When I write articles about Marketing or corporate strategy, it’s because I have first-hand experiences of how people struggle to understand strategic marketing or strategic management concepts largely because the illustrations are usually drawn from the international market.
Digital Media has also revolutionized the way brands react to opportunities in the marketplace by making them more agile and responsive to trending issues. It also serves the purpose of bringing concepts to live with speed to catch a “captive audience” that practically sleeps online. It’s therefore awash with case studies!
As a result, company executives must be more open-minded and consistently think on their feet. My professional experiences also indicate that it’s always a good idea to have a marketing communications agency or even an ala carte (specialist) digital agency on retainer to manage a brand’s digital strategy. These agencies are usually filled with young “online-natives” who are quick to pick contemporary trends and present ideas for discussion. This requires Marketing Executives to be more open-minded and responsive to new ideas, even if the ideas challenge the status quo or comfort zones.
This brings me to today’s topic on Porter’s Competitive Marketing Strategies using illustrations largely from Ghana’s Radio industry and Telecom industries where digital marketing is even making the “battle” even more interesting.
Apart from Porter’s Generic Competitive Strategies of differentiation, cost leadership and Niching, Porter argues that firms can deploy various competitor strategies based on their market share and position. Theoretically, players in the industry are classified as Market Leaders, Challengers, Followers and Nichers with 40%, 30%, 20% and 10% market shares respectively even though in reality the market shares may be fundamentally different, but the industry will have clear recognition of who the market leaders and challengers are.
Practically, some of the strategies may not necessarily be applicable within a particular context and may also not be the exclusive preserve of players with certain market shares.
Position-based competitor strategies evolved from military strategy and some of the competitor strategies that will be discussed include; Frontal attack, flank defense, encirclement attack and bypass attack.
The focus of a flank defense or attack is for the company to protect its flanks (weakness) or attack a competitor’s flanks. Within the radio broadcast industry, the Multimedia Group has been able to deploy a flank defense and an encirclement attack effectively. The liberalization of the airwaves by the National Communications Authority in 1994 resulted in the proliferation of various privately-owned frequency-modulated radio stations in the country. What can be termed the mad dash to “tune in” started in 1995 with the introduction of Joy Fm and subsequently Radio Gold.
The FM stations broadcasted only in English and were deemed to be only for the educated Ghanaian. The non-English speaking Ghanaian felt alienated as all the programmes including the news broadcasts were in the English medium.
Peace Fm blazed the trail in 1999, when it was established as an Akan-speaking radio station. It generated euphoria amongst the Akan Speaking segment of Accra’s population and made it the most widely tuned-in radio station. The educated Ghanaian who hitherto was perceived as averse to local language programming also started tuning-in and thus Peace Fm started chirping at the market share of Joy Fm and Radio Gold. The success of Peace FM transformed the broadcasting style of the radio stations and opened the floodgates for other stations to broadcast in the local language. As various local content radio stations sprung up, it became relatively difficult for the likes of Joy Fm to increase their market share.
Joy Fm was faced with a dilemma as to how to compete head-on with Peace Fm. Joy Fm couldn’t introduce local content as that will tend to distort its brand positioning and lead to confused positioning and brand dilution. The Multimedia Group strategically acquired Adom Fm (a local content radio station) and used it to pursue two basic competitor strategies; Frontal attack and Flank defense.
The acquisition of Adom Fm offered Mulitmedia Group the luxury of competing head-on with Peace Fm (Frontal Attack) without any effect on the group’s premier brand (Joy Fm) since Adom Fm operated as a distinct brand independent of Joy Fm.
The second was a flank defense as it enabled Joy Fm to defend its weakness of not being able to compete directly for the huge local language market. It also prevented these local language broadcasters from chirping away its market share and revenue.
Finally, the Multimedia group launched an encirclement attack by launching various brands into the radio broadcasting market to cater for various segments of the market. For example, they launched Hitz fm for the music loving youth and Asempa Fm for Sports loving fans. These Multimedia brands helped them to compete more effectively with the likes of Happy Fm; a sports-oriented station.
A bypass strategy involves using superior technology to leapfrog a competitor or serving markets that competitors are currently not serving. A classic example within the Ghanaian corporate environment is the “analogue-digital” saga in the telecommunications industry. Mobitel (now AirtelTigo) was the innovator in the mobile telecommunications market but it entered the market with analogue technology. At the time, it enjoyed a first mover advantage with Ghanaians using the brand name “Mobitel” as the generic name for mobile phones. However, the limitation of analogue technology was that the telephone line was embedded with the phone and consumers did not have the option of swapping their phones easily.
Spacefon (now MTN) entered the market with digital technology by providing sim cards embedded with telephone numbers. The sim card therefore made it possible for consumers to swap phones easily by just removing and inserting the chips in any phone of their choice. That technology and other factors drove MTN to overtake Mobitel as the market leader; a position it has defended tenaciously for many years.
The Telecom industry has been very exciting with brands very adept at deploying flank offense/attack to go at each other’s weaknesses. Several years ago, MTN launched “GAVET” as a massive flank attack where it used a fictional (GAVET) character to represent a key weakness (limited coverage) of the various competitors and simultaneously promoted its key strength (massive nationwide coverage) using the positioning statement; “everywhere you go”
Over the past few months, MTN has experienced two main issues; data billing errors which made its data cost exorbitant and more recently, a massive disruption in services linked to underwater fiber cut.
In these instances players in the industry, especially Vodafone have been very adept and agile at deploying flank attacks by going at these weaknesses using very creative messages on social media. Despite the fact these may be fleeting periods of weakness, Vodafone has exploited it to full effect to promote its “2 moorch data“using very exciting creatives. During MTN’s billing error, its data costs went through the roof and Vodafone and Airtel Tigo focused strongly on communicating their data charges as relatively cheaper.
During MTN’s recent fiber cut challenges, Vodafone’s communication was focused on asking users to bundle “2 moorch data” and share “hotspot” to help friends who are struggling with their network.
To quote a friend on social media; “the battle lines have been drawn” and competitors dare not flounder in future.
Ghana’s corporate industry is awash with various examples and it’s time for academia to focus on using more local case studies to illustrate concepts in order to make them more relatable.
This article was written from personal observations from afar and may not necessarily reflect the strategic intent of companies used in the illustration. It’s also not meant to be an exhaustive topic on the subject and interested readers should complement their reading with relevant books and journal articles.
Nana Yaw Kesse
Nana Yaw Kesse is a blogger who specializes in using illustrations from Ghana’s corporate and socio-political environment to explain marketing and corporate strategy.
He holds an MBA in Marketing and is a qualified member of the Chartered Institute of Marketing (U.K) and a full member of the Chartered Institute of Marketing Ghana (CIMG) with two decades of practical marketing experience. He is the former Head of Marketing & Communications at Capital Bank and previously a lecturer with the Chartered Institute of Marketing Ghana. He currently works as Communications Manager at GCB Bank.