Other than very niche markets, chances are that if you’re offering a product or service – you have some kind of competition somewhere. This has become even more prevalent with the rise of eCommerce, where companies run from garages can compete with your mall-based brick-and-mortar store. So, what exactly are competitors in the digital marketing industry? Is having competitors always a bad thing? Let’s find out:
What is competition?
Competition is so much more than just someone else who is trying to undermine you in some way. It’s not all bad, and in some cases competition actually becomes a catalyst for organisational growth! Competition in the digital marketing context can be defined as:
“The rivalry between companies selling similar products and services with the goal of achieving revenue, profit, and market-share growth.” – James Carnrite, MSc – information technology management.
Marketing competition motivates brands to constantly improve their offerings and customer service because there’s always someone trying to do better than you. In turn, a brand should also have another larger market player to look up to. This competition actually improves the entire market and ensures a high level of quality and service excellence. When monopolies form, complacency creeps in.
If you and your market competitors are offering the same products and services, aimed at the same target audiences, with the same goal of profit and market share growth, you have direct competitors. These are people who your customers can go to if they need one of your products – but you’re out of stock. For example, Pick n Pay and Spar. They both sell the same grocery brands, and have the same target markets. However, these brands have found ways to differentiate themselves from each other, which is critical when trying to get one up on competitors.
In contrast, indirect competitors are completely different to a brand. However, their services and products – while being different to yours – can still satisfy the specific need the customer is trying to satisfy. For example, two musical instrument stores sell drum sets. One sells acoustic (traditional) drums, while the other sells only digital drum kits. Both satisfy the needs of a drummer, but they are completely different products. Therefore, while the digital instrument store isn’t a direct competitor, it can still take business away from the acoustic musical instrument retailer.
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