Competitors are definitely stakeholders

COMPETITORS ARE STAKEHOLDERS

 

There are four key reasons why competitors are stakeholders that any business must consider when analysing the marketing environment for a marketing plan.

• What one competitor--the most innovative or the strongest--does can affect the entire industry. This doesn't only apply to price wars (such as those in the UK grocery retailing industry). It's also a factor in the digital payments world, where Apple Pay has made a big impact in a short time. Or look at the smartwatch industry, which Apple is about to enter with a lot of promotional momentum. Having Apple as a competitor will force every business to be nimbler and better in order to survive.
• New or tiny competitors may be the most innovative. Ella's Kitchen, a 2014 winner of the new product award by The Grocer, is an example of a startup with a compelling value proposition: all-organic, tasty baby foods. The innovator attracted the eye of a larger company, which bought Ella's Kitchen and is using the brand to expand into new products and markets. Imagine what competitors think about the combination of Ella's Kitchen's innovative ideas and the financial strength of Hain Celestial. 
• Competitive scandals can hurt the entire industry. The horsemeat scandal of 2013 caused some consumers to switch from supermarket meats to local butchers' meats. Frozen hamburgers didn't sell well for a time, either, although price promotions helped increase demand. Not every company was implicated, but all were affected by changes in consumer confidence and perceptions.
• Competitive pressure can encourage the industry to do more for people and the planet. Just look at the Fairtrade movement, which has improved the lives of many farmers and food producers and encouraged sustainability. When Cadbury Dairy Milk committed to Fairtrade cocoa in a big way, that put pressure on other mainstream chocolate marketers to show their Fairtrade support. Mars, another chocolate giant, is now embracing Fairtrade cocoa for its Mars Bars. Fairtrade fruit and vegetable and coffee products are widely sold in mainstream grocery stores, partly because of competitive pressure and partly because of consumer demand. One competitor that gets a lot of media coverage for social responsibility activities can be the catalyst for others wanting to follow suit.

Among UK New Product Winners: Ella's Kitchen

The Grocer presents new product awards every year, for the best food and for non-food products introduced during the previous year. Entries for 2015 are now open. Categories include coffee and chocolate drinks, dairy drinks, fish products, frozen desserts, laundry products, infants' products, soups, and teas and infusions, among others.

Who were the winners in 2014? Both large and small marketers entered and won. Cadbury was a winner in the chocolate confectionery category; Persil won in the laundry category.

Among the smaller companies to win in 2014 was Ella's Kitchen (winner in the infants' category). Named after a real baby named Ella, the company markets a range of organic baby food.

Paul Lindley is the founder of Ella's Kitchen and also Ella's father. He had an idea for marketing nutritious, all-organic baby food products to delight 'tiny taste buds' and tempt even finicky babies to eat. He also knew he needed colourful packaging to 'sell from the shelf'. Once Sainsbury's began to stock his products, the company gained national distribution.

Lindley had worked for Nickelodeon before becoming an entrepreneur, and this connection enabled him to arrange for free TV promotion in exchange for some of the firm's profits. As a result, Ella's Kitchen gained brand recognition and established itself nationally.

When Ella's Kitchen undertook global expansion, however, Lindley experienced considerably more competitive pressure in the US market. He sold Ella's Kitchen to Hain Celestial, known for its all-natural food products, and remained as the division head, using the parent's marketing muscle to boost Ella's Kitchen.

Today, nearly a decade after its founding, Ella's Kitchen is active on social media to educate and inform parents about nutrition and, of course, explain how its products are good for baby. On YouTube, for instance, the company posts videos about feeding babies, weaning babies and other topics of interest to families with infants. It offers Q&A with experts on its Facebook page and its Twitter page.