Over the years, we accumulate experience on the products we sell and we select our offer distinguishing qualities, design, price-value, fashion, brand image, etc.
In recent years there has been an unstoppable and dramatic decline in the average price of articles. In certain sectors, this price decrease has been accompanied by an increase in product qualities and qualities, and a notable decrease in margins, especially in technological products.
To this we must add a change, no less dramatic, in the behavior of the average consumer: we have gone from an impulsive and wasteful consumer to another calculating and austere.
Therefore, a correct orientation to the client is needed to determine what range of prices it considers appropriate, what characteristics it considers indispensable, what brands it considers to be a reference, what position in its priority ranking its product occupies and many other factors that will make it more effective. mix of products and brands. For example, the impact of cultural and economic changes on the way of life of your customers and how this affects their relationship with the products you sell.
Frequently we must remember the obvious: that the boss in your business is the man who passes in front of the door, and that your tastes or mine are very good for you or me, but we live to connect with the tastes of who buys in our business.
One of the keys to connect with the customer and optimize your product offer to the maximum is what could be called the global dimension of the product, which would be the result of comparing the product in question with other products from its sector, as well as from other sectors. , especially within its same price range. This will be useful to discover the real possibilities of selling your product and identify direct and indirect competitors.
Direct competitors are those products and services that are offered to the same type of customer and to the same market, while indirect competitors, in theory, would offer the same products and services to different customers and markets. However, in the case of indirect competitors, this is not always the case, and I will explain it with an example:
Let’s say that a consumer wants to buy a gift for a person and establishes a budget of 80 euros. With that budget you can buy a perfume, a digital camera, a GPS, an mp3, some shoes, some sports shoes, a capsule coffee machine, a clock, a bag, a selection of chocolates, a ticket for the theater, etc.
The consumer will try to obtain more value for his money, so he will assign a price-value relation to each product based on his competence within the same sector, but also facing products from other sectors and always based on his own criteria. Therefore, he will buy the product whose perceived value is greater for him, even if he belongs to another sector.
That is why the great enemy of many sectors has been consumer electronics, now in retreat. Due to the scarce margins with which they work and the capacity of these products for large price reductions in a short space of time, they achieve a high perceived value for a small price, making it very difficult to compete against them from other sectors.
However, it is common for the person in charge of purchasing, the seller or the professional of the sector to make the valuation of their product based exclusively on a comparison with their more direct competence. Therefore, the choice of the price range to work or the size of the linear, are made with the vision of the sector, which does not always coincide with the customer’s vision.
This is especially pronounced when defining the range of access to a product, which may be out of the offer entry models that the customer considers valid and that the professional dismisses as too cheap or simple. This can create a sense of elitism to the client that is not always intentional and can remove it from our business.
It is also the case that, due to the impact of certain cultural and economic changes, the attraction exerted by a product can completely change the relationship between the product and the client.
An example is aspirational products, name given to those products that have a great added value for the consumer, generally considering that they are indicators of an economic status, social position, or that its use will provide a unique advantage or experience.
This rating changes with the changes mentioned above and does so differently and in a different period of time, depending on the customer’s peculiarities. For example, a gold watch could denote a certain economic status years ago for a part of the population. However, at present, this status indicator can be better represented by a state-of-the-art mobile phone.
In this case, we would not be talking about direct competitors from the point of view of the product, but of them as aspirational elements.
Therefore, being competitive in the market rarely depends on winning a battle of prices and discounts against the most direct competitors, if not adding value to the product and making your purchase and use a memorable experience.
I think we can conclude that the competition of almost any product is global, therefore your competition will also be global. So when you think about controlling your competition, it is better that you do not forget that almost everything is:
Competition is any product that your client can buy instead of yours.