Daily Bulletin

The Property Pack


Today, many start-up automotive markets have fallen into the commoditization zone. Consumers no longer see any difference between them, except for the price. However, stiff competition can have a negative impact on business: sales companies are as well as vin checker companies losing profits as they are forced to lower prices. How to survive in a competitive environment and increase sales of a particular niche? 

The only way to survive is an unconventional approach to development. If the company has a decline in sales in a mature market, it means that it does not invest in updating the product or service , and does not care about its specific characteristics. Let's look at the tools to help differentiate the product in the automotive industry. 

Tough Competition? Change your Company Strategy

There are two business strategies, a supplier and a partner. Which one a company follows determines whether it can make money in a highly competitive and commoditized environment.

The supplier strategy is characterized by mass: mass production, mass distribution, mass consumption, and advertising. The company's products are aimed at all customers who are willing to buy them. This model was basic in the XX century, but today it has outlived its usefulness - only a partner strategy will win in the global market.

What does this approach look like in practice? The company chooses a market segment where it can do something better than its competitors and then adapts the mass production to the needs of a particular customer in that segment.  

The commonplace truth: the customer will choose you, only if you find out what exactly he needs and what his needs can satisfy you.

Identify needs. To begin with, train employees who are directly in contact with customers to memorize all their complaints, questions, objections, perplexities, and reactions related to your product or service. Analyzing this information will reveal exactly what the customer doesn't like about your product and what could be improved in it.  

A Startup in a Competitive Environment: 6 Ways to Stand Out

There are several ways to give a product or service the consumer properties that are most valuable from the buyers' point of view: 

  1. Changing the product or its purpose.

Be sure to find out how convenient it is for the customer to buy your product. If the logistics are poorly organized, find a way to adjust for example details on a car to the customer.  

  1. Changing the payment terms or sales system.

Differentiation can be considered successful if at marketing research a considerable part of clients declares a pronounced readiness to buy your products again. 

  1. Improving the quality of a standard product.

This method is effective only when there are customers in the market who need it. The company improves the quality characteristics of the product. Accordingly, the price of the new product will be higher. 

  1. Improvement of logistics.

Be sure to find out how convenient it is for the customer to buy your product. In the automotive industry, the car checker comes in handy for this. If the logistics are poorly organized, find a way to adjust it to the customer.  

  1. Distribute your production geographically.

This method is convenient for large companies: they create production enterprises in different parts of the world so that there is always a local plant near the client. The pluses are obvious - the delivery time of the goods and the companies' transportation costs are reduced. This becomes an advantage, for which the client pays - by choosing this global supplier, even if the price of his goods, due to subjective reasons, is not lower than that of his competitors. 

  1. Expanding the range of services.

Experience in the international market allows you to share with clients the rules of doing business in one or another country, depending on the established business culture. 

As we can see, it is possible to achieve differentiation today. The main thing is to apply a comprehensive approach to the study of customers and adjust to them. Only this will help the company to avoid product standardization, stiff competition, and, therefore, getting involved in price wars, in which there are usually no winners.

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