Defending Your Territory

I focus a lot of time information mining to find new profitable niches to bring products to the marketplace.  One of the best places to find current information is discussion forums.   One of the reasons I find discussion forums so important is because you not only see what people want but, who is offering it to them.  On many occasions I also stumble upon someone else trying to provide a solution to the same problem that I am.

Responding to what I deem a threat, whether it is by a new or repositioned competitive product is called ‘defensive marketing’.

Every year, dozens of new products are launched in any one of my marketing niches.  While not all of these products will be deemed viable by the consumer many will be and are significant threats to my highly profitable business.

Responding to these perceived threats in a rapid and efficient manner will prevent loss of market share in that niche and ultimately protect a revenue stream.

Depending on the niche you are in and the product you are trying to defend your territory against the answer can vary greatly however, the questions you need to ask yourself remain the same:

1. Should you counter with a massive marketing campaign (pay per click, joint ventures, e-mail, etc.)
2. Should you lower your price to defend your market share or if you followed question #1 raise your price to cover your marketing costs.
3. Should you emphasize your products effectiveness at the problem it is solving or be upgraded to support a claim of an even higher level of effectiveness.
4. Should you squeeze your competitor by creating a new product and expanding your product line in the niche.

Answering and utilizing the strategy you choose from the questions above greatly depends on how unique your product is.  This is why it is so important to spend the time researching your niche before you jump into it and release a product that “you think” the consumer wants.

Just like any other area of marketing you need to look for your answer from the perspective of the consumer.   For example, you should already know the number one reason that your customers purchased your product (and not the competitions).

Possessing the answer to that gives you the advantage of knowing how your target market will more than likely respond to your various marketing strategies.  This is beyond what I am discussing here but, if you don’t know the answer to that question I highly recommend you do the due diligence and find out.

Let’s look at an example:

I currently market a product in a niche that is nearly identical to one of my competitors except that I offer mine with step-by-step video tutorials as well as a PDF document and they only offered a PDF document.   By simply asking my customers I found that they purchase my product over the competitions because the videos make my product easier to use.

I am assuming my competitor did some studying of their own and recently added video tutorials to their own product while keeping the same (lower) price point.  However, the videos they created for their product are lower in quality and actually can be confusing to the buyer as they aren’t in any particular order in relation to the training manual included with them.  But, the addition of the videos did in fact start having an effect on my own products sales.

I knew in advance that my customers chose my product because it was easier to use.  So what do you think I did to “defend my territory?”

1. I could have lowered my price closer to the competitions which in essence would make my product “easier to use” per dollar spent.
2. I could have kept my price point the same and change my marketing to emphasize the fact that my product is easier to use thereby keeping my product unique from the competition.
3. I could have created additional benefits (audios, private customer website, etc.) to include with my product to further separate it from the competition and actually allow me to raise my price point.

Which path do you think I chose?

Lowering my price point would lower my profits per sale.  Were as adding additional benefits to the product would have increased my production and delivery costs and increased the time it would have took to counter my competitions repositioned product.

I have had success using both of those defensive strategies but, in this case I also knew something else about my competition that made my choice easier to make.   To put it simply, their advertising methods and copy weren’t that good.

It made my decision easy and the results effective.  I repositioned my own product by changing my sales copy to emphasize how much easier it was to use than the competitions.  I positioned my product away from the competitions attack instead of attacking them head on and did it by just emphasizing its strengths (something it already possessed vs. the competition).

This is a definite advantage with doing business on the Internet because other than the outsourced sales copy none of the other advertising changes had a huge impact on my pocket book.  Just a few minor word tweaks to our pay-per-click campaigns and uploading the new sales copy is all it took.

Sales of the product not only increased but, were actually steadier than prior to my competitor repositioning their own product!

Defensive marketing is nothing new.  In fact it is a theory that is talked about in many college courses on business marketing.  The application of it works in both the offline and online business worlds and in our current economic environment it is vital that you figure it out.

When your competitor repositions their product and it actually grabs a foothold in the marketplace it is time to start defending your territory.  The correct answer isn’t always easy to find but, with all of the testing methods available in the online world it won’t take too long for you to identify the correct one.

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