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Communication and Competition

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Communication
Few doubt that the secret of success in any relationship is communication. This is especially true in a marketing relationship, where:
• The attitude of both parties is frequently skeptical.
• The nature of the contact is hardly intimate.
• The message delivery system tends to be impersonal and imprecise.
It is because of these factors that communication plays such an important role in a marketing organization.
Marketers know that consumers are constantly picking up cues put out by the organization, or about the organization, that they use to form attitudes and beliefs about the organization.
Many of these message-laden cues are controlled by the organization, including factors such as product design, product quality, price, packaging, outlet selection, advertising, and the availability of coupons.
In this case, marketers follow basic communication principles that are discussed throughout this course. Most notably, there is a constant attempt to make sure that all of these elements deliver a consistent message, and that this message is understood and interpreted in the same way by the various consumers.
On the other hand, there are many message-laden cues that are not under the control of the marketer, yet may be more powerful in the minds of consumers, and that must be anticipated and dealt with by the marketers.
For example, a recent report that United Airlines had the worst customer satisfaction scores created a downturn in both United's stock and customer reservations.
Although there are many sources delivering such information, the three most prominent are employees, competitors, and the media.
Employees, from the president on down, are all considered representatives of the organization for which they work.
Consumers often assume that the behavior, language, or dress of an employee is an accurate reflection of the entire organization.
Making employees - and possibly even former employees - positive ambassadors of the organization has become so important that a new term has emerged: internal marketing.
Competitors say a great deal about one another, some truths, some boldface lies. A marketing organization must be cognizant of this possibility and be prepared to respond.
The automobile industry has used comparison messaging for over thirty years. Coke and Pepsi have been attacking and counter-attacking for about the same length of time.
Negative political messages appear to be very effective, even though few politicians admit to the strategy.
Finally, the media (editors and reporters working for newspapers, TV and radio stations, and magazines) looms as one of the greatest communication hurdles faced by marketers.
In a large marketing organization, the responsibility of communicating with the media is assigned to a public relations staff. Public relations people write press release stories about their organization that they hope the media will use.
If the press releases are not used, the marketer attempts to ensure that whatever the media says about the organization is accurate and as complementary as possible.
For smaller companies, dealing with the media becomes everyone's responsibility. Most businesses now face a new media, the Internet: chat rooms, websites, and propaganda campaigns intended to destroy a business have become commonplace.
Companies that are willing to focus on communication as a means of doing business engage in relationship marketing - a type of marketing that builds long-standing positive relationships with customers and other important stakeholder groups.
Relationship marketing identifies "high-value" customers and prospects and bonds them to the brand through personal attention.
Competition
The importance that competition plays in a marketing organization has already been mentioned. At a minimum, marketing companies must thoroughly understand their competitors' strengths and weaknesses.
This means more than making sweeping generalizations about the competitors. It means basing intelligent marketing decisions on facts about how competitors operate and determining how best to respond.
Often the identification of competitors is fairly straightforward. It is the supermarket on the next block, or the three other companies that manufacture replacement windshields.
There are instances, however, when the identification of a competitor is not clear. Marketing expert Theodore Levitt coined the term "marketing myopia" several years ago to describe companies that misidentify their competition.
Levitt argued, for example, that the mistake made by the passenger train industry was to restrict their competition to other railroads instead of all mass transit transportation alternatives, including automobiles, airlines, and buses.
Today the same mistake is being made by companies in the entertainment industry (movie theaters, restaurants, and resorts), who assume that their only competition is like-titled organizations. Since practically no marketer operates as a monopoly, most of the strategy issues considered by a marketer relate to competition.
Visualize a marketing strategy as a huge chess game where one player is constantly making his or her moves contingent on what the other player does. Some US partners, like Coke and Pepsi, McDonald's and Burger King, and Ford and General Motors, have been playing the game so long that a stalemate is often the result.
In fact, the relative market share owned by Coke and Pepsi has not changed by more than a percentage or two despite the billions of dollars spent by each on marketing.
The desire of companies to accurately gauge competitors has led to the growing popularity of a separate discipline - competitive intelligence. This field involves gathering as much information about competitors through any means possible, usually short of breaking the law.
Spying to Stay Competitive
Most corporate detectives avoid terms like spying and espionage, preferring the more dignified label "competitive intelligence", but whatever they call it, snooping on business rivals has become an entrenched sub-industry.
For example, nearly every large US company has an intelligence office of some kind. Some, like Motorola, Inc., have units sprinkled in almost all of their outposts around the world. Their assignment is to monitor rivals, sniff out mergers or new technologies that might affect the bottom line, even to keep tabs on morale at client companies. A veteran of the Central Intelligence Agency formed Motorola's intelligence unit, viewed as a model in the business, in 1982.
Corporate intelligence relies on a slew of tools - some sophisticated, many quite basic. On the simpler end of the spectrum, business sleuths do everything from prowling trade show floors to combing through rivals' web sites and patent office filings. They keep their ears open in airports and aboard flights. Sometimes they go further. They take photographs of competitive factories, and, increasingly, they rely on new data-mining software that permits them to scan the Internet at high speeds for snippets about their rivals.