In the first part of this article, the aftermath was several mails and direct messages requesting me to give a further analysis on the strategies that will determine who wins the war or who falls out of the battle. The next few paragraphs will detail strategies that can be deployed to knock off the competitors.
Aggressive Advertisement and Promotion Budget
Some of the feedback I received mentioned that Bigi Cola should not be overlooked in the consideration of competitors. However, feedbacks from consumers indicated that blind tests still showed that Big Cola from the Ajegroup and Bigi Cola from the local company are still far from the taste of Coke and Pepsi. On the other hand, blind tests still bring Coke and Pepsi to a closer shave which means the power of a strong campaign is still needed to keep the brand strong in the mind of the consumers. A good portion of the Advertising and Promotion budget should be set apart for campaign activities that will keep the brand in the top of the mind of the consumers. Consumers who will eventually choose between Coke and Pepsi will not likely do that based on taste but based on the feeling, attachment or bond that may have been developed and this will surely be based on the effect of the campaign activities.
Defend Your Stronghold
No one fights a battle on all fronts without consolidating on areas of strength and expects to win. There is always an area where you are strong and the competitor is weak. To win this war and sustain victory, you need to look for an area or location where you are strong and you must do everything possible to maintain dominance in that area or location. This stronghold could even be a channel. You must do all you can to avoid losing your leverage tactics to competitors in your area of strength. Maintain your penetration strategies in that area. Develop the market much more. Stop your competitor from gaining advantage from you in a market where you are strong. Continue to operate where you are weak so as not to leave any stone unturned but also ensure you guard your stronghold jealously
Exclusivity of Distributors
It is incontrovertible that Coke and Pepsi have a strong network of retailers. That suggests that distribution is not a problem for any of these two giants. However, Big Cola and Bigi Cola, the local brand who is also a new entrant may be struggling to meet up with the kind of network held by the two market leaders. The practice, meanwhile, is to use the same network of distribution that the market leaders are using. The success of this is dependent on the allowance that the market leaders give. It is possible that the bond that exists between each of the distributors of Coke as well as Pepsi may be a difficult bond to break into. In this case, the new entrants may find it difficult to develop their own network. It will cost so much money and time. In the case where the bond in reference is not strong enough such that the new entrants can easily leverage on the existing network, then it will not take time neither will it cost so much to get a distribution network for them. To prevent this, therefore, Coke and Pepsi need to ensure exclusivity of their distributors. This can be done by giving such distributors an incentive for ensuring exclusivity.
Exclusivity in Outlets and Channels
Similar to the point above is to have a Service Level Agreement (SLA) with some outlets and channels that are very strong. Such arrangements presently exist for each of the leading brands. These include Coke and Chicken Republic (a major restaurant in Nigeria), Coke and Coldstone (a major ice-cream point in Nigeria), Pepsi and KFC (a major restaurant in Nigeria). There are some others but for time and space, these few are mentioned. Many more of these arrangements are needed to ensure victory in this Cola war. Increase your negotiation power and ensure exclusivity for your products in the outlets under consideration.
Prevent Espionage: Guard Your Trade Secrets and Strategies
Your trade secrets are your arsenal that keeps you winning in the market place. You must do everything possible to protect it from getting into the hands of the competitors. Each brand must not allow the competitors to know what makes them tick in the trade. Competitors are ready to pay any amount to get at what is making the market leader succeed. Likewise, the market leader is as well ready to do same to know what it takes to gain more market share from the competitors and that is why each one must be on its guard to prevent his strategies from leaking out. This way of preventing espionage involves employee engagement to prevent employee turnover. These employees may eventually be recruited by competitors and that may be catastrophic. The same thing applies to your suppliers who are aware of your trade secrets. Find a way to protect all these from being spied upon by competitors.
Watch out for the concluding part of this article next week…