Media scanning and new competitors

Media scanning

We can learn a lot about the competitive environment by scanning our competitors' ads. Changes in a competitor's advertising message can reveal new product offerings, new production processes, a new branding strategy, a new positioning strategy, a new segmentation strategy, line extensions and contractions, problems with previous positions, insights from recent marketing or product research, a new strategic direction, a new source of sustainable competitive advantage, or value migrations within the industry. It might also indicate a new pricing strategy such as penetration, price discrimination, price skimming, product bundling, joint product pricing, discounts, or loss leaders. It may also indicate a new promotion strategy such as push, pull, balanced, short term sales generation, long term image creation, informational, comparative, affective, reminder, new creative objectives, new unique selling proposition, new creative concepts, appeals, tone, and themes, or a new advertising agency. It might also indicate a new distribution strategy, new distribution partners, more extensive distribution, more intensive distribution, a change in geographical focus, or exclusive distribution. Little of this intelligence is definitive: additional information is needed before conclusions should be drawn.

A competitor's media strategy reveals budget allocation, segmentation and targeting strategy, and selectivity and focus. From a tactical perspective, it can also be used to help a manager implement his/her own media plan. By knowing the competitor's media buy, media selection, frequency, reach, continuity, schedules, and flights, the manager can arrange his/her own media plan so that they do not coincide.

Other sources of corporate intelligence include trade shows, patent filings, mutual customers, annual reports, and trade associations.

Some firms hire competitor intelligence professionals to obtain this information.

New competitors

In addition to analysing current competitors, it is necessary to estimate future competitive threats. The most common sources of new competitors are:

    * Companies competing in a related product/market

    * Companies using related technologies

    * Companies already targeting your prime market segment but with unrelated products

    * Companies from other geographical areas and with similar products

    * New start-up companies organised by former employees and/or managers of existing companies

The entrance of new competitors is likely when:

    * There are high profit margins in the industry

    * There is unmet demand (insufficient supply) in the industry

    * There are no major barriers to entry

    * There is future growth potential

    * Competitive rivalry is not intense

    * Gaining a competitive advantage over existing firms is feasible

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