Why a new approach to competition?
Textbooks offer almost no practical advice about dealing with competition.
A study of marketing textbooks shows that they contain almost no practical advice on how to protect a marketing plan against competition.1
Kotler discusses a so-called position defense where a company would try to protect a brand basically by becoming bigger through related acquisitions and a flank defense where a company would try to protect a brand by creating other brands at adjacent price points. But most of his suggestions are how to attack and defend market positions through such actions as "continuous innovation" or "planned contraction," neither of which is something that can not be matched. Still, Kotler's coverage is more extensive than many books, some of which don't even have competition in the index!
Booth doesn't discuss competition. Frain cites competition as an uncontrollable element (p.38). Guiltinan and Paul don't have competition in their contents or index. Other textbooks, such as Sudharshan cover competition but not strategies to protect against competitive reaction to a firm's marketing plans. The other textbooks in our study mentioned competition but always in a way that was either theoretical, say by defining oligopoly, or impractical, say by defining competitive advantage but offering no way to achieve it, e.g., "... competitive advantage is one that others cannot or cannot easily duplicate." (Czepiel).
A few textbooks come close to the notion that certain actions cannot be duplicated. For example, Urban and Star give examples of competitive advantage such as distinct competence in R&D, more presuasive advertising, a sales force that may be better at solving customers' problems or channels with better delivery time. But they then say that "If competition cannot readily match such distinctive capabilities, it may be possible to maintain a profitable business that is relatively immune to destructive competition" (p. 184). What is not said is how these actions cannot be matched.
Two textbooks, however, discuss ways to protect a marketing plan against competition, even if they do not say so with the directness of MAGIC. Jain talks about erecting barriers based on size, access to resources or customers. These can be interpreted as actions that probably will not be matched (size) or cannot be matched (resources or customers) if contracts restrict access. He goes on to suggest that [production] cost differentials can lead to higher margins that may create a successful barrier and [advertising] cost differentials can lead to barriers of entry or matching.
Holloway and Hancock give examples of brands with patents or trademarks that are "unique to their owners." In some ways this is the most direct statement of how to protect a brand against competition, even though it is probably the most obvious action and appeared about 40 years ago.
Our conclusion is that marketing textbooks do not clearly focus on practical ways that a company can protect its marketing plans from compertitive reaction.
Czepiel, John A., Competitive Marketing Strategy. Prentice Hall, 1992.
Frain, John, Principles and Practice of Marketing. Pitman Publishing, 1996.
Jain, Subhash, Marketing, Planning & Strategy. South Western Publishing Co.,1990.
Kerin, Roger A., Vijay Mahajan and P. Rajan Varadarajan, Contemporary Perspectives on Strategic Market Planning. 1990.
Kotler, Philip, Marketing Management. Prentice Hall, 2000.
Sudharshan, D., Marketing Strategy: Relationships, Offerings, Timing, and Resource Allocation. Prentice-Hall, 1995.