Small business marketing - taking on large competitors in your marketing

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Marketing >> Marketing Principles >> Small Business Marketing

 

Marketing for small business - taking on big competitors

Marketing for small business can be a bit tricky when you decide to take on large competitors.  Small businesses cannot afford as many mistakes, so marketing has to be done

 In 1998, there was no Google.  But today, they dominate search and have wiped out all but a few competitors.  Going up against the big boys can be done and often they have the biggest weaknesses, but only if you understand your competitors and HOW to do it. 

Regardless of the product/service, the big guys have several things going for them:

1)  Time online to know what works and what doesn't

2)  They have a clientele that has experience with them, but not with you.

3)  They already HAVE customers - you have to GET customers. 

4)  A bigger marketing budget

5)  Name recognition - brand

6)  They can wait you out and play the price game if you start it.  If the only value to your product is lower price, you have to be substantially enough below their prices to get the business.  A 5% price difference probably isn't enough.  But can you afford to be 25% lower?  Entering a price war to go into business almost always backfires unless you know your competition is completely bloated.  If they are, then you have to pound them fast and hard before they have a chance to react.

They also have several weaknesses:

1)  They are big and well-established which also means that they are often slower to react.  They are comfortable in their success while you are eager. 

2)  You can take customers away from them.  They cannot take them away from you.  In the beginning, your only direction is up.  Their only potential is down.

3)  You can build the underdog image.

4)  You know they exist.  They might not know you exist until you are climbing up their backside.

5)  Because of their established position, you have the unique advantage of being able to learn from their mistakes.  They are blazing the trail which means that you can merely look at what they are doing right/wrong, and improve on what they have.

6)  They've been in business long enough to have alienated some clients so a certain percent of their customers might turn over easier if you can give them a reason to switch.

7)  Chances are their overhead costs are higher than yours.  This means they have to have a certain volume of business at a certain profit in order to stay in business.  If business gets tight, expensive overhead that was encumbered during good time can be enough to sink a company.

To go up against these big guys, you must have an action plan.  Just going into business and hoping and advertising is not enough.  They can outspend you.  You must:

1)  Differentiate yourself - If you offer the same things, at the same prices, with the same customer service that the big guys have, then there is no incentive for the customer to switch to you.  Yet competing on price is a lousy game plan.  You must give them a valid reason (in their eyes) to do give you a chance.

2) Start with a piece of the action that they care the least to defend.  Everyone wants the big orders, and they will fight to keep those customers.  Many companies don't care as much about the onesie/twosies or the small guy.  So at least go after those. 

3) Donít forget about the fact that their single focus isnít you.  Itís everyone.  Though you may truly end up being a big thorn for them, when you start out, they are not paying attention to you.  They donít know that you have launched your business and if they do, they may acknowledge, but they are not concerned about your presence.

Marketing >> Marketing Principles >> Small Business Marketing

 

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