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A CRISIS CAN CHANGE THE GAME
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Yes, a crisis can change the game, but there are some underlying guidelines that can always be of help. We ve been in this marketing business for many years, and we have seen the good old times and the difficult new times. When people ask what has changed, our response is one word: competition. As you read in 2, everybody is after everybody else s business, and a crisis only makes things more competitive. Because of this ugly fact of life, the key to survival is to start every marketing plan with your competition in mind. It s not what you want to do; it s what your competition will let you do. In the next two sections, there are survival tips in a search for a repositioning strategy.
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Avoid a Competitor s Strength and Exploit Its Weakness
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When a competitor is known for one thing, you have to be known for something else. Quite often, a competitor s built-in weakness is the something else that you can exploit. If McDonald s strength is that of being a little kid s place, Burger King can exploit that by being a grown-up place. For years, Detroit s automobiles were perceived as not being very reliable. Toyota was able to exploit these perceptions and take ownership of the attribute of reliability.
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REpositioning
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But remember, we re talking strength and weakness in the minds of the marketplace. Marketing is a battle of perceptions. What you re really doing is exploiting perceptions. You also have to realize that at least one of your competitors is probably in a meeting right now figuring out how to nail you in one way or another. You must constantly be gathering information on what your competitors are planning. This can come from an astute sales force, from a friendly customer, or from some research. Never underestimate your competitors. In fact, you re safer if you overestimate them. AT&T, Digital Equipment Corp., Levi s, and Crest are testimony to underestimating the kind of damage that competitors can do, even to market leaders.
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Competitors Will Usually Get Better, If Pushed
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Companies that figure that they can exploit a sloppy competitor are making a big mistake. They ridicule the competitor s product or service and say that they can do things better. Then, lo and behold, their big competitor suddenly improves and that so-called advantage melts away. Number two Avis did indeed try harder, but Hertz quickly improved its efforts. Then one day Hertz ran a devastating ad with this headline: For years, Avis has
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A CRISIS CAN CHANGE THE GAME
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been telling you they are No. 2. Now we re going to tell you why. Then Hertz went on to lay out all its improvements. Avis never quite recovered. Never build your program around your competitors mistakes. They will correct those mistakes in short order.
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CHAPTER EIGHT
VALUE IS THE NAME OF THE GAME
2, we talked
about repositioning the competition as not being about price. When you are talking about value, once again it is not about price unless you have built a price advantage. If that s the case, you are always about price as your differentiator. Southwest Airlines has used low price to differentiate itself. But it has done so by, in CEO Herb Kelleher s words, being different. By using only one kind of airplane, Southwest saved on training and maintenance costs. By offering no reserved seats, it avoided expensive reservation systems. By offering no food, it eliminated expense and time. By avoiding expensive hub airports and using less expensive smaller airports, it avoided high gate charges.
VALUE IS THE NAME OF THE GAME
(Southwest has recently moved to a reversed section and bigger hubs, but they are evolving carefully.) By being different, Southwest has been able to construct a system with the lowest cost per air mile of any airline. Unfortunately, this has turned it into a bit of a cattle car. But to offset this, it works very hard at making the trip more fun. (The attendants do stand-up comedy.) Southwest has differentiated itself as the low-fare airline. And it has become big enough that it can t be forced out of a market by a bigger airline lowering its prices. Many airlines have tried to imitate Southwest, and most have failed.
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