Like any other business, the strong sophisticated growth of consumption and customer demand for FMCGs charge this industrial sector with fierce rivalry among different competitors. Factors like new firms setting up and threatening to become potential competition and products being substituted by similar ones further contribute to market saturation. Everyone wants to increase their market share while retaining existing customers. Last but not the least, the bargaining powers of both suppliers as well as buyers are additional forces to reckon with.
The major competitive drivers focused upon in this article are the market, cost, and quality of the products.
Market Strategies
Advertising and promoting products is crucial to successfully leading the industrial market. Companies who forge reliable relationships with their customers and manage information to date can know exactly the product that’s profitable to their business. When a new campaign is introduced, the existing companies in the relative niche can extend their range of products to remove that competition.
Expenses should be directed to make their marketing techniques impressive, and more importantly, visible to prospective clients. Moreover, some companies tend to be ready to even forgo revenues from one of their existing products for a newer one and even scale down to focus on a particular one if it can help the same brand retain its position in market.
The integration of online collaborative media makes it feasible for FMCG businesses to be completely customer-centered, expanding their facilities and adapting to the needs and requirements of new demographics.
Cost Strategies
A majority of the global population currently enjoys a stable and healthy income, which has naturally led to an increase in consumer demand of FMCG products. Companies are tempted to reduce the cost price of existing products or sell a greater quantity at the same rate.
The speed factor is responsible for ensuring a reduced competition risk while boosting profitability and market share. Keeping up with the digital and mobile world of customers, a new strategy that has come into play is to provide the market with products as quickly as possible. Working to produce smaller batches so as to enhance shelf life and serve them the freshest products in the market, the manufacturers are making sure a high production is available round the clock.
One example is of P&G’s crusade that continuously launched superior products back to back every six months to remove competition from imitators in US.
Quality Strategies
The consumer now is also standing up to demand a quality product while rejecting a damaged product outright. They are fast to switch sides if not satisfied. Even though some companies are not handling their quality services efficiently, this is a major drive for others to invest a high capital. New products that come with value-added benefits for different lifestyles fuel positive consumer attitude and manage their loyalty towards the brand.
Not compromising on their quality, some large-scale companies maintain their status-quo by targeting people from upper middle class or elite class only.
The spirit of competition in FMCG market is a global phenomenon and those willing to be innovative and proactive will surely hold an advantage over others.
