therefore, in a highly competitive environment. Coaching for executives and business owners from Mikhail Kazantsev
Andrey Anuchin
Interception of the client. Struggle for sales in a highly competitive environment
TO MY PARENTS, Anuchina Raisa Petrovna and Anuchin August Alekseevich, with gratitude
Introduction
I don’t know about you, dear reader, but I usually start reading a book from the middle. It seems that most readers do the same. First, I want to understand how the style of presentation suits me, evaluate the book in general, and only then consistently get acquainted with its content. And if the book is interesting, then you can always “finish” what you missed at first. The downside of this way of reading is that the first impression of the book may not match its real value to the reader.
When three blind sages were asked to describe what an ELEPHANT is, the sage who held the elephant by the trunk said that "an elephant is a snake"; the sage who held the elephant by the tail said that "the elephant is a rope," and the sage who held it by the leg said the elephant looked like a column. (With such knowledge of their product, the sages of the elephant will not sell! - Note. author).
Other readers study the book sequentially from beginning to end, page by page. A good start to a book is a good start for them. further development book topics. This group of readers appreciates the logic of presentation, and it is for this group dear readers Let's start with definitions.
The book is called "Customer Interception". What is interception? The word "interception" contains many different meanings, which are reflected in the following definitions.
Intercept.
1. Capture, grab on the way. Intercept the letter. Capture the fugitive. Catch someone's eye.
2. The same as tying. Strap on the suitcase. Catch the waist with a belt.
3. Grab differently, in a different way. It is better to intercept the ax.
4. Do something quickly, hastily, somehow. grip(unfold.) (grip, grip, grip, grip)
1. A brisk, full of youthful person.
2. The same as the dodger: daring, brave; bold, daring. With a grip, with a grip, I got it, I stole it.
Khvatovshchina.
1. Looted property.
2. Haste, vanity, business or work in a hurry, at random, in a hurry.
Grab to do.
1. Soon, smartly, lively, quickly; hastily, somehow, hastily or all at once, instantly.
The word "interception" includes such qualities as speed, haste, dexterity, quickness, luck ... And these qualities are simply necessary at the present time in order to successfully conduct your business in the market! If earlier, in order to complete a transaction, it was necessary to negotiate only with the client: to understand his needs, correctly present your offer, work out his objections, now against the backdrop of relations between the seller and the buyer, the sinister figure of the Competitor is increasingly emerging. A competitor with a capital letter. This is someone who has both lower prices and better service, and who is just waiting for the right moment or the seller's mistake to start working with the client.
And the client has also changed. Now the client is educated and competent and knows what he wants. The client has become more demanding, since having a choice of several attractive offers allows him to manipulate his counterparties, threatening to refuse cooperation to those who do not fulfill his conditions.
Thus, before starting a long and fruitful work with a client, it is necessary to neutralize a competitor (Fig. 1).
Rice. 1. General scheme of interception.
If the main business activity of the client is connected with your competitor and you want the client to work with you, you take certain actions to intercept the client from the competitor, after which the client transfers the main focus of interaction from your competitor to you.
Under the interception of the Client we will understand the active (grasping!) actions of the seller (grip-well done!), aimed at:
1) to limit the interaction between the Client and the Competitor;
2) to expand the interaction between the seller and the Client.
And what, the reader will say, isn’t it possible to live peacefully, share territories of influence, cooperate, not compete, attract new customers not by intercepting, but by, for example, developing the market or searching for new customers?! That is, instead of the game "won (I) - lost (competitor)" play the game "won - won." It turns out you can't!
And there are objective reasons for this.
1. Saturation of most Russian markets
What happened, all snatched up.
V. I. Dal
Marketers identify growth markets where marketing efforts can lead to increased sales by attracting new customers. In a growing market, it is much more efficient to put effort into finding and further working with new customers than to spend precious resources on stealing a customer from a competitor. In such markets, the rivalry between companies is based on the principle “whoever wins the fastest”. However, the growth of the market cannot last forever.
Further development of markets leads to the fact that after the stage of rapid growth, the growth rates of most markets decrease, and companies that almost do not meet competition in growing markets are increasingly involved in competition. In mature markets, despite vigorous activity to promote their products and services, companies no longer provide themselves with a significant increase in the client base and the sales dynamics that they had in a growing market.
The capacity of a saturated market is limited, so the main struggle is not for a "new", but for a "foreign" client, that is, a client who already has experience in operating in this market and experience in interacting with the company's competitors. In a saturated market, increasing customer capture activity is one of the prerequisites for the effectiveness of the company as a whole, and the ability of the company and its sellers to capture the client becomes a guarantee successful development companies.
In a saturated market, customer capture skills become key.
2. Weak effectiveness of traditional sales methods
At sales trainings, a certain “ideal”, “sterile” client is usually considered, who does not work with anyone, knows nothing about the product, and in general, as if seeing representatives of the sales clan for the first time. But this is not true! As a rule, the client already somehow satisfies his needs, he already has relationships with other suppliers, and he often understands the product and the market no worse (if not better) than the seller. Therefore, the most important skill of the seller is not even to competently perform the sale procedure, but first of all to create the possibility of this sale, freeing the client from the influence of a competitor.
Situation 1.You arrived by car to the office, there is a free space in the parking lot. You effortlessly park your car and go to work.
Situation 2.You arrived by car to the office, and this place is already occupied by another car. What to do?! You need to find a temporary place to park your car. Find the driver of the car that took your seat. Give him a good reason to vacate this position. Come back, start your car again and put it in the place that you have just been vacated. (According to V. Tarasov)
The activity of freeing a place already occupied by someone is quite troublesome, and the chances of success of this activity are far from certain. Therefore, before “turning on” the classic sales ladder, it is necessary to clear the sales space from the influence of a competitor. And if the client is already working with someone, then the key skill that allows you to make a sale is precisely the skill of “liberating” the client, that is, the ability to make sure that the client’s interaction experience with your competitor does not affect the outcome of negotiations with the client.
3. Narrow range of methods of competitive interaction
We can safely say that "our man" does not like to compete. It is possible that one of the reasons for this is the national character caused by the vast Russian expanses. The English principle “my freedom ends where the tip of your nose begins” is understandable for a Russian person by no more than theoretical level. In a situation of prolonged confrontation, "our man" includes the following action programs:
- to get out of strength, but to "fill up" a competitor ("if the enemy does not surrender, he is destroyed");
- to free the territory (the benefit of undeveloped territories was usually enough);
- act without paying attention to competitors, completely ignoring their presence.
Sometimes there are situations when these strategies will be ineffective. And when the situation forces you to endure the presence and, moreover, the active actions of a competitor for a long time, this usually causes severe stress and a desire to solve the problem by force. That is why the development of interception skills allows you to master the secrets of positional combat.
Is it easy to intercept a client? On the one hand, it is easy, as the world has become faster, more flexible, and this is true both for markets consumer goods(B2C), and for industrial goods markets (B2B).
The internal purchasing policy of many companies recommends regular switching from one supplier to another. Therefore, almost any client can be intercepted. This is a plus!
On the other hand, the activity of intercepting customers has significant disadvantages:
– client interception requires increased resource costs associated, for example, with active advertising activities;
- low profitability of new "intercepted" customers, due to the fact that attracted customers are so-called "new" customers, and new customers usually buy 1.5-2 times less than old customers,
- lack of trust, which is developed in the process of joint work and overcoming various crises, makes it necessary to spend resources on additional control procedures;
- business processes of interaction with a new partner have not yet been debugged, so they are not efficient enough.
Experts indicate that it takes three times more resources to intercept a client than to work with an old client. So the question is “Should I intercept a client or not?” and it is not only a question of the possibility of interception (“Can I intercept a client?”), but also a question of the goals that will be achieved by the company through interception (“What will I get, when will I intercept the client?").
The dog was boastful, but the wolves ate it.
folk wisdom
In the B2C market, the search for diversity has become one of the key values of the consumer. He experiences a certain struggle of motives within himself, which is expressed in the fact that he constantly has to weigh the main arguments "for" and "against" the transition from the use of one product to another. In table. 1 shows the main motives that promote or hinder switching from one product to another.
Table 1. Pros and cons of switching to a new product.
The factors from the right column in the presented table operate constantly and lead to a natural drift of buyers from one product to another and customers from one supplier to another. "Even the best companies with the best product and best service lose about 10% of their customers every year.” Therefore, within five years, the best companies should update their customer base by at least half! And since customers leave not only from you, but also from competitors, interception activities can help them make a faster decision to change their counterparty. Since the effectiveness of an activity largely depends on the algorithm by which this activity is performed, one of the author's goals was to develop an interception algorithm and present it in a memorable and compact form. This is very important both for ease of memorization and for practical use.
SPIN and ADAPT sales technologies, 4P marketing, AIDA consumer decision-making model, SMART goal setting rules... These abbreviations have long and firmly entered the business subconscious, becoming full-fledged words of the modern business language. The use of such mnemonic rules for memorization helps not only to “see” the algorithm in a compact form, but also contributes to ease of memorization and efficiency of application.
Algorithm for intercepting clients, with our light hand, will be called SIMPLE (eng. simple- simple, uncomplicated).
S– Strategy C- strategy
I– Information AND– information
M– Marketing M– marketing
P– Personal P– staff
L– Loyalty L– loyalty
E– Etics ( E- ethics)
It is symbolic that in Russian pronunciation English word, corresponding to our abbreviation, the last letter E, which corresponds to "ethics", is not readable. And so it turns out that in the Russian version of the interception technology, “ethics” is only implied ...
Let us briefly outline the main stages of interception.
S-Strategy. First, an interception strategy is developed. To do this, a strategic analysis is carried out, that is, a map of the space is built on which the interception operation will be carried out: the strength and intentions of competitors, market trends are assessed, the main customer segments are described, from which the most accessible for interception are singled out.
I-Information. The next step is to collect the maximum complete information. Information is needed about customers, their satisfaction, readiness to switch to another product, as well as information about competitors, which would allow the company to form a vision of its competitive advantages and prepare a comparative argument. Information should be collected in the current mode, at the same time, actions aimed at searching for specific information can be initiated in the company.
M - Marketing. When developing the marketing component of this system, we did not "reinvent the wheel" and decided to limit ourselves to the classic concept of 4P marketing, especially since it turned out to be quite suitable for describing the marketing tools used to intercept. Interception marketing tools include the traditional elements of the marketing mix: product, price, promotion, and distribution. In accordance with the developed interception strategy, a product is developed that is different from the product of competitors, a price is formed, appropriate distribution channels are used, and promotional activities are planned.
P - Personal. If marketing methods are insufficient, then the personal factor is involved, which includes the use of personal selling technologies to intercept, as well as the involvement of customers and competitors in the interception.
L Loyalty. As the saying goes, “Easy to catch, hard to hold”. After the interaction with the client has improved, it is necessary to take measures to retain him. To do this, a system is built to protect the client from the active actions of competitors to intercept the client.
E-Etics. The section on dealing with the ethical issues that arise in interception highlights issues that are usually rarely addressed, namely the ethical rationale for interception activities, as well as the compatibility of various aspects of it with ethics and the spirit of the law.
Thus, if all the steps of intercepting a client are performed correctly, then intercepting a client is easy. Very simple.
Perekhvat?! Keep it SIMPLE!
The next presentation will be devoted to detailed consideration the main steps required to intercept a client.
Interception strategy
The main strategic principle is to find the most favorable buyers and sell to them.
M. Porter
Much has been said and written on the subject of strategy good books. However, when at trainings I ask the question of how strategy differs from tactics, then regardless of the level of the audience (students, managers, top managers ...) they answer something like this: strategy differs from tactics in that the strategy is designed for a long time, and tactical decisions are implemented within small time intervals. To the question: “What are the strategic goals of your company?” a certain Japanese leader replied: "In 250 years, we want to become a leading company in our industry." Does this mean that plans with a shorter time horizon are tactical?
Another answer to the question about the differences between strategy and tactics is related to such a criterion as the “size” of the decision being made. Within the framework of the strategy, global decisions are made, while tactical decisions are much smaller-scale decisions. However, this indicator is also not critical, as it depends, for example, on the size of the company.
In our opinion, the key factor that distinguishes strategic decisions from tactical, is the need to take into account the variability of the external environment during the validity of the decision. If the stability of the external environment is high enough and the achievement of the set goals does not depend on changes in the external environment, then such decisions, regardless of the scale and time scale, should be called tactical. Decisions that are made for a period during which significant changes in the external environment are possible are strategic.
You can be 100% sure that tactical decisions will be carried out, while strategic decisions should be of a probabilistic (or scenario) nature. It is the variability of the external environment that is the factor that leads to the fact that strategic decisions are implemented much less frequently and less successfully than tactical ones.
If we use military terminology, then the success of the implementation of strategic plans depends largely on how military leaders (top managers) can see the whole picture of the battle (the market as a whole), that is, they know who their opponents and allies are, where they are and what are the features the area where the battle will take place.
During the war, in the safes of army commanders, there were envelopes developed by the General Staff, which indicated what actions the army commander should take in the event of certain actions of the enemy. "If the enemy attacks from the left flank, then open envelope number three and act in accordance with the instructions given there." Thus, the effect of surprise was neutralized - for every action of the enemy, opposition was already ready, in addition, the actions of the armies were coordinated.
The strategy is a working document that is constantly modified depending on the changing market conditions. Companies "grow" to the strategy when they realize that by intensifying efforts or extensive expansion it is impossible to solve the problems that the company faces. A strategic approach is possible only in mature markets, when the main players are already known and when the distribution of roles between them is obvious to the players.
Strategic decisions should be based on an assessment of the position of the company in relation to the forces that make up the factors of the external environment, which takes into account the following aspects:
– determination of the boundaries of the company's activities and the scope of its interests;
- organization of the company's activities in accordance with the external factors environments, which include current and potential competitors and customers of the company;
– assessment of strengths and weaknesses companies in this competitive environment, the formation and development of competitive advantages;
- taking into account market trends, the risk of the emergence of substitute products or the emergence of new competitors on the market.
The main stages of developing an interception strategy include the sequential execution of the following steps:
1) strategic competitive analysis;
2) setting targets for interception;
Strategic competitive analysis
The purpose of strategic competitive analysis is to obtain the most complete and accurate vision of the positions of the main operating operators in this industry, the basic directions of their development, as well as the development trends of the industry as a whole (Fig. 2).
Rice. 2. Industry competition.
Strategic competitive analysis includes analysis of competitive forces, analysis of industry structure, and analysis of critical success factors in an industry. As part of a competitive analysis, it is necessary to assess the existing competitive positions in the industry and answer the following questions:
Who are the company's competitors and what are their competitive positions?
What competitive strategies are the competitors pursuing?
What are the critical success factors in the industry?
– what types of clients exist and how can they be segmented in relation to interception?
Industry Analysis
Analysis of the structure of the market (industry). In order to plan offensive actions to capture the market and intercept customers, it is very important to have information about overall structure industry, growth rates and level of instability, market shares occupied by the main competitors, etc. The assessment of the industry structure and the strategic disposition of competing parties is carried out using the following analytical tools.
Threshold market share. Russian legislation establishes the simplest quantitative criterion for classifying an enterprise as a monopoly enterprise or one that occupies a dominant position in the market - exceeding the threshold share in this trade market. It is currently set at 35%. Enterprises exceeding this share are included in the State Register of Monopoly Enterprises.
Concentration index. The concentration index characterizes the share of several largest firms in the total market volume as a percentage. As a rule, index values for three or four large market firms are used. The concentration index is measured in fractions or percentages. The higher the value of this indicator, the stronger the market power of the largest firms, the greater the degree of concentration in the market, the stronger the monopolization of the market and the weaker competition. At the same time, the following criteria for comparing market structures are distinguished: the market is considered non-concentrated when the index values for three firms are below 45%; moderately concentrated - with a concentration index value in the range of 45-70%, and highly concentrated - with a concentration index value of more than 70%.
The concentration index indicator has limitations in application, since it does not take into account the peculiarities of the market structure on the "outskirts" of the industry. Imagine two industries with the same index - 80. But in one, the core is represented by four firms that control 20% of the market each, and in the other, the core is represented by four firms that control 55%, 20%, 4%, 1% of the market, respectively, that is, there is clear dominance of the leading firm. Interestingly, the researchers found an empirical ratio of the market shares of the leading companies in the market. It turned out that the market shares of the industry leaders correlate with each other in a ratio of 4: 2: 1 (Table 2).
Table 2. Ratio of market shares of Russian leaders.
Herfindahl-Hirschman index. The Herfindahl-Hirschman index is calculated as the sum of the squared market shares (in %) of all market entities in the total volume. The maximum value that the index can take corresponds to a situation where the market is completely monopolized by one firm. In this case, the index is equal to 1002 = 10,000. If the number of firms in a given market is greater than one, then the index can take on different values. If it is less than 1000, the market is assessed as not concentrated and the merger, as a rule, is freely allowed. If more than 1000, but less than 1800 - the market is considered as moderately concentrated, however, the level of the index above 1400 may require additional verification of the feasibility of the merger.
If the index exceeds 1800, the market is considered highly monopolized. Mergers in this range (1800–10,000) are subject to two rules. If the merger increases the index by no more than 50 points, the merger is usually allowed. If it increases by more than 100 points, the merge is prohibited. The growth of the index by 51-99 points becomes, as a rule, the basis for testing the feasibility of a merger. For a sufficient calculation of the index, it is necessary to know the market shares of all manufacturers of a given product, which is not always possible with a large number of them.
If in the developed markets of Western countries there is rich statistics on the structure of various markets, then in our country formal tools for assessing the structure of the market are used less actively. As an example Russian index, allowing to assess the intensity of competition, you can use the index developed by the marketing agency "ScanMarket".
Index MA "ScanMarket". The MA ScanMarket Index evaluates not only the representation of a given brand or a given product, but also the intensity of competition by analyzing the presence of competing brands on sale. The index is calculated using the following formula:
Where Ism– index MA "ScanMarket"®; Si– market share i– th brand/manufacturer by representation in retail; n– total number of brands/manufacturers; ism= 0 - no competition (monopoly); ism= 1 - maximum intensity of competition.
For example, the MA ScanMarket index calculated for the Moscow milk market is 0.9, which once again confirms the presence of high competition in the market. However, the MA ScanMarket index varies significantly depending on the considered product parameters. So, for pasteurized milk, the ScanMarket index is 0.65, while for sterilized milk it is 0.9. The MA ScanMarket Index can be used to search for a market niche with less intense competition.
Critical success factors (CSF) in the industry
Critical success factors are those few things that must be in perfect order for an organization to succeed and thrive.
D. Peoples
Critical success factors (CSFs) are factors common to all enterprises in the industry, the use of which ensures an improvement in the competitive position. Each industry has its own set of factors that are primarily taken into account by customers when comparing various offers with each other. Typically, an industry is characterized by three or four defining factors.
There is the following classification of KFU:
– dependent on technology;
- relating to production;
- related to the sale of products;
- relating to marketing;
- related to professional skills;
- associated with organizational capabilities.
In table. 3 shows examples of KFU for various industries.
Table 3 Examples of CFU for various products and industries.
1 Akimov T.V. Success factors in competition in the dental services market. http://www.stomplus.ru/pages/42007/factor_uspeha.html
Critical success factors may change over time. For example, in the case of high fuel prices, low fuel consumption may be CFC, but in the case of low prices for fuel, the importance of this CFU may decrease. CSFs also change within the same industry: for example, those CSFs that are important for a supermarket are not so for grocery store"at home" format.
Compliance of the company with KFU in its industry largely determines the market growth and competitiveness of the company. Identification of KFU is one of the main tasks in the process of competitive strategic analysis. If a company has competitive advantages corresponding to the CSF in the industry, then it can count on successful customer capture activities.
Analysis of competition in the industry
There are several approaches that classify the main types of competition in the industry. F. Kotler identifies four areas of competition: brand competition, industry competition, formal competition and general competition. Yu. Rubin points out that there is product, inter-product, industry and inter-industry competition. M. Porter proposed the "five forces of competition" model for assessing competition in the industry.
With regard to the development of an interception strategy, we slightly modify the model of M. Porter by introducing the concept of "interception vector".
"Interception vector" is the direction of actions to intercept the Client.
The first vector: interception by new market participants who turn to consumers with a traditional (or modified) offer.
Page 1
Fierce competition on a global scale, saturation of most markets, instability of economic and political systems demanded other types of reaction of enterprises to these changes and other organizational structures. First of all, these are new forms of enterprise integration - strategic partnerships that fundamentally change the model of the organization, its features and properties.
Tough competition in the product and labor market generates the interest of firms in the required number of employees of appropriate qualifications, motivated for productive work, high quality products (services) and low costs, prone to normal vertical and horizontal relationships.
Fierce competition among manufacturers encourages improved technology efficiency and return on investment through complex processing using versatile equipment and computerized controls and regulation.
The fierce competition among money managers and the scrutiny of their performance has probably made today's professional money managers somewhat more skilled than they were 30 years ago.
Fierce competition and narrowing of the sales market for products manufactured at OAO ZEiM makes the administration look for sources of cost savings, sources of reducing the costs of semi-fixed costs. One of the methods for partially solving these problems is the creation of the Central Federal District.
Fierce competition forces manufacturers to create both universal and highly specialized tires. Therefore, next to the all-season you can see, for example, special autumn ones, designed for driving on wet roads. There are many winter tires different type- from relatively smooth, versatile use, to the roughest, studded, which are very suitable for our winter roads. Nowadays, buying the most suitable footwear for your car is not an easy task, requiring careful study of the product supply market.
Fierce competition with other companies in the development of analogues of OLE (perhaps more powerful) allows us to hope that the appearance of the announced distributed OLE is not far off.
Fierce competition in the ferrous metal market and excess supply over demand will lead to lower world prices.
Today's tough competition has pushed and pushes the capitalist producers to further upgrade the production apparatus and products. Thus, Japanese firms proceed from the fact that equipment becomes morally obsolete in 5 years. The average duration of the production life of products of new industries in the United States is usually 3 - 4 years. And it is no coincidence that trade in science-intensive products occurs mainly between developed capitalist countries. At the same time, these same countries are also the world's largest importers of such products, absorbing more than 50% of their world imports.
Increasingly fierce competition is forcing universities to pay special attention to pre-university work with future students.
Although the fierce competition of ethylene significantly reduces the need for acetylene, however, acetylene cannot be completely replaced, since syntheses based on acetylene are characterized by more high coefficient conversion of feedstock, and acetylene flowsheets are much shorter than ethylene ones. Apparently, in the future, for the production of a number of organic products (for example, chloroprene, butyndiol, propargyl alcohol, and others), acetylene will retain its significance as the only or most economical source.
The subject of the most intense competition in our field of activity is the price and quality of services.
In the conditions of fierce competition, the requirements for the efficiency of the use of products are increasing significantly by improving the quality and economy. Products must be competitive, have the necessary consumer properties, and be certified to enter the foreign market.
In the conditions of fierce competition, the desire of trading and intermediary enterprises to survive, to achieve business success separately from the rest, the ambitious desire to independently stand out against the general background often turns into a deterioration in the results of their activities: distribution costs and stocks grow, trade becomes unprofitable. A significant number of enterprises that cannot compete are forced to stop or reorient their activities.
In the face of fierce competition in international trade in closed auctions, a secret collusion is possible, in which its participants exchange information about proposals for participation in the auction. At the same time, they determine in advance which of them will offer the most favorable conditions, which should make him a winner.
Today, sales in many markets are highly competitive. You have to fight for each client, and the strongest wins here. How can you interest a client and make him become a regular customer? Often, a client is literally “attacked” by several sellers at once with similar offers. In such a situation, the buyer does not evaluate the “product” itself, but first of all, compares the conditions and impressions of communication with the manager. The main focus of the training is on developing technologies to motivate and encourage a client to buy. Using proven methods of fighting for a client will allow your salespeople to increase sales success in a highly competitive environment.
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Objectives and results of the training |
As a result of the training, participants:
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Training audience |
This training is designed for sales professionals with different experience who work in a highly competitive environment. |
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The main topics of the training |
Sales technology in a highly competitive environment
Communicating with a client on the phone during the sales process
Establishing and developing contacts with the client in person
Identification of customer needs and selection criteria
Presentation, presentation of the product. Buyer Persuasion
Work with objections
Completion of the sale
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Working methods |
Active learning based on the practical development of skills and abilities business communication; role-playing and situational games; group and individual exercises; brief theoretical and methodological materials; interactive mini-lectures. |
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Trainer |
The training is conducted by a staff certified trainer of the Human Factors Goup company, who has 12 years of experience in solving problems in the field of increasing the efficiency of the sales staff. |
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Time spending |
10.00 to 18.00 (two days) |
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The terms of participation |
The cost of participation of one employee is 6000 rubles. Payment is due no later than 3 days before the start of the training. There is a system of discounts depending on the number of participants. All participants are provided with workbooks that can be used in the process. At the end of the training, participants receive certificates of completion of the course. |
The restructuring of the economy, taking place at the turn of the millennium, touched everyone. Large companies are fragmenting, many people are beginning to seriously think about creating their own business, small or even home-based, in order to gain financial freedom and independence from the corporate world. In the US, for example, a new one opens about every 11 seconds.
Naturally, most small companies cannot survive in a highly competitive environment and go down the drain almost immediately, but you have a good chance of avoiding such a fate by drawing appropriate conclusions from the experience of others and learning from the mistakes of others.
In this report, I want to present you the so-called "nine steps to success", developed by me on the basis of summarizing a large amount of marketing information using my own practical experience, many achievements and failures.
Speed up.
You may know a lot about your own products and services, but know almost nothing about how to properly organize own business and manage it. Therefore, speed up as much as possible in studying the relevant information, do not neglect anything that comes your way and, if necessary, use the services of consulting companies.
You simply can't be a qualified specialist in almost all areas of activity, so you should draw advice from all kinds of sources.
Consult anyone and everyone: your lawyer, banker, accountant, designer, marketer, friends, loved ones, family members, and even competitors.
Implement planning.
The main reason for the fall of the vast majority of business projects is the lack or even lack of planning. The failure of the plan means a great plan of failure for your business. Therefore, develop a good strategic plan for your own business, which would clearly define your goals and objectives, reflect the current situation, business development strategy, and planned activities in the area of the next three to five years.
Protect yourself.
Before you start any activity in the area of your business, make sure that all your activities are properly documented from a legal point of view and take care of insurance.
Choose the legal form of your organization entrepreneurial activity(check with your lawyer about this) and join some kind of insurance program (consult an independent insurance specialist for this purpose).
Use hired labor as little as possible.
Avoid hiring employees to carry out work in the field of your business until it is possible. Legal, accounting and organizational registration of hired employees in your company (even one employee!) can be quite a laborious process and take a lot of time and effort. The best option for seeking help when you are unable to cope with the volume of work yourself is to involve external specialists.
Use modern technology.
Working without a computer on documentation and other things of a similar nature will very soon reduce all your efforts and efforts to zero. You need a computer as much as it can be useful. Do not complex if you do not have the required computer skills, but immediately learn everything you need to work with it! The main thing here is to start, and the rest will be much easier. You will need a computer at least to work with e-mail and to search the Web for the information you and your business need.
Be persistent.
In the destiny of your business there will be not only good times, but also bad ones. Be persistent in carrying out your activities and take each loss as a good lesson from which you can draw a large number of necessary and useful conclusions to prevent future mistakes and consolidate future success.
Visualize success.
Keep your own goals in mind and make every effort to achieve them, imagine that little by little you are getting closer to them. Do not lose the image of your goals, but strive for its visualization and materialization.
Work on a good idea.
Remember that even a great idea will die if you don't do anything to make it happen.
You will learn what competition is, what types of economic rivalry are, the levels and conditions of competition, how to compete effectively in business
We welcome regular readers of the HeatherBober online magazine! With you are the permanent authors of the resource Alexander and Vitaly. In this episode, we will talk about one of the key concepts in business it's about competition.
Without healthy and reasonable competition, economic development is impossible, and competitiveness is an indicator of the success of a company, product or commercial service.
So, let's begin!
1. What is competition - definition, history of occurrence, levels and conditions of competition
Competition is understood as rivalry between persons interested in achieving a certain goal. If speak about market economy, then the definition of this concept will sound as follows:
Competition- this is competition in the market with other players (companies), aimed at obtaining commercial benefits by obtaining more sales at higher prices.
Modern competition is a very important element of the market. Thanks to it, manufacturers and service providers are trying to stand out from other firms in order to expand their existing customer base.
The main conditions of competition are as follows:
- economic isolation of the manufacturer;
- dependence of producers of goods on market conditions;
- confrontation with other market participants;
- the presence of a large number of equal subjects.
When selling existing products, sellers strive to sell it on the most favorable terms - as expensive as possible. However, in order to stimulate consumer demand, they are forced to lower prices so as not to completely lose customers.
This point is a plus for buyers, because in this case they will not overpay unreasonably.
The whole essence of competition is determined by several functions:
- Regulatory. In conditions of rivalry, goods with the greatest demand are determined. This is necessary to increase the scale of production of demanded products.
- Motivating. It is competition that motivates the manufacturer to act actively in the most severe conditions - to vary the levels of price indicators, increase the scale of production, and look for new cooperation. This is the only way to increase the competitiveness of the company.
- Distribution. The distribution of income of enterprises is carried out taking into account the contribution to economic activity.
- Control. Competition controls bargaining power and gives a potential buyer the opportunity to buy a product or refuse to purchase it in favor of cooperation with another manufacturer. If a sufficiently high level of competition is created in the market, then prices will be as objective as possible.
What it looks like in practice
Businessman Petya sold oranges at an unreasonably high price, so he had a minimum number of sales every day. This was due to the fact that his direct competitors were selling oranges ten rubles cheaper.
In order to somehow increase sales, Petya decided to lower the initial price and compete with his opponents. After such a move, sales of oranges doubled.
2. Importance of competition in the modern economy
Competition in a market economy is very important. In the competitive struggle, leaders, applicants, followers and newcomers are distinguished.
From an economic point of view, competition in business guarantees the creation of more comfortable conditions for the buyer side. The intensity of competition for a particular group of products is determined by the number of competitors and the strategies chosen.
Of the positive aspects of competition that affect the economy, we can distinguish:
- Activation of the development of STP (scientific and technological progress).
- Stimulating the response of producers of goods to changes in consumer demand.
- Size Averaging wages and profit rates.
- Satisfaction of consumer demand.
Economic competition forces manufacturers to use innovative technologies in the production of products. This approach is a guarantee of improving the final quality of the product.
Responding to changes in consumer demand ensures cheaper production costs and guarantees a stop in the growth of price indicators.
However, despite all the positive aspects, competition in the economy can also have a negative impact, such as:
- the option of creating business instability is possible;
- creating conditions for inflation and unemployment;
- there is a possibility of illegal actions of competing companies;
- industrial espionage;
- struggle for qualified specialists;
- underutilization of production capacities during recessions.
Example
An employee of the company "K", on behalf of the management, got a job in the staff of a competing company. During the two months that he worked in the new company, the employee studied all the mechanisms of work.
After being fired of his own free will, the industrial spy returned to his former place of work and described to his supervisors the features of the functioning of competitive production. As a result of such a raid, the company "K" managed to increase the volume of production and, accordingly, profits.
IN this moment companies struggle with such phenomena by concluding a trade secret agreement with their employees.
3. Types of competition - perfect, imperfect, monopolistic, pure and other types of competition
Classification of competition is carried out according to various signs. Here, the scale of development of such a phenomenon is taken into account, the fulfillment of the conditions for the competitive equilibrium of the market is taken into account, and the ratio of demand to supply is analyzed.
The types of competition are described in more detail in the table below:
| № | Classification sign | Types of competition |
| 1 | By scale of development |
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| 2 | According to the nature of development |
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| 3 | Depending on the fulfillment of the conditions of competitive equilibrium of the market |
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| 4 | Depending on the ratio of supply and demand |
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| 5 | Depending on the ratio of the number of business entities |
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| 6 | Depending on the needs, the basis of the product |
|
Despite such a large number of variations of this phenomenon, competition can be realized in two ways. various forms- intra-industry and inter-industry. The latter arises between different enterprises and is expressed in the redistribution of the capital of industries.
The market of imperfect competition implies pure monopoly, as well as oligopoly and monopolistic competition.
Among the main features of an absolute monopoly, the following features should be noted:
- the uniqueness of the goods sold;
- one seller;
- price control by the monopolist;
- market power of one company.
Competition and monopoly are opposite concepts. However, under certain circumstances, there may be a possibility of the emergence of so-called monopolistic competition. Here, manufacturers can offer similar sales models that are not identical.
What it looks like in practice
Each firm, which is a monopolist in a certain direction, has monopoly power over its own product - it can change price indicators, regardless of the actions of competitors.
We conducted a survey among 12 businessmen we know and found out how they identify their competitors and what they do to beat them.
The competition of goods has a very positive effect on the quality of products.
In order to stand out from the general flow of manufacturers and increase the existing customer base, modern companies must be able to exist in the conditions of created competition.
You can increase the level of competition in various ways.
Council number 1. Study consumer demand in the long term
The dynamics of long-term demand is a fundamental factor in making decisions regarding investment in order to increase production capacity.
An increase in this indicator may indicate the feasibility of searching for new distribution channels and updating the product line. The decline in consumer demand in the long term indicates the need to revise the chosen development strategy of the company.
Council number 2. Apply technological innovation
Outdated production technologies negatively affect the volume of production and the quality of goods. To increase competitiveness, it is necessary to resort to the implementation of technological innovations that are aimed at the production of goods High Quality while minimizing costs.
The innovative factor allows minimizing costs at the macro level and contributes to the optimization of the production process.
Council number 3. Use marketing and pricing technologies wisely
Marketing innovation refers to the sale of existing products using new methods of marketing. We have already told, in a separate article.
A detailed analysis of the most effective marketing technologies entails an increase in consumer interest and provides a reduction in costs per unit of product. Particular attention should also be paid to the study of the pricing process.
Council number 4. Upgrade the skills of your employees
At the heart of maintaining the competitiveness of any company is the professional development of full-time employees of the company. Staff training can be massive or carried out individually.
In the latter case, we can talk about achieving the desired effect in the shortest possible time. Increasing the qualifications of employees in the future has a very positive effect on the quality of the company's services. Thanks to this procedure, employees will be able to solve the tasks of any level of complexity.
Council number 5. Analyze competitors, study their strengths and weaknesses
Experience competitive companies can be used when choosing a development strategy for your own enterprise. After a thorough analysis, maximum attention should be paid to studying their sides. This effective tool is called benchmarking.
A systematic and detailed study of the experience of competitors and representatives of related industries will help to avoid possible mistakes that were made by other market participants. Effective techniques that give the desired result can also be used to your advantage.
Council number 6. Increase productivity and quality
It should be noted here that an independent increase in production volumes cannot bring the desired result. To achieve a positive end result when using this method, it is necessary to take into account the costs of the enterprise and the level of the final profit.
When organizing the production process and planning the volumes of manufactured products, it is very important to ensure the break-even of production activities.
With an increase in the volume of production of goods, one should not forget about quality standards. Providing services or products of high quality will be the key to entering the foreign market and raise the company's image among buyers.
Entering a new level of sales allows you to generate an additional amount of demand. Thus, it is much easier for companies to influence the consumer and encourage him to purchase the product.
Expansion of the existing sales market for manufactured products can be achieved in various ways.:
- Attracting new customers. This method involves notifying about a product or service to a category of potential buyers who have not yet heard about the company's assortment. It is also possible to attract new customers by expanding the geography of enterprises.
- Finding new ways to use the company's products. Even one new version the use of manufactured products can increase sales. Regularly looking for ways to use a product can increase profits.
- Intensification of the use of manufactured products. The main task of the manufacturer when using this strategy is to convince the buyer of a more intensive use of the products.
For example
The corn flakes manufacturer has convinced its customers that they will enjoy eating a whole pack of flakes, not half. Thanks to this move, the level of sales has increased significantly.
5. How to deal with competitors and who can help in this?
The development of competition pushes manufacturers to improve the quality of their own products. Only in this way can companies expect to expand their customer base and increase profits.
However, in order not to get lost against the background of direct competitors, it is necessary to be ahead of them in everything. Below are the most common ways to deal with other manufacturers or service providers. 
Tips and ways to deal with competitors:
- Chat with competitors. For direct communication with representatives of competitive firms, the help of relatives or close friends may be needed. The latter can play the role of potential buyers. It will not be possible to fully disclose all the plans of competitors, but you will have a general idea of \u200b\u200btheir actions in the near future.
- Interview clients of competitive companies. Sending questionnaires or surveys to people in the immediate vicinity of the store can indicate the actions of competitors, which customers evaluate positively.
- Study the specialized press. Notes in newspapers about the achievements of competing companies allow you to follow the development and success of other firms.
- Attend industry shows. As part of such events, all companies openly present new developments, demonstrate product line updates, and share other useful information with visitors.
- Analyze competitor ads. If competitors' advertising works, then you can project such techniques on your business. Particular attention should be paid to those advertising mechanisms that ensure the expansion of the client base. In particular, it applies to such a tool.
- Check competitor websites daily. Every day you need to visit competitive sites and follow literally everything that is new - updating the news block, implementing promotional offers, updating the product line.
- Try competitors' products. The opportunity to try competitive products must be taken from personal experience. Only in this way it will be possible to understand why customers prefer this particular company, and not yours.
- Collect printing products and competitors' discs. All technical manuals, advertising leaflets, catalogs and even price lists can be useful in achieving the final goal.
These steps will help you see complete picture competitive activity and then take counter-measures related to improving their business.
If independent study competitors is a problematic task for you, then it is possible to use the services of specialized companies that are engaged in commercial, marketing and economic intelligence.
One of these firms is the community of detectives "Tornado", which collects information and explores the environment of competitive organizations. Such business intelligence provides input for further strategic planning and is its basis.
6. Conclusion
Dear readers, let's sum up!
In this article, we introduced you to the basic concepts of competition and analyzed different kinds this phenomenon.
Competition is the basis of the mechanism of commodity production and the market economy. The rivalry of goods and enterprises provides an opportunity for a potential buyer or consumer of services to make a choice in favor of the most acceptable conditions purchases and other types of cooperation.
We wish you success!
If you want to know something else on this topic, you can leave your questions in the comments and do not forget to rate the article!
