Posted in Marketing and Strategy Terms, Total Reads: 414
Definition: Direct Competition
Direct competition, also known as category or brand competition, refers to the scenario where products performing the same function compete against each other. In other words, two or more virtually identical goods or services are offered in the same target market for the same customer base by different companies.
At all times, it is important for a company to keep a tab on the relative pricing and significant technological innovations of direct competitors in order to avoid competitive disadvantage and maintain its market share.
Because the product is very similar, like in the case of Pepsi and Coca-Cola, the brands need to create slight differentiation on parameters like price points, locations, service levels and product features. They should keep track of the positioning of their direct competitors in order to find the best strategic business solutions.