How we change what others think, feel, believe and do
There are often a number of different types of company or people playing in any marketplace.
Of course the most important organization or people in the market are your customers. This includes both current and potential customers.
It is very common for most sales to be made to a relatively small set of big customers. These always need careful attention and may have account/relationship managers assigned to them. A problem is that big customers may also demand big discounts and special attention.
Minor customers buy less, but nevertheless are useful as in aggregate they may buy quite a lot. The only time minor customers are undesirable is when serving them costs more than the profit gained from them. This can happen when they are angered or when they try to gain an unfair attention for their smaller payment.
Suppliers may sell directly into the market, for example selling spare parts, but largely they need to be kept aligned to your strategy.
In some markets suppliers also supply your competitors. When supply is short, the supplier may hold a position of power in the choice of who to serve.
You can also have major and minor suppliers. Major suppliers are critical for everyday delivery and a problem from them can cause delays or product quality issues.
Complementors are those who sell non-competing products and which generally help your sales. For example in a rock musical instrument market, drum and guitar manufacturers are complementors to one another.
It is generally a good idea to collaborate closely with complementors as mutual benefit may be gained. They may also seek to work with competitors, which can be a tricky situation -- but if it all adds up to expanding the market, then this is beneficial. An alternative strategy, as with suppliers, is that if you can lead the complementors to support you more, then competitors may be weakened.
Competitors are those who have products and services similar to you and where customers who are buying something will compare your offerings and prices directly, weighing one up against the other.
The interaction with competitors is usually directly antagonistic. You seek to convince customers that your offerings are better and that competitors' offerings are worse. Nevertheless, there are times when collaborating with competitors is helpful, for example in influencing sensible regulations.
Substitutors are like competitors but their products are not the same. The classic substitution is replacing butter with margarine (a battle that is still raging). Other substitutions are more evolutionary, for example where typewriters were substituted by wordprocessors.
Initially, substitutions may be seen as quite different, for example where computers were big and expensive alternatives to the typewriter. Yet innovation and evolution continued and computers eventually became cheaper than typewriters as well as offering benefits the typewriter could not emulate.
A critical attribute of a substitutor group is that they all seek the same 'share of wallet'. Hence, when a person is thirsty, all drinks are substitutes for one another.
In any industry, standards are often helpful in many ways, from ensuring product safety to helping suppliers create plug-compatible parts that enable economies of scale and hence lower product prices.
Regulation may be driven by collaboration between competitors. Regulations may also be created by independent organizations or even governments, whose agendas may not align with company profit motives.
An important part of regulation is policing, without which regulations become only guidelines. Sometimes customers do their own policing, for example by not buying non-standard products. Regulation may also be done by independent inspectors who can have draconian punitive powers.
It can be an important part of marketing to demonstrate conformance to regulations. Displaying safety badges, showing ecological awards, and so on can help convince customers of the quality of the product and the integrity of the firm.
There are also groups and organizations who have no direct control but who will seek to promote their own agendas by influencing players within the marketplace, including regulators and retailers. These often have an ethical basis, for example ecological or animal rights activists.
Lobby groups who represent certain business interests may also be involved, although often indirectly (for example in seeking to persuade regulators to create stronger controls).
Marketers need to be careful with influencers who can create bad publicity through demonstrations and leaking information to the press. Influencers can be helpful if you listen to them and take their concerns seriously.