Marketing Intangibles

Ask someone in marketing to name their primary competitors, and they will name several other companies in their industry. Although this is true, there are other competitors which are just as tough. The toughest competitors don't have a company name or address, they are intangible.

Intangible competitors involve ways of thinking and ways of looking at the world. When company marketing resists change, that is an intangible competitor. When an entrepreneur begins thinking like a bureaucrat in a large corporation, that is an intangible competitor.

Marketing plans fail more often from intangible competitors than from industry competitors. If companies deal with the intangible competitors, they are more likely to succeed no matter what the companies in the industry do. So who are these tough competitors? To put a face on the intangible competitors, let's meet them:

Change To Business

Business is dynamic, always changing. Nothing is more certain than change. Companies change, industries change, products change, distribution channels change, and problems change. So why do so many people resist change, and rarely embrace change? With successful businessemen, welcoming change within a company is really what helps build it and keeping it adaptable with modern business practices.

Changes are a major competitive force. Companies cannot stay in the same place and compete successfully. Companies blind to change are doomed to failure. Even successful companies in the automobile, steel, textile, semiconductor, and defense industries lost their shirts because they did not embrace change. Major industrial revolutions are ongoing at any time, and many companies are war casualties, not recovering from the fight.

Change is a major part of our lives, with one thing replacing another. We throw out the old, create the new, and those who are happiest and most successful embrace the change.

What can we do to embrace change? First, always question your assumptions. Ask "What I am assuming about the market? the competition?" "Under what conditions are my assumptions no longer valid?" Second, keep your ear to ground constantly, listening for changes that are occurring. Monitor the market, live with it, work with it. Most often, changes do not show up in the statistics until the change is well along the way, so don't wait for the numbers. If you do, you'll likely find yourself already behind many of the others.

Good marketing people develop an intuitive sense of the market. They meet with buyers, consumers, dealers and listen to them; really listen. This is the only way changes can be spotted in time to adjust. What problems do they have, or have with your product or service, that we can solve?

Resistance to Change.

Many times, companies recognize change is occurring in the marketplace, but still do not adjust and react. For these companies, the tough competitor is resistance to change. Resisting change is just as bad as being oblivious to change. Either way, the company is left behind in the dust.

Resistance to change can destroy companies and industries. In the 1960s, the following U.S. industries held more than 90% of the American market: auto, steel, calculators, consumer electronics, textiles, and machine tools. These industries became resistant to change, as the foreign competitors embraced change. The result is that by 1989, the U.S. imported 28% of its cars, 17% of its steel, 41% of its calculators, 60% of its consumer electronics, 35% of its textiles, and 53% of its machine tools. (Numbers from the Martin-Blanda Group, manufacturing consultants.) The price for resistance is high.

People resist change for many reasons: they are scared or intimidated by new things, live in the past, are lazy, or get comfortable with routine and sameness. How competitive will they be against someone who with enthusiasm says "Let's experiment and try something new!" The jury does not have to go out of the room to deliberate this case.

As entrepreneur companies grow, many begin to resist change. They begin to think about high volume production of goods and services. They invest in expensive special-purpose equipment that commits them to produce in certain repetitive, predictable ways for long periods of time. In short, they worry more about mass production than serving the evolving needs in the marketplace. Does the customer care about your production problems or what you deliver to them to meet their needs?

Entrepreneurial companies face a great challenge during their growth cycle. They must keep the innovative spirit that brought them success as they move toward high-volume production. They must continue to use innovation, entrepreneurship and change as their allies, not competitors. Innovation and speed to the marketplace gain market share and profits more so than cheaper, faster production.

Customer's Comfort

Most people think consumer buying decisions are simple and rational. They are neither. When a customer considers buying a product or service, the decision making process brings out fears, doubts and psychological factors that are neither simple or rational.

Indeed, the battle for sales is largely a psychological battle, and the buying decision is based upon many intangible and perception factors such as image, quality, leadership, and customer support. To win the battle, companies must provide "comfort factors" that put a customer's mind at ease. The customer's mind can either be a competitor or used as a competitive tool. Customer comfort is the central challenge of marketing.

Selling Commodities

A company focused on low-cost production works out the kinks in the production process. As volume increases, costs drop lower and lower as they move down that learning curve. Companies that compete on a commodity mentality also end up selling based on lowest price which is deadly. Companies that sell commodity products can attract customers only by keeping prices low.

The commodity company becomes sales driven, not market driven. There is a significant difference. Market driven companies provide all the intangibles and are constantly innovative and adding to the whole product to ensure that they completely satisfy the customer's wants and comfort factors.

If a company makes a high-volume, commodity-like product, it can differentiate the products through service, innovation, customer support, or target marketing. To move away from the commodity mentality, companies must view their products and services as problem-solvers and then market the products on that basis. The trick is to see your products as more than physical entities, or your services as lists on your brochure.

You Are The Competitor

Your toughest competitor of all is you. As Pogo said, "We have met the enemy and it is us." There are many ways people end up as their own competitor. When people underestimate their own innovative ideas, just because they have not been tried before, they are competing with themselves.

On the other hand, arrogance with a strong belief they cannot fail, is also a strong competitor. When people are unwilling to change, experiment or innovate, they are competing against themselves and someone else innovating away will win.

Think creatively. With markets changing so rapidly, leaders must be able to adapt to new situations, and apply creative approaches. Most time, old approaches to new problems won't work. Leaders must pay attention and listen to the changes in the marketplace, and respond to the changes. Experiment and innovate.

Leaders who embrace change and innovation can avoid the biggest problem of them all: turning themselves into a competitor.