Death Of Competition

Why Competing is KILLING BUSINESS

And what you can do about it...

Stephan Stavrakis
 DEATH OF COMPETITION :: Why competing is KILLING BUSINESS Stephan Stavrakis 2

(No, Scratch That...) The Extinction Of Competition

So you think competition is good, huh?

“Businesses are dying In the early days of business, people thought that business was like sports or war.
You had to do whatever you could to stomp or kill the competition. Back then that
because of
may have made sense because the supply and demand chain was completely
competitive and
different.
bottom-line thinking”
The choices a consumer had were maybe a few dozen. There were competitors
but nowhere near as many as we have today.

A little competition never hurt

anyone
The operative word is little. Today with
millions of choices available to the consumer,
the competitive mindset forces business
owners to feel like they are just a Drop in
the bucket of market share.

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DEATH OF COMPETITION :: Why competing is KILLING BUSINESS Stephan Stavrakis 3

Businesses suffer when they compete...

Times are changing and many great businesses are falling by the wayside. When a
business fails it s quite easy to blame outside factors, like the industry, the product,
the economy and, let s not forget, the competition.

Coffee Chains: Tim Hortons a chain of coffee houses, lost $43.4

million trying to Break in to the US market" It was just a highly
saturated market of quick service restaurants," said Spokesman
David Morelli. "It was not just one competitor. There were
several..."(November 11th, cnbc.com)

Airlines: Since 2001 airlines have lost $60 billion because of

federal taxation and market saturation (January 8th,
www.nytimes.com

Car Manufactures: By confusing the essence of his business

with numbers, Akio Toyoda has dug himself into a very large
h o l e ( R e c o r d - B r e a k i n g R e c a l l s . . . ) . B y t u r n i n g To y o t a ' s
obsession from quality and reliability to sales and
p r o f i t a b i l i t y, h e m a y h a v e u n w i t t i n g l y d e s t r o y e d t h e
reputation -- the brand -- that took four decades to create.
(www.coolmarketingstuff.com Feb 27th 2010)

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 DEATH OF COMPETITION :: Why competing is KILLING BUSINESS Stephan Stavrakis 4

Change happens whether you want it to or not...

It s no longer just about blaming. It s about taking responsibility.

Things must change, and they must change now. It s prevalent in
small, medium and large businesses

Most businesses today are dying a slow death because owners are
generally focusing on exactly the wrong things - the competition and
the bottom line.

Every minute focused on competitors or the bottom line is one

minute taken away from creating the real moneymaker for any
business, a magnificent customer experience.

This is why customers are losing trust and respect for business in
general!

“Every minute focused on Millions of dollars are spent every hour of every day on marketing, advertising/PR
competitors or the trying to out-do, out-hustle, out-maneuver and one-up the competition, wasting
bottom-line, is one minute vital resources that could be used in creating an amazing customer experience,
taken away from creating a
magnificent customer This purpose of this paper is to debunk the dangerous mindsets and activities that
experience” create commoditized markets due to competitive and bottom line thinking. In other
words, why your best intentions are actually killing your business.

The goal is to put the focus back on the customer and begin to position businesses
to restore trust and respect from the customer.

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DEATH OF COMPETITION :: Why competing is KILLING BUSINESS Stephan Stavrakis 5

YOU are the reason your business is a commodity.

Stephanʼs Maxim: Competition = Commoditization

Commodity definition:
A commodity is a product or service for which there is a demand but which is
supplied without any real differentiation by multiple suppliers. Commodities have
pricing that is basically universal no matter who produces it. To customers
commodity items are all the same.

As such, goods and services that could formerly command a premium price have
become commodities because their brands have been white-washed in the mind of
the consumer.

Competition definition:
Competition is a contest between individuals, groups, nations, animals,
etc. for territory, a niche, or a location of resources. It arises whenever
two or more parties strive for a goal which cannot be shared.

Competition occurs naturally between living organisms which co-exist in

the same environment.

Business is associated with competition since most companies believe

they are in competition with at least one other company over the same
group of customers.

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DEATH OF COMPETITION :: Why competing is KILLING BUSINESS Stephan Stavrakis 6

Itʼs a common phenomenon, and gives you a 1% chance of success

even if you are the best.

As companies use their resources to out-do or one-up the

competition, they drop the ball and forget to focus on the
value provided to the customer. Forgetting about the
customer makes customers suffer the consequences of the
competition bloodbath .

This creates nothing but confusion and frustration to the

consumer, because every company is fighting to get a piece of
the ever-shrinking pie.

A commoditized market case study: Toothpaste

There are hundreds of brands of toothpaste out there that DO
EXACTLY THE SAME THING: Clean teeth.

Imagine for a moment you didn t have a preferred brand of

toothpaste. You go to the toothpaste aisle in your supermarket
and see two HUGE walls of toothpaste about 40 feet long and 7 feet high.
How do you pick? How do you even begin? You d be left utterly confused
and frustrated.

Or what if your brand was going off the market? Now what?

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 DEATH OF COMPETITION :: Why competing is KILLING BUSINESS Stephan Stavrakis 7

There are so many styles and brands to choose from. Why? Because the
market has too many players doing exactly the same thing: trying to sell
tooth paste.
An example of a virtually new market in the toothpaste market is sensitive
teeth toothpaste.
“If we charge more money,
we can increase the quality Currently there are only about 3 different toothpastes for the sensitive
to create a win-win teeth market so there is not that much of selection.
situation between customer
and business owner” If a company uses the words better or best in their marketing it might
work for a while because there is less competition.

However, when other companies finally notice and the sensitive teeth
market becomes riddled with competitors (like the whiter teeth market)
the bloodbath will start anew.

The sensitive teeth market will be commoditized and it will be next to

impossible to gain profitable market share.

As you can see, Commoditization happens when supply outweighs demand in

the marketplace.

The last thing the market needs is another cell phone, another plumber,
another insurance agent, another computer company…

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DEATH OF COMPETITION :: Why competing is KILLING BUSINESS Stephan Stavrakis 8

In Short, Competition = Commoditization.

This doesn t mean that these people can t go out and become profitable in
the market, they just have to create a distinct differentiation through
innovative thinking and positioning.

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DEATH OF COMPETITION :: Why competing is KILLING BUSINESS Stephan Stavrakis 9

The competition mindset versus the positioning mindset

The competition mindset creates nothing but stress and anxiety for the business
owner, and ultimately forces them to think about what the competition is doing
rather than what the customer really wants and would be willing to pay anything for.

Let s face it, if business owners listened to their customers and focused on the
quality of the experience instead of the quantity of deliverables, they would have
more fun creating more value for the customer.

The positioning mindset is different. It focuses all the business owner s attention
on providing the most USEFUL and UNIQUE experience the customer could ever
want. The idea is to appeal to a single niche of a market rather than everyone with
a pulse.

Positioning is fully customer focused. In order to succeed in positioning, a

business must find what s missing in the market and begin to meet the
needs of that specific consumer. When that unique need is met, the value
instantly goes up because there is no longer any comparison, and more
can be charged. This creates a WIN/WIN situation between customer and
business owner.

The positioning mindset is about creating a unique, emotional and specific

experience for a market so it can t help but buy! The positioning mindset
allows you to stop being just another company and helps you become
the only company to do business with.

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DEATH OF COMPETITION :: Why competing is KILLING BUSINESS Stephan Stavrakis 10

Itʼs all white noise

You can t open a newspaper, listen to radio/tv ad or even see online advertising
messages today without getting overwhelmed with commoditized messages.

Every moment of the day we are being bombarded by advertising and marketing
messages. These messages that sound, look and feel the same.

Attention getting is getting less effective

If you ask most advertisers, they ll tell you attention getting methods have become
less effective. You can easily check this for yourself by
Googling marketing effectiveness.

For most companies, what worked 5-10 years ago is

either not as effective or it s taking far more money,
time and resources to get the same level of attention.
(and usually it s less)

This is causing companies to jump on the next big

thing, whatever it may be, for which they end up
spending inordinate amounts of money on marketing or
advertising methods that are merely a flash in the pan
result.

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DEATH OF COMPETITION :: Why competing is KILLING BUSINESS Stephan Stavrakis 11

The big 3 common commoditized messages

Attempts to get consumer attention are being ignored, because virtually all
marketing messages are White Noise by now. Everyone is saying the same thing.
All these messages are using one or more of, what I call, the big 3 Hey Look at
Me! positioning methods.

The We are better message

You can t open a newspaper or listen to the radio today without being bombarded
by ads telling us how much companies are better they are than their competition.

• We re the best company!

• We have 30 years of experience!
• Pick us! We are the best!

However you slice it, or say it, the message you are left with is
Pick my business because it s BETTER . As consumers we are
bombarded with this nonsense thousands of times a day.

The message is heard so many times that we simply tune it out.

Yet, in the common marketplace, this is the de facto standard
message we get from vendors.

Hence, as consumers, we are now immune to it. It s a waste

of time, money and energy because it s being ignored.

(Blacked out to protect the guilty...)

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DEATH OF COMPETITION :: Why competing is KILLING BUSINESS Stephan Stavrakis 12

The Hey, look at our new features! message

If the we are better messaging doesn t work, the next default is to attempt to
make something Better by adding different features to the product/service.

This type of activity is a common thing in the cell phone market. When some
company comes out with a cool feature, then you get a slew of other companies
trying to outdo them by adding more features to the phone, or making better
features.

BlackBerry is trying to compete with

iPhone with their current advertising
using the Hey, look at our new features!
messages.

They are so poorly positioned at the

moment, and the more they try to out-do
Iphone the more they are going to
commoditize the BlackBerry and pretty
soon it wont matter if you have a Iphone,
BlackBerry, or Android.

Although the company won t die (at least not soon) it will surely lose major market
share in the next few years. They need positioning and fast....

As tempting as this may seem, all feature positioning does is confuse the market,
destroy customer loyalty and again makes the product or service into a commodity
that can be price shopped.

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DEATH OF COMPETITION :: Why competing is KILLING BUSINESS Stephan Stavrakis 13

The We have the best price! message

When all else fails, such as the market doesn t buy the idea of a better product or a
cooler feature, the only thing left for the business with a competitive mindset is to
drop the price to grab some market share.

This is a last resort that most businesses default to in order to position themselves
differently in the marketplace by being the Best Price. But this isn t
differentiation. It s desperation!

Although sometimes the we have the better price message can work as a short
term positioning strategy, more often than not when the company tries to
differentiate on price, it forces everyone else in the market to follow suit, like
airline fare wars.

When this happens the profit margins suffer and, ultimately, the quality to the
customer suffers.
These three common positioning practices are slowly killing market share,
marketability and ultimately the business itself.

When the profit margins suffer, the customer suffers from poor quality of product/
service thereby ultimately decreasing the trust the customer has in that product or
service and the market as a whole.

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 DEATH OF COMPETITION :: Why competing is KILLING BUSINESS Stephan Stavrakis 14

Monkey see - Monkey do - Monkey starve!

When you sound like everyone else, and do what

everyone else does, the quality of your offer will
“Customer loses trust and suffer, prices will go down and the market will lose
defaults to “The best trust and respect and become frustrated and
deal!” thinking” confused and buy less. PERIOD.

This is the Monkey see - Monkey do business

model.

The economy is not the problem. The method of marketing is not the problem. The
medium used for advertising is not the problem.

The problem is the MESSAGE...

Because of the increase of focus on competition, businesses have lost the ability to
create innovative and distinctive messages that speak to the exact wants and
needs of the customer…you know, the people who actually buy the stuff!

• Everyone sounds the same.

• Everyone looks the same
• Everyone talks the same
• It s all THE SAME...

Sameness is making all products and services into commodities in the mind of the
consumer, forcing them to make buying decisions based on the lowest common
denominator: price.

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DEATH OF COMPETITION :: Why competing is KILLING BUSINESS Stephan Stavrakis 15

Why the competition is really killing your business

By now you realize, that focusing on competition automatically creates
commoditization.

The problem with this level of thinking is far more costly to you, the business
Something to ponder...
owner, than you realize.

How much money

can you put toward The more you do the more the cost
improving the
The cost of doing business goes up because you are doing MORE. By doing more
customer experience
you instantly increase your cost of doing business.
if... you are
spending most of
Example: Restaurants open longer hours, add
your money trying
more items to their menu, and cut labor in
to out-do the
attempts to increase profit. This at first might
“competition? sound appealing. However what s not taken into
account are the consequences of these actions.
Time, money and energy required to open longer,
with less staff, and provide more, creates
inefficiencies that together end up costing the
business way more money than just money.

More marketing, more advertising, more social

media, more trade shows, more phone calls etc.

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DEATH OF COMPETITION :: Why competing is KILLING BUSINESS Stephan Stavrakis 16

Profit margins take a nosedive

When you are in competition, the price or your product/service is based on your
competitor s price instead of the price that corresponds to the value of the
experience the customer is getting from you.
Something to ponder... Market share gets smaller
The consumer mindset is If there are 1000 s of other people saying and offering the exact same product/
already “You get what service you are, supply exceeds demand and you re all fighting for the same
you pay for.” Don’t fight customer. This overcrowds the industry which leads
it! to price and feature wars.

Honor that thinking, give The slices of the market pie get thinner and thinner
them something worth and if you don t have enough money to out-spend
paying for.
the competition you ll go hungry.

Three factors that Value suffers

make up the customer Perceptually, the more choices for the same thing
experience the consumer has, the more they begin to de-value
the thing.
• Price
• Quality If the consumer does not have a DISTINCTIVE
• Service choice, then they default to What s the cheapest
price? because, to them, it s all the same anyway!
Increase them and
you immediately start Immediately this decreases the value of whatever
making your business you offer regardless whether it s really amazing or
stand out! n o t . Yo u c a n n o t f i g h t w h a t g o e s o n i n t h e
consumers mind. Period.

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DEATH OF COMPETITION :: Why competing is KILLING BUSINESS Stephan Stavrakis 17

Itʼs a rat race, not a business

When you compete you are no longer in a business that s fun, exciting, motivating
or inspiring. You are in a whole different kind of rat race disguised as a business.
How do you know if you are in a rat race?

Here are some clues...

•High return rates

•Your customers aren t getting what they expect
•You are working harder
•You are making less or the same
•Constantly trying to FIND customers
•Customers are comparing you to the other guy
•You are giving away the farm to make a sale
•Costs are increasing profit is decreasing
•Customer acquisition costs are high
•Trying to stay ahead by creating more and more
•You can t figure out why people aren t buying
•Seeing small ROI on your campaigns etc.

Then you need positioning.

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DEATH OF COMPETITION :: Why competing is KILLING BUSINESS Stephan Stavrakis 18

The Ultimate Positionist

Steve Jobs the owner of Apple computer Inc. is known as world renowned business
magnate, and inventor.

We think of him as the man behind Apple s differentiation position. The man builds
UNIQUE and different products and services with giddy enthusiasm.

I don t know this for fact, but I believe his prime directive is to build elegant
distinctions in Apple s products/services.

Elegant distinction Example 1:

Apple s service reps are called Geniuses . Not only is that name unique to
Apple s services, it s a genius name because it honors both the service rep and
the customer experience simultaneously.

Elegant distinction Example 2:

Macs can never be mistaken for another computer everything from the color, to the
shape to its simplicity. You know when you see a Mac, it s a Mac! iPod Nanos come
in PINK! Excuse me?? Pink? When was the last time you saw an MP3 player from
Sony in PINK??

Elegant distinction Example 3:

Steve Jobs requirement for elegant distinction in all his products and services
created the award winning, Hello, I m a Mac. And I m a PC ads which very clearly
show the world how Apple is different.
Just 3 examples of the many that proves that Steve jobs has positioning as his
main prime directive for business.. Let s see if it s profitable?

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DEATH OF COMPETITION :: Why competing is KILLING BUSINESS Stephan Stavrakis 19

Positioning = Profit

The main way to gauge the success of a company is to look at their stock
performance.

When Mr. Jobs returned to Apple in 1997 (Arrow 1), the stock skyrocketed from 20
dollars to 300 dollars in just 10 years. (As a side note, while Steve was away he
bought Pixar Inc. for 5million and later sold it to Disney for 7.4Billion)

Rarely do you ever find Apple products on sale NOT EVEN ON BLACK FRIDAY.
$300+ Increase
Apple sets prices, and the customer experience. Mr. Jobs makes sure that all
distribution channels are
customer experience
focused. Mr. Jobs Comes Back To Apple

The result is a controlled

Mr. Jobs Returns To Apple.
environment regardless of Around $20 share
what organization or
company is marketing their
products/services.

The graph on the right

proves that a controlled
non-competitive approach
increases profits for the
company period.

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DEATH OF COMPETITION :: Why competing is KILLING BUSINESS Stephan Stavrakis 20

Itʼs counter intuitive

Although companies are generally in business to create more income, the fear of
differentiating and carving a unique niche market is avoided because specialization
Do you feel that is seen as going after a market that isn t big enough and profitable enough to
by “competing” in maintain, let alone grow, a business.
the broad market
you give yourself The broader the market, the more the competition. The more competition, the more
the opportunity to commoditization. The more commoditization, the lesser quality and lower price. The
a bigger market lesser the quality, the worse the customer experience. The customer ends up
share? suffering and their trust and respect for your company plummets.

Unfortunately, the
exact opposite is Broader Market = Competition = Commoditization = Less Quality =
true... Bad Customer Experience

The simple solution?

Positioning completely bypasses the problem of commoditization and the
competitive mindset. Changing the focus from competition to positioning helps
the business owner focus on the customer rather than the bottom line or the
competition.

Positioning automatically provides more value to the customer because a proper

position can t be established unless the business owner is looking for an
unfulfilled hole in the marketplace, which demands a completely customer
focused approach rather than a what will make us more money approach.

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DEATH OF COMPETITION :: Why competing is KILLING BUSINESS Stephan Stavrakis 21

Is Perceptual Positioning™ the Death Of Competition?

By focusing on quality, the value to the consumer increases, thereby allowing the
price for the product/service to increase. This drives higher profit margins. This
allows the owner to make more money with less effort.

Based on this focus, businesses that make themselves unique become The Only
business that offers what they offer.

History shows us if a business becomes The Only that business creates an

unprecedented opportunity to increase profits by focusing on nothing but value
and quality for their market.

By being The Only , businesses can increase profit margins, lower costs, increase
quality and ultimately increase the level of trust and respect by the customer.
This, in turn, creates a LOYAL customer for the life of that business.

Although there are many methods to position your business to be The First in a
market. We believe that it s no longer good enough to be the first. The new solution
is to become The Only

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DEATH OF COMPETITION :: Why competing is KILLING BUSINESS Stephan Stavrakis 22

Seven Elements of becoming “The Only” Perceptual Positioning™

Perceptual Positioning bypasses the problem of commoditization and competition.
Perceptual positioning makes your company the Only one to do business with!
This is the way to create a win-win relationship with your customers.

Credibility Identity Value Image Familiarity Continuity Categorical

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DEATH OF COMPETITION :: Why competing is KILLING BUSINESS Stephan Stavrakis 23

1. Credibility
Creating a credibility perceptual position allows the business owner to create
credibility in the prospects mind so that the customers feel they ve made the right
decision.

For many years the credibility of safe & reliable vehicle is associated with Volvo.
Volvo spent millions of dollars creating the credibility position that their product
the safest vehicle on the road. This customer focus, made Volvo the worlds most
reliable vehicle in the mind of the consumer

The question the credibility position answers is:

What gives you the right to do what you are doing? .

2. Identity
When this perceptual position is established correctly, the customer feels like they
are a part of something bigger, something that goes beyond your product or
service.

A good example of identity perceptual positioning is Nike. Nike has create a zealot
like following by making people that wear their clothing feel like TOP athletes so
the Nike customer goes through a virtual identity change when they put on the
clothes.

The question the identity position answers is:

Who am I when I use this product/service?

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DEATH OF COMPETITION :: Why competing is KILLING BUSINESS Stephan Stavrakis 24

3. Value
The value perceptual position is about making something valuable the moment
the customer sees it, hears about it, or experiences it. You automatically have a
general idea of the value of a Ferrari, the moment you lay your eyes on it. There
are several factors at play to create a value perceptual position.

The question the value position answers is:

What is this product/service truly worth?

4. Categorical
The Categorical perceptual position is when you create a category in the target
market that makes you first to market with the particular product or service. This
perceptual position is your niche, and what makes you unique in the market place.

There are many elements to creating a new category. The last page of this paper
shows you how to get a complimentary video on how to create a categorical
position

The question the categorical position answers is:

What makes you unique in the market place?

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DEATH OF COMPETITION :: Why competing is KILLING BUSINESS Stephan Stavrakis 25

5. Image
When positioning your business, your target market usually already has a
preconceived notion about it. When your image doesn t match that preconceived
notion you are creating Psychological Incongruence . This is when you or your
message don t match what the customer expects.

Example - Mercedes is a Luxury Car. However, they also sell mid-market(low priced)
vehicles with the Mercedes brand name. This doesn t match what the customer
thinks about Mercedes and therefore creates psychological incongruence

The question the image position answers is:

Do you or your message match what the customer thinks?

6. Familiarity
This perceptual position is based on the fact that you or your business message is
being disbursed in as many exposure media as possible. Exposure mediums are
anywhere your message can be seen or exposed. Newspapers, email,
articles, podcasts, blogs, websites, radio, t.v. facebook, twitter etc. are
exposure mediums.

The question the familiarity position answers is:

Are you creating multimedia buzz?

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DEATH OF COMPETITION :: Why competing is KILLING BUSINESS Stephan Stavrakis 26

7. Continuity
This perceptual position is based on the idea that trust is built through
consistency. The continuity position is created by picking the mediums that
captures your market and exposes your message to them over and over, so that
the market knows they can rely on, and get comfortable with, the way you
communicate to them.

The question the continuity position answers is:

How often are you talking to your market?

Combine the 7 elements together, and you ll EARN trust and respect from your
marketplace which in turn gives you The Only position.

These are the seven elements of “Perceptual Positioning™”

Designed out of observation and assistance of 100 s of successful companies that
are The Only

Each area is a building block that builds on the last. When we build the entire
perceptual position your company becomes The Only company to do business
with. Period!

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DEATH OF COMPETITION :: Why competing is KILLING BUSINESS Stephan Stavrakis 27

Whoʼs Stephan Stavrakis?

Give Stephan Stavrakis 5 minutes and he will turn your business upside down while
bringing into focus lucrative opportunities missed by everyone in your market.

You'll be banging your head and wondering: "Why didn't I think of that?"

Stephan has worked with 1000 s of businesses owners and has logged over 13,000
hrs of one-on-one coaching and consulting, moving business owners from "me,too"
positions to being The Only business in their market, while exponentially
increasing their sales and bottom line.

Stephan has worked with many well-know best-selling authors, speakers and
trainers as well as high profile brick & mortar businesses. Stephan is a highly
sought after speaker for the insights and humor he brings to the stage. He is
consistently rated as thought provoking and practical by the business audiences he
addresses.

As Founder and CEO of 3D Thinking & Training Ltd, Stephan designed a straight
forward, practical approach to increasing sales and profits, called Perceptual
Positioning .

In a world where consumers actively resist marketing becoming

"The Only" is more important than ever.

He is a master practitioner in NLP, and was voted The World s

'Only' Perceptual Engineer and Positioning Strategist by his
piers.

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DEATH OF COMPETITION :: Why competing is KILLING BUSINESS Stephan Stavrakis 28

Now what? How do I use Perceptual Positioning™ in

my business?

As a way to introduce this new positioning method to the world,

I ve created a video that explains one way to do Categorical
Perceptual Positioning. The video has 2 parts.

Part 1: is a more detailed explanation of perceptual positioning

and how it will revolutionize the way business is being done.

Part 2: is for the business owner who would like an easy way to
create a new and distinctive market to dominate simply by
becoming The Only

This perceptual position that allows you to:

• Identify one or many profitable distinctive markets

• Start to become The Only even if it is the world s most
crowded market
• Create your own category that has no competition
• Make competition irrelevant...

Video
Click To See The Videos...

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