A company's marketing organization can identify competitors by using environmental
scanning. Environmental scanning is a way to identify and analyse trends by continuously
acquiring information. Environmental scanning gathers information from five categories:
social, economic, technological, competitive and regulatory forces. Each of these areas
provides insights on potential trends and can provide an early warning of a new competitor.
Having information on things such as consumer income, demographics, and changing
technology would allow a company to respond accordingly to a competitor by ensuring their
resulting product is wanted and needed by consumers, and consumers have the ability to
purchase it. One example of a company responding to competitors is Coca-Cola. Coca-Cola
is the major competitor of Pepsi and they have a long rivalry competing in the soft drink
industry. In order for Coca-Cola to stand out from Pepsi and convince consumers to buy
Coca-Cola products over Pepsi, Coca-Cola introduced new products such as Vanilla Coke
and Coke Zero. Coca-Cola was able to gather information on consumers and demographics
and create a product that would satisfy and need and want of consumers that Pepsi did not
have. A company's marketing organization can ensure that it is able to identify newly
emerging competitors by ensuring they are exercising environmental scanning. If a company
has a grasp on what is happening around their organization as well as with their product or
service, in regards to sales, environmental scanning will aid them in identifying competitors
as well as time to plan and execute an effective marketing strategy. They will also be able to
pinpoint any environmental trends that may be happening. I remember growing up in a
neighbourhood that had maybe 2 hand carwashes within a 3-mile radius. These were the do-
it-yourself car washes. They were always crowded so a lot of people resulted to washing
their cars in their driveways. Home car washes became another Saturday household chore. In
my early 20's the neighbourhood gained a drive-thru car wash, the car wash stayed busy and
employed a lot of teenagers. The manual car washes were still operational, but they were
now a choice and not to only option. The family that opened the drive-thru car wash lived in
the 3-mile radius that I spoke about before, I did not know this as a kid or young adult but I
would say that this family did a form of environmental scanning and saw a want of the
community.
A company's marketing organization can ensure that it is able to identify newly emerging
competitors in time to plan and execute and effective marketing strategy by consistently and
continually scanning the market environments and researching completing research in its
target markets. Once they are aware of the needs of the customers and identify other
organizations that are focused on meeting those needs and how they are able to adjust and
offer better. Offering unmatched value for the customers will draw them to the company and
marketing to those things that the customers value will beat out the competition in most
cases. In this technological age, using social media to research, connect, and communicate is
vital in the marketing strategy. Additionally, concentration on the marketing mix four P's;
product, price, place, and promotion will also be a key component. An example is the
different travel assistance agency's that are available needing to stay up on the marketing
they are producing in comparison to others. I often will use Expedia to convenience of being
able to book hotel, rental, and airfare if needed as well as the value offered in comparison to
some others. The ability to accumulate points is an added value. However, there are many
other companies that have jointed this realm of business that would be considered Expedia's
competitors. "A company scanning its environment must consider the possible barriers to
entry for other firms, which are business practices or conditions that make it difficult for
new firms to enter the market. Barriers to entry can be in the form of capital requirements,
advertising expenditures, product identity, distribution access, or the cost of customers of
switching suppliers." (Kerin & Hartley, 2021)
Provide an example.
I was a former outside sales rep for one of the largest business supply companies in the
country. Our company mainly sold commodities such as paper, ink, coffee, toner, office
supplies, janitorial supplies etc. We provided either same or next day delivery with no
minimum order amounts. The question in this assignment asked about "identifying newly
emerging competitors in time to plan and execute an effective marketing strategy." With
respect to my former industry the barrier that was most prevalent was "the cost of customers
of switching suppliers." Because my company had sold so many different categories of sale
the goal of the sales rep was to establish as many hooks in the account as possible and by
that, I mean categories of sale. This type of sale was a repeat sale. We didn't sell what a
customer wanted. We sold what a customer needed. "Cost" doesn't just mean the amount of
money for the tangible item. "Cost" also means the cost of having the employee ordering the
products and having to spend work time shopping around. "Cost" also means the actual
inconvenience of having to overhaul an ordering procedure that would take time to do. To
exploit this barrier to entry the sales rep would customize an online favorite list that had all
the customers items on it. We would then make proprietary item #'s to protect the sku from
being shopped around. Then we would identify the most frequently ordered item's and
customize a price that was always 5-10% below market price. The idea is that we were ok
with losing money on the front end because we know that when people shop online that
often that add items, they didn't plan to buy prior to logging in. Most of the time those items
were just ordered without needing to give special pricing, thus we would make up the lost
margin on the front end, with the profit on the back end. We did this while giving the
perception to customer that we were saving money because the customer is usually only
sensitive to the items, they know they order most frequently. But creating a customized list
we simplify the process for the customer making it annoying to leave us. Because the
company gave us the tools to adjust pricing, we always had that tool in our toolbox. All of
this, in combination with good service, is how the rep was able to not worry about a
competitor, and if a concern became prevalent, we already had the recipe to mitigate to
salvage the account :-). Every business is different but for us the barrier to entry in which I
described was easily the most important for us.
Reference:
Kerin, R. A., Hartley, W. S. (2021) Marketing. Mc-Graw Hill
