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3 ways to thrive in a highly competitive market

Entering a competitive market can be intimidating for any business – regardless of whether it is a new or previously existing business. It is much easier to penetrate and get your share of the market in a less crowded industry than it is in a highly competitive industry. The tight competition makes it a survival-of-the-fittest kind of situation where everyone is racing to get the largest share of customers’ attention as quickly as possible.

Is it possible to thrive in a competitive industry? Sure! In fact, you don’t have much of a choice because no manufacturer’s work is done until products are sold.

Let’s take a cue from the Nigeria’s carbonated soft drink market which has been dominated for years by the two international giants: CocaCola & Pepsi. For so long, it looked like no one could beat them at the game but recently, we’ve seen Rite Foods’ Bigi Cola and other variants shaking things up!

Price sensitive customers are buying into them and they are fast spreading around the country. How were they able to gain their share of the market and give the big players a run for their money?

Here are three lessons manufacturers can learn from Bigi Cola’s entry into the soda market in Nigeria in order to be profitable in a highly competitive industry/market:

1. Competitive Pricing

When entering into a highly competitive industry, you need to research your competition’s pricing. Know what they are selling and how much they are selling it. This will give you an idea of how to structure your price.

Bigi Cola used this method to penetrate the market with their quantity and competitive pricing.

However, even though there is fortune at the bottom of the pyramid, keep in mind that you should not underprice your products to the detriment of your business. 

2. Product visibility

You have a product, and you’re confident it fills a gap in the market. Now it’s time to get it in your customers’ hands. As a new manufacturer, you must be prepared to go to market. This preparation involves:

  • Choosing the most appealing packaging
  • Researching the most effective way to ship your products
  • Deciding on a price that brings good profit margins for retailers, distributors and, of course, yourself.

One thing Rite Foods did right was to make sure their products were visible while leveraging on the existing distribution channel of their sausage business.

Good distributors are key to determining the visibility of your product. They fulfill orders quickly, accurately and help build a market for your product – even in places you can’t reach by yourself. 

So, you have to select your distributors carefully and do your best to support them as much as you can.

How to choose good distributors to stock your products

  • Ask for referrals from friends and business colleagues
  • Choose distributors who carry similar but noncompeting products
  • Choose distributors who sell within the same geographic location of the retailers and consumers of your product
  • Choose distributors who have great business relationships with retailers who stock your type of product

So, how do you convince these good distributors to stock your products?

  • Clearly differentiate your product from the competition- either with packaging or marketing.
  • Share their profit story with them. The reason they are in business is to make profit. So, you must be able to show how your products can help them to achieve that. 
  • Distributors usually prefer to stock products that sell in high volume. If you can’t promise huge sales, you might have to lure them with high profit margins.

3. Quality Advertising

With the advent of technology, there is simply no excuse for manufacturers- whether small scale or large scale not to advertise their products. 

When you advertise, emphasize what makes your product different. If you offer additional services or benefits lacking in your market or offer the lowest pricing, mention this in your advertising.

Bigi Cola for example, increased their bottle size and stated their price clearly on all their advertising materials. This helped them gain quick popularity and gain wide acceptance in the mass market they were targeting.

There you have it! If you do these consistently, after a while, you will become a beautiful bride to a lot of the distributors and you would need little or no effort to bring them on board. Imagine a soft drink distributor who doesn’t stock Coke or Pepsi in Nigeria? Exactly!

It takes time and a lot of investment in your brand to get to that stage but it is possible.

Remember, you don’t have to play at the top of the pyramid to succeed. Find your target market and reach out to them regardless of where they are on the pyramid. 

Are you in a highly competitive industry? Do you want to learn more strategies on how to penetrate into a highly competitive market while staying profitable? You’ll definitely love my Distribution and Product Visibility course. Check it out here