The threat of competition

Posted by Tom LarsenJul 29, 2015 Marketing, Sales 0 Comment

Sometimes the thinking for a new product is truly beyond the reach of most people in their current paradigm. An automobile not a horse. An electric light not a candle. A TV not a radio. A microwave oven. A touchscreen not a keyboard. From big ideas to small ideas, these products represent either leaps or stretches of what is currently in the market place. Maybe you are working on exactly that right now.

In your case then, you are likely thinking that you have a great advantage being the only one with this new idea. In fact, you are in the most dangerous position possible. Here’s why:

When your idea is the only one, other than your opinion, where would any retail buyer go to validate they should carry your product? Because you were able to get 1000 backers at a crowdfunding campaign? Big deal. Because you have proven it in 5 stores? Maybe.

What you really need is competition. To evangelize a new idea takes a lot of time and energy. Every conversation with a buyer is not about whether your product will do what it says it can do. It’s about convincing the buyer there is a market and that her customers will buy it. If only there were two or three more versions of what you are doing, or if they had seen this in some other store, etc., it would be so much easier to say yes.

Alas, there’s not. Therefore, the largest portion of your time will be committed to convincing buyers that there is a market, not how great your product is. With a competitor, you get to split that load, since they will be educating buyers (or sales people, or distributors) just like you.

In any given market, there are generally 3 positions to take, good, better or best. Each comes with a commensurate level of quality, cost, service and therefore value proposition. When the competitor is cheaper, you are better. When you have many benefits a competitor has fewer. It all becomes comparative – and therein lies the advantage of competitors – compared to WHAT?

In retail, taking on new product is at the expense of perfectly productive space in the store already. Why then take on new product? “Compared to what” is literally, compared to waiting until later when there is more evidence your product is something my customers should or do care about.

Complicated? Not really. The retailer’s portfolio is fully invested. Your product represents an adjustment to the portfolio for an unknown return. Smart money is always resistant to risk of failure AND opportunity cost losses.

Embrace your competition. Find your distinctions. Be better in your way and make your own path. If they are bigger than you, all the better, they will spread the word faster, making you the immediate alternative. You won’t get 100% market share, but, you’ll get a suitable percentage of what is now a far larger market acceptance. But that outcome, depends on how savvy you are, not your product.

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