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Glossary keyword - Competition

Competition

Competition in regards to marketing refers to the rivalry between different companies. These companies are likely to sell the same types of products and services. They all have the common goal of maximizing profit, revenues, and market share. Competition is seen as a positive practice because it motivates companies to increase their quality. They do this by maximizing the four aspects of marketing, which is also referred to as the four Ps. The four P’s are Place, Promotion, Product, and Price.

After perfecting the four P’s mentioned above, companies can create a robust digital marketing strategy that allows them to have sustainable growth. Through careful examination of the competition, companies and businesses can discover the weaknesses of each other. Exploiting these weaknesses, and strengthening these aspects in their own companies, businesses can ensure long term survival. 

Types of Competitors

There are mainly three types of market competition that businesses need to understand and perfect. 

Direct Competitors

Direct competitors are viewed as one of the main priorities for any business looking to grow. A direct competitor offers the same services and products that are aimed at the same target audience. This is where the real race between different companies takes place, because they are all looking to improve their market share and profits in the same area.

Frequently, companies, or businesses that are direct competitors will have the same distribution models as their competition. 

Indirect Competitors

Indirect competitors work similarly to the ones that are direct competitors. They sell the same products and services but have different end goals. Indirect competitors reach their goals through different strategies. The end goal, however, is to grow revenues, making them competitors.

Replacement Competitors

Replacement competitors are one of the hardest competitions to identify. The reason for this is, they are seen as a product or service a client might choose over his or her regular choice. According to many experts, customers are the ones that define competitors for many companies. This leads to businesses and companies all racing to perfect their offerings to attract and keep as many customers as possible. Using tools such as competitive market analysis, many businesses are able to pinpoint their competition and areas to perfect. 

 

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