You have all heard that “Customer is King.” However, Once upon a time, in India, there was a company called Pal Automobiles which used to make Fiat cars (I think under license with Fiat). Later the same car was branded as Padmini. At one point of time, there were only three car brands in India – Padmini, Ambassador and Standard. Padmini used to sell at a huge premium. There was a waiting list of nearly 5-6 years. The Padmini brand was a premium brand.

Today, the company, the brand and the car does not exist anymore. Why? Well most of you will come up with numerous reasons for failure of Padmini car including old technology, customer dissatisfaction, ineffective marketing strategy, high price, ineffective top management and poor quality. But none of these are the reasons why the company and the brand failed. I am sure you are astonished and maybe perplexed. You must be thinking that you have listed out probably all the reasons why products fail and still not hit bull’s eye.

In order to explain to you the reason behind the failure of the company and brand, let me add a twist to this scenario by stating that I can bring Padmini car to its original glory, that is, you will have to wait for years to get the car as well as pay a premium for it. I will do this by not changing anything with respect to Padmini Car’s quality, price, production technique, positioning, advertising and strategy. I will not even visit the company’s offices or manufacturing facility. However, for me to achieve this, I will take just one action.

I know what you must be thinking. This guy is crazy. I hate to disappoint you but I think I am quite sane.

The one action that I will take to bring back Padmini car to its original glory is that I will remove all the competition that came later. After I have removed all the competitors who came later, you will have just three brands of cars to choose from, that is, Ambassador, Padmini and Standard. Just like before, with only three brands to choose from, don’t you think we will be back to a market situation where we will again start paying premium for a poor quality car? We, as customers, will have no choice. If we want to buy a car, we will have to choose from one of the three brands available.

I am sure you must be thinking, this guy is really crazy. How can we remove competition? You are right as well as wrong. You are wrong because I still claim that I am not crazy. You are right because I agree that we cannot remove competition. To bring out the importance of competition, I had no choice but to find an interesting way to get your attention and at the same time highlight the importance of competition to your business as well as for your success in your professional career.

Padmini car failed not because its customers one day decided that enough is enough and that we will not buy a poor quality car and pay premium for the same. At this time, customers were not the proverbial “Kings.” At that point of time, they were beggars. They had no choice but to buy any one of the three models offered by the manufacturers at that time. Customer was certainly not the “King,” Customers became more powerful once other car manufacturers like Maruti, Daewoo, Ford, General Motors, Hyundai entered the Indian car market and offered better options to the customer. Now with a host of new car models available, customers could truly exercise their power. After the competition gave more choices to the customer, customer truly became the “King.” He exercised his right to not to buy the Padmini car because better quality cars were now available. So you can see that it was the competition that brought about the failure of Padmini cars by making better choices available. Customer was not the “king” before the competition arrived. He became the “King” after the competition arrived and gave choices to the customer to exercise his power as a customer.

Same thing happened to Cielo car when it was introduced in India by Daewoo Motors. It was the first luxury premium car introduced in India and it was a success. If I remember right, Daewoo Motors was selling nearly 1000 cars a month. At this time there was no competition. However, as soon as Ford, General Motors and Honda introduced their models in the same segment as Cielo, Cielo also disappeared. Extending my crazy thought process to this example, that is, removing the competition that came after Cielo, would result in Cielo selling again in similar numbers and even more.

Competition is what makes the customer “king.” Competition is what makes your life as an entrepreneur and professional executive hell. But we do not give competition the importance it deserves while formulating our strategies.

It is surprising that most marketing books never talked about competition in the way that they should have. The marketing book that I had to go through while I did my MBA at the University of Illinois in 1987 did not even have a chapter on competition. At that time, I don’t think any marketing book had a chapter on competition. Now I believe Philip Kotler’s book on marketing has a chapter on competition.

I hope that you now believe that it is the competition that makes our life difficult and gives us sleepless nights. So when you are looking for solutions to your business problems, think of the competition.

Customer mathematician Avinash Narula is very passionate about the subject of customer satisfaction and retention []. He aims to continuously develop customer mathematics and economics to convert everyone in the business world into a BELIEVER in the concept of ” Customer is King

By yanam49

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