Market competition

in LeoFinance10 months ago

The very moment you realize that life itself is all about competing with some people then you will know you just have to do well and perform outstandingly differently. This is what makes you unique in your way.

In economics, competition is a scenario where different firms are struggling to obtain limited goods of varying elements of marketing mix: price, products, promotions, and place
— Wikipedia

For a country's economy to boost and grow faster there must be true market competition. Market competition could be said to be a business environment where different firms are located and have to compete with each other based on the quality and quantity of their goods and services. An Uncompetitive market could be said to be a business environment where market owners receive special treatment and are protected from competition.

One of the benefits of a competitive market is the fact that it encourages entrepreneurial spirit which results in economic expansions over the long term. In places where market competition is suppressed, there is a tendency to experience less economic growth.

Another importance of market competition is that it brings about quality over quantity. When firms have to compete with one another for sales and market share then they might be forced to provide goods and services that are even more superior to that of their rival and strive to outdo the competitors by making something new, better, and less expensive.

One of the negative effects of market competition is that it results in some parties having to lose. The loss could be in the form of bankruptcy or even get the whole industry destroyed and the people might have to suffer financial and emotional damage from losing their jobs.

Types of market competition

As a marketer, the first thing to do before going into any form of marketing is to identify your market competitors and also understand the type of competition you are running into. Knowing all these before heading into any marketing would help you avoid pitfalls and provide you with opportunities that can make you stand tall above others.

We have different types of market competitors and you should know whom you are dealing with among them.

Direct competitors

Direct competitors are businesses that provide the same or similar services as yours and they are also targeting the same customers as yours. For example, when you run a fruit business selling varieties of fruits, the fruit seller standing next to you is your direct competition.

One of the threats that emerges from direct competition is that when a customer gets something from your competitor then there is very little or no chance that they will buy such a product from you. When a customer buys fruit from the other fruit seller's shoe there is a lower chance that such a customer will come and buy a lemon from your stand.

Indirect competitors

An indirect competitor may sell the same or similar product as yours but might not be the primary source of their income or might not even be the focus of their business. For example when you have a fruit stand and sell a variety of fruits alone, then your next stand could open a foodstuff stand there by selling some kind of fruit in addition to their foodstuff.

Replacement competitors

This is the largest threat to market competitors. Competitors at this level might offer a similar or different service as yours but fill the same niche or the same problem as yours. Most Times their competitors are always invisible and not easily noted. What they reflect on is not the product but they work on how their service is delivered.

An example of this type of competition is the Amazon company. Before the emergence of Amazon company in America, there were small that operated and quite doing fine with their markets. But when Amazon came into the show it brought a replacement over them giving everyone an equal chance to shop at their convenience and get their demands supplied to them. That's what a perfect replacement competition looks like.

How to gain a competitive advantage over your competitors.

You must make sure you examine and know the type of market competition you are into. Get to know more about their strategies like their social media, their brand and product spread, and also other key aspects of their business.

Once you get to know who you are dealing with, it will make it easier to identify your competitors and make your market stand out differently.

Realizing a competitor's product spread would pave the way for you to understand the type of product the people in the area are looking out for, and what they don't want to get. This will aid your future product and secure you from offering services they won't get to buy from you.

Knowing your competitors' loopholes. These loopholes of your competitors are what you will have to work on. It is just like realizing their shortfall and working on that. For example, a company fails to have good customer service and a poor networking system. Once you realize this is a loophole from your competitors then you can work on perfect customer service and network, this would shift the customers from your competitors down to you.

Most times it is always the best option to go into market research before trying to get into any type of market or business. Remember there are people in the field before you, and there are also people coming after you. Well-detailed market research will pave the way towards a favorable market ecosystem and also knowing what your rivals are doing to make them come out successful.

This kind of market research most times are always time-consuming but the benefits from getting it cannot be overlooked.

Know your customers

The last thing I would advise you as a marketer or a business owner is to know your customers and get to know what they want. Have them move from new to existing customers. You get to receive their feedback after each deal with them. That way they get to feel you cared about them and the goods and services rendered. You can get through with surveys and know where the company gets to improve. The only set of people that could praise and criticize your products and services genuinely are your customers.



Header image from Pixabay

Posted Using LeoFinance Alpha

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