And many people believe that, with the position of "born late", businesses can hardly get into this fierce competition. In fact, the "shadow" of the predecessors can still be trampled and "overtaken" by companies that only participate after the market has developed strongly. This is especially true if the market has one of the following characteristics: - The market consists of products that provide similar benefits without any product being clearly superior;
– Market growth is relatively slow but is expected to accelerate as more and more customers realize the benefits of the product;
– Customers who buy products are not very satisfied with existing products;
– Most product distributors have not yet included this product in their products or have not yet competed to increase customer choice.
In most cases, the key to success for latecomers is to accept their “latecomer” status and admit that becoming a market leader may not be part of their growth strategy (although not impossible).
Typically, latecomers will have to do better to gain a second-row position or focus on exploiting a gap in the market. Although they do not have the dominant position of the first-mover, second-row positions can also potentially yield significant profits, at least when the market is growing well.
There are several strategies for achieving success with late-to-market products. Entrepreneurs should consider the following advantages:
Low price advantage The most obvious strategy for a late entrant is to gain market share by selling a product at a price lower than that established by a competitor. If the competitor has not yet achieved consumer loyalty, a product that performs the same function but is sold at a lower price will have an advantage and a chance to gain a large market share, at least in the short term.
If a company plans to compete on price, it should be prepared for retaliation from competitors, who will not easily give up sales because of a low-priced newcomer. The incumbent usually responds by increasing promotions and discounts to customers. If the incumbent is strong enough to survive the price war, it can gain a foothold in the market and force the incumbent to share its market share. But in this case, the risk is quite high.
Create or increase added value of the product
Since engaging in a price war is a high-risk strategy, we suggest an alternative that has the potential to yield greater and more sustainable success: offering additional benefits along with the main product. For example, a company can add value to its products by using attractive packaging, detailed, easy-to-understand product instructions, after-sales service centers in locations that are easy for customers to access, and extended warranties.
In addition, the latecomer may not need to create additional value by adding new uses, but the marketer may simply focus on promoting existing but underexploited product features, for example, by comparing the new product with those already on the market or drawing customers' attention to advantages in the production process (such as local production, advanced production technology, skilled labor, etc.).
Exploit the advantages of convenience
The classical concept of the product life cycle holds that new products attract the attention of different groups of users at different points in time. A small market will consist of the first buyers (often called pioneers) who are willing to try the product first and the majority of other customers (called the late adopters).
Early stage buyers are often looking for more personal benefits, such as appealing taste or beautiful appearance, while later stage buyers are often attracted by the outstanding benefits of the product compared to other products on the market, for example, the new product can help them save time or money.
However, this group often has strong “antibodies” if information is released too much, to some extent, this can be considered a skeptical customer group. For this group, it is advisable to indicate the ease of using the new product.
Promotional campaigns… for free
Another strategy for new entrants is to offer promotions that other firms do not offer in order to gain the attention and trust of buyers. As mentioned above, competing directly on price is usually only a short-term solution, because competitors will certainly retaliate fiercely.
However, marketers can consider offering financial promotions that do not directly reduce prices but still reduce total costs, such as exchanging old products for new ones, giving coupons to buyers, or offering free products and services.
Buyers will calculate and compare the total cost with similar products from competitors. Other types of promotions can also be considered to attract customers who are still hesitant and lacking confidence in your product, for example, applying a warranty that allows for a refund of the purchase price, free assembly and providing easy-to-understand instructions for use, etc.
Competition to excel
Finally, instead of spending a significant amount of money to differentiate your product from similar products that have been on the market for a long time, why not try to be more innovative and work harder than your competitors?
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