Why Snapdeal’s Competitor Focused Strategy Is Juvenile – Strategy with RS
Flipkart has launched a multimedia teaser campaign #achhaKiya. Obviously to indicate to online buyers that they should postpone their buying decision because another big sale is coming up!
They have extended this campaign to Out Of Home, where the text reads, ‘Nahin Khareeda. #AchhaKiya’.
Snapdeal, Flipkart competitors decided to ‘ambush’ Flipkart. It placed its message under Flipkart hoarding, ‘Accha Kiya Bata Diya’ with a #Yahan Se Khardo.
Media has labeled this as ‘Ambush’ marketing. It is not. Ambush marketing means surreptitiously apportioning another brand property & passing it off as their own. In this case, Snapdeal has not apportioned Flipkart’s brand property. It is seeking to be perceived as a ‘smart & agile’ brand. Ambush marketing is illegal & invites jail sentences. All global sporting events like Football World Cup, have very strict Ambush marketing clauses which are ruthlessly implemented!
I am totally against pursuing this juvenile strategy. Snapdeal should ask itself a fundamental question – what business is it in? To score over a competitor? Or to serve its customers better? If the later then why is it wasting its precious resource on being competitor focused? Great companies are customer not competitor focused. They will not allow competitor to dictate their strategy.
Only marketing guys feel good that they have blunted their competitors move. But have they?
By pursuing this strategy they have inadvertently got people more interested in knowing why is Flipkart asking them not to buy. More benefit is likely to accrue to Flipkart … exactly what Snapdeal would not want. Take yourself. After seeing Snapdeal hoarding campaign are you positively influenced to buy from them?
Snapdeal is a serial offender in pursuing this strategy. More so when it is running in losses. It is estimated that it could record a five-fold increase in losses going up to $250 million (Rs 1,500 crore) this fiscal (Source: 19th Feb’15, ET).
What are the contributors to the losses – people cost, advertisement cost & high cost of operations!
If you were Snapdeal CEO would green light this strategy?
In this series, Rajesh Srivastava, Business Strategist and Visiting Faculty at IIM Indore gives you a regular dose of strategy case studies to help you think and keep you one step ahead as a professional as compared to your peers. Rajesh is an alumnus of IIM Bangalore and IIT Kanpur and has over 2 decades of experience in the FMCG industry. All previous Strategy with RS posts can be found here