Competition Concept, Part 2
No duh: if a consumer isn’t satisfied you aren’t going to sell them very much, or for very long. Let’s put aside the obvious about the marketing concept and just focus on one thing. I’ll make my point, and we’ll see what y’all think. My point is this: I believe that if we truly outwit and outplay our competition, we will by default attract the consumer. If we think we are beating our competition and the sales just don’t come in, then there is something, somewhere in our strategy that isn’t working right. Usually, it’s not too difficult to diagnose.
Recently, I was asked what I thought about two warring companies in the Mexican restaurant industry here in Utah, Café Rio and Costa Vida. Here’s my opinion on it; I think it really illustrates well what I mean about the competition concept.
Now, if you’ve ever lived in Utah long, you would have heard about Café Rio. It’s a fabulous place where you move through a line and all along the way there are chefs asking what you want in your meal. They make everything to order from scratch and the food’s great. Costa Vida is the challenger company, doing almost the same thing in the same state, but they are fighting strong to stay alive. It’s hard. Café Rio always has a line that wraps around their restaurant with customers, it’s so popular. They not only have a good market leading position, they practically are the market.
So what do you do if you’re Costa Vida? Nine times out of ten, folks will try the marketing concept. They want to make the consumer happy. So what makes the consumer happy, they ask? “Ah, well, we just have to find the right target market, and then get them to come. College students! Yes, we’ll get college students to come and spend $10 a plate because so many of them date! That’s the answer! What else? Oh, well, we’ll do promotions, coupons, contests, yeah, that’s what college students want!”
That’s the consumer concept in action. Well, that’s exactly what Costa Vida has tried, and continues to try, to do. And it’s not working. Because, sneaking up on their doorstep comes in Bajio Grill.
Bajio Grill knows the competition concept. And they are using it so effectively, I am putting money down that Costa Vida is gonna get rocked by them as they creep out of the shadows and come in for the kill. What Bajio Grill is thinking, and Costa Vida would think if they used the competition concept is this:
“What is Café Rio doing so well? Well, they effectively get viral marketing going through intense customer loyalty. They appeal to the married market where married couples are much more likely to spend a date night at a $10/plate joint than college students. They advertise traditionally, but in pulsing campaigns. And they have incentives that bring people back for discounts and such. They also place their restaurants all over the place, even if they don’t know how profitable one will be. They use their locations as advertising! We are going to everything like that, but better. We will put so many Bajio Grill restaurants around and advertise in pulsing campaigns that when people aren’t hearing about Cafe Rio, they’ll hear about us.”
Bajio is out-doing Costa Vida in every way if you ask me. The consumer concept is not going to save Costa Vida. Why? Because Café Rio is blocking the distance to the goal line perfectly. It would be like playing football with 11 guys and the opposing team has something like 30. Good night.
Costa Vida ought not to try to compete on price. It’s all too easy for Café Rio to drop prices if this strategy really does become a threat. And they shouldn’t try to compete on quality. Everyone is already convinced that Cafe Rio is better. No, they need to compete on something that is an exploitation of a weakness inherent in the strength of the leader.
Café Rio has too many people there, period. Yes, I love their food, but I avoid the place because on a Friday night, you’ll see a line that will last a half hour before you get to order. That’s how obsessed people are about their food. Costa Vida should exploit that. It’s not like Café Rio is about to kick people out the line if it works. Imagine Costa Vida’s campaign that says, “Now serving elbow room” or, “We got booths with leg room.” If they can effectively advertise that, they will see customers who come in after seeing the line at Café Rio from their car windows and thought, “You know, Costa Vida has more room. Let’s give that a try.”
Then, when Costa Vida gets the customer through the door, the consumer concept can begin. But the fight will be decided quickly by the leader if no one challenges them.
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