How to Deal with Unfair Competition?

A few days ago a friend of mine asked me for some advice on how to cope with unfair competition in a certain region of the country. It was the common situation – bad-mouthing in front of clients, speculating with prices, lying about the products’ qualities, providing wrong information about who is the official representative of a foreign producer and so on.

While preparing my advice to his sales people, I asked the omniscient Google to find the exact phrases:
–    “нелоялна конкуренция” (in Bulgarian)– 82 200 occurrences
–    “unfair competition” – 3 440 000 occurrences

Then I put some efforts to calculate the correlation of these results to the number of people speaking the corresponding language – about 433 million people with English as their mother tongue (to make it easier I included only USA, Canada, Great Britain and Australia), and 7.3 million Bulgarians.

It turns out that “нелоялна конкуренция” (the phrase in Bulgarian) appears 14 times more often than the phrase in English in terms of the number of people speaking the corresponding language as their mother tongue, taking into account the inaccuracy of “the sample” (in fact, the English speaking people are much more)!

So, why do Bulgarian people speak about unfair competition 14 times more often than do English speaking people? Maybe because it is more common in Bulgaria…? Or because traditionally we tend to blame others for our own failures…? You might think of yet another reason or even decide to go deeper and find in what context the phrase appears☺

I think there is no sense in speaking about “unfair competition”! Competition assumes a conflict of interests in which each participant acts according to its own understanding of ethics, morale, abiding the law and sticking to agreements. People differ and so does the way they act; they think they do something in the right way even though the others might blame them as unfair competitors.

I think that the battle with unfair competition should happen in customers’ minds and not mainly by acting directly against competitors. Even if you use extreme methods and manage to physically eliminate your competitors, it is certain that new players will appear. Think of the drug market where fighting and murder are common ways of beating competitors – when a dealer is removed, another one appears, and usually he is even stronger and more brutal than the previous one.

In my opinion, the most successful way of dealing with “unfair competition” is by placing barriers in customers’ minds, that competitors could hardly overcome. This is done by building a provider’s business model in which:
1. The company makes effective efforts to be the best in what it considers as its core business.
2. The process of communication includes clear messages about how the product or the service would improve the customers’ life (would make it easier, healthier, more fascinating etc, or a combination of these benefits).
3. All company employees make efforts to build and maintain a sound system of product understanding and immediate perception in the customers’ minds, so that they could be turned to loyal clients.
4. There is a strong emotional bound with customers, which is based on their experience before, during and after the sale.

This does not mean that you should not take any other opportunity to make it harder for your competitors by means which comply with your understanding of ethics, morale, abiding the law and sticking to agreements.

There are situations in which you should support your competitors! Here are some typical examples:
1. If you have one or two weak competitors it is better to keep them because if they “die” someone stronger than you might replace them.
2. If you are to launch a new product category, you’d better collaborate with competitors in order to establish the market. For example, if you sell frame houses, it is better to work together with other competitors to create the interest and demand that will pull some business from the traditional monolithic type of building.
3. If you are to address the public administration to demand some amendment to law or improvement of the business environment, the stronger economic force you stand for, the better your chance of success is.
4. If you need an expensive customized market research, it is better to share the costs with your competitors. The benefits from the research analysis will depend on the knowledge and expertise of each company’s professionals.

Let’s go back to the subject of “loyal customers” as a way to cope with “unfair competition”. I wonder how a dealer of German automobiles (i.e. a competitor) would sell a car to an Alfa fan competing with the Alfa Romeo brand representatives… This is almost impossible because loyal customers not only adore and rigorously defend their favorite product or service, but are also ready to forgive any inconveniences.
Some time ago I read in a forum of Alfa Romeo fans that because they were dissatisfied with the incompetent service of the brand provided in Bulgaria (I do not know whether they are right or not), they had started negotiations with a service office in Thessaloniki, Greece asking it to provide the guarantee support of cars bought in Bulgaria.

The dissatisfying automobile service is a serious problem for every car owner. Loyal fans, however, do not change the brand but look for creative solutions … and buy the next Alfa Romeo paying no attention to attractive price offers, mean rumors and comments that Italians are not good at making cars, “facts” from “a reliable source of information” and other similar attempts to be detracted.

How to attract such fans? Here are my ideas about some key things that could be done:
1. Customers should be really placed in the center of the business, and not just pretending so in company brochures and top management’s dreams;
2. Someone should start thinking all the time how to improve business activities – how more work could be done in less time, with better quality and at lower price;
3. Someone should undertake the task to make all employees think as players of a team and passionately act like one when they strive to meet clear corporate objectives;
4. Someone should intentionally work to create a business model at which potential customers become buyers and buyers become loyal clients.

NB! Brand supporters might be also people who have never bought a product in general or from a particular provider, i.e. these are your potential customers. If you manage to attract their attention (“How” is a separate discussion topic), you can be sure that they would consider you when they decide about a product or a provider.

I started with “unfair competition” and I end up with “loyal customers”… because customers are of crucial importance in each business consideration!

Good luck!

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