Sun-Tzu, Napoleon and the Marketing Battleground

One of the most famous comedy images of the 1990’s was Steve Coogan’s egotistical salesman, Gareth Cheeseman, giving himself a motivational speech in the full length mirror of his budget hotel room.  In the speech he famously delivers the line ‘You’re a Tiger’ whilst pretending to have ferocious claws.

This comedic trope play on the idea that business is combative and war like.  Salesmen are warriors constantly in combat and business leaders are generals barking out orders and pushing wooden tanks around giant battle maps.

Like much comedy, this is a use of exaggeration to humorous effect.  It is also funny because deep down in the comedic character of Coogan’s character, there is a grain of truth.  Cheeseman is a monster displaying the worst aspects of a travelling salesman; but it wouldn’t be funny if some of those traits did not exist in real life.

In 1981, Kotler and Singh wrote a book called Marketing War, which used military language to express the competitive nature of business.  Paul Fifield’s book, Marketing Strategy: The Difference Between Marketing and Markets, operates around the life and campaigns of Napoleon Bonaparte.  The book is littered with quotes from Bonaparte on the management of military campaigns and the organisation of his army.  I own and often read Sun-Tzu’s The Art of War and Niccolo Machiavelli’s The Prince.

However, business is competition not war.  Rather than warfare, sport is a better metaphor for marketing.  This is perhaps why Alex Ferguson, the former Manchester United manager, is a visiting Professor at Harvard and why so many retired sportsmen go on to have careers as motivational speakers to the business community.

And of course, companies competing in the same market often collaborate in joint ventures, particularly when they are developing expensive technologies or entering new geographic markets such as China.  For example, a number of automotive manufacturers have jointly developed chassis models and other components to cut costs.  Some ‘twinned vehicles’ are identical apart from the badge on the bonnet.

But military terminology is a useful shorthand for strategy.  That is why many professional marketers use it.

When a market becomes mature, it is often difficult, if not impossible to expand that market further.  For example, Coca Cola is sold in virtually every country in the world.  How do you grow the market for Coke further?  If your goal is to gain market share; to take on market leadership; your only option is to take market share from your competitors.

This doesn’t just affect big firms.  The goal of a niche, or specialist, strategy is to take a market leadership position and to gather as much market share as is needed to gain a leadership position in your speciality.

Market-leading products are often high price brands.  Market leaders have the strength to resist the demands of distributors and retailers e.g. paying for prominent shelf position.  Market leaders can demand trade discounts and discounts for bulk purchases. Market leaders can ‘weaponise’ economies of scale and experience effects to lower unit and peripheral costs.  All this creates opportunities for greater sales volumes and higher profit margins.

So if you are in a mature market, and most companies in mature western economies are, how to you compete to gain market share?

It is worth mentioning before explaining attack strategies, that the press and politicians often make much play on the high economic growth figures in countries like China and India in comparison to the UK and EU.  This is easily explained in that these countries have high capacity for market growth, they are developing economies, whilst here in the West, such opportunities for market expansion have passed.  For example few homes in the UK do not have indoor plumbing, whilst in India many potential consumers of  do not have a plumbed in toilet and the open sewer runs down the middle of the street.

The first option for attacking a competitor to gain market share is a frontal assault; to attack your competitor head on.  If you are a small firm competing against a much bigger market leader, this strategy is fraught with difficulty.  Four factors determine if you will be able to use this strategy:

  1. You need a clear and sustainable competitive advantage.
  2. You need to have proximity in other activities e.g. you need to have better customer service and more efficient supply chains than your target competitor
  3. You must be able to withstand the retaliation activities of your larger competitor e.g. through the use of intellectual property rights or the ability to put new technology in place rapidly. This is one of the reasons Nokia was slow to react to the smartphone. Apple and Samsung have regular intellectual property battles.
  4. You need to have the resources to compete.  For example, you need to give significant resources to your marketing and NPD departments.

The second option is a flanking attack.  You attack the exposed flanks of your competitor.  Ground which may be weak or unguarded.  This may mean attacking geographical regions where your competitor is weak or market segments not seen as priorities by your competitors.  Hopefully, an attack on your competitor’s flank will not attract the same type of defence as a head on attack.  If the competitor is not being challenged in their core market, the may initially ignore your attack and your attacks initial success may result them in losing ground.  The success of Dyson is one such flank attack.  Dyson attacked a customer segment who were more interested in technology and design; A high end, high quality segment.  And Dyson did so at a time when Hoover was in significant financial difficulty in the UK.  A flank attack can then be turned into a bridgehead to gain market share in your competitor’s core market.

Your third option is an encirclement attack.  You attack your competitor on all sides.  You hit them with all aspects of the marketing mix.  You cover every option a consumer in the market would want.  Seiko produce over 2000 varieties of watch.  Whatever type of watch a consumer wants, Seiko will provide.  Firms such as Mini and Brompton Bicycles use technology for mass customisation where the consumer is given a huge number of product options and effectively design their own folding bike or car.  You can vertically integrate supply and distribution chains, removing strategic space from your competitors.  You undercut your competitor’s prices.

The fourth option is a bypass attack.  You circumvent your competitor’s market position.  This is the technological leapfrog of market disruptors.  You can also bypass through diversification.  This is why supermarkets entered the banking industry, why Tesco sell mobile phone contract and have opticians in their stores.

The fifth and final option is a guerrilla attack.  This is an attack through pin pricks not big battles.  It is the strategy of being unpredictable through the use of surprise price cuts, special offers, and spates of heavy advertising.  This may be the only feasible option for SMEs dealing with a larger competitor.  It is difficult to defend against an unpredictable opponent.  But beware; a guerrilla approach may result with head on retaliation by your competitor.

It is also worth remembering that your opponent in the market will have a range of defensive strategies to cope with each of the attack options.  This could involve the creation of fighter brands or horizontal and vertical integration in the market.