What Are Your Competitors Telling You? A Case Study: SAP's New Advertising Campaign

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You need to pay close attention to your competitors' marketing campaigns, and not just to stay on top of their positioning strategies. Detecting a change signals the need to thoroughly re-evaluate the competitor and to consider how that change may affect you. Such a change could indicate a management change at your competitor, a new company strategy, a change in target market, pressure from other competitors, or other factors. I'll use SAP's new marketing campaign as a case study of what a change can mean and how to discover its meaning, whether you're a competitor, a prospective buyer, or a business-to-business (B2B) marketing professional.

Your business-to-business (B2B) software competitors, like most companies, will go to almost any lengths to guard their marketing communications strategies. But sooner or later they've got to go public. They run ads, revamp their web sites, and change their presentations and sales pitches. They're giving you a signal. Are you tuned in to receive it?

It's critical that you stay on top of your competitors' marketing communication for two reasons. First and foremost, this is the only way you can determine how they are positioning their company and its products, and whether your own positioning strategy is unique. Also of critical importance is the fact that a new marketing message is a signal that something might be changing in your competitor's camp, and that you need to do some investigative work.

What Is SAP Telling Its Competitors?

SAP's massive new marketing campaign in the US (not rest of world)—as you may have seen in the print and television ads—claims that companies that "run SAP are 32% more profitable than those that don't." Of course, there's a qualifier. A tiny footnote in the ads, which run in major business and information technology (IT) publications, says that the claim is based on an "analysis of publicly available fiscal results of all non-financial companies listed on NASDAQ and NYSE." As you can see, it's important for competitors and buyers to read footnotes, disclaimers, or any other qualifiers.

Prior to this current campaign, SAP's primary message to the market was that the leader in enterprise resource planning (ERP) software could meet the needs of any size company, from very big to very small, and every size in between. SAP spent about a year, and heaven knows how much money, on a well-executed ad campaign that was based on the claim that SAP software is designed to meet the needs of every industry and every size of company. That's why SAP makes more than one kind of software, the ads proclaimed, "We have an SAP solution for you and it's grounded in our years of working with the best-run businesses in your industry. Because we know business fundamentals. And we know what makes your business fundamentally different. And so does our software"

Look beyond SAP's Marketing

Today, a vestige of that claim is tucked into the current ad copy, which mentions "businesses of all sizes." Could it be that business and IT people familiar with SAP found it hard to believe the claim? After all, the word on the street is that SAP software—used by many of the largest companies in the world—is extremely complex, difficult to install, and very, very expensive (note, however, that SAP's brand tracking study indicated that this image is changing). Hmmm. What does it mean to you when a company like SAP tries to expand its market and change its message to the market?

To find out, you may have to look beyond SAP's marketing communications. For instance, you might notice some interesting developments in the way SAP sells its products. Over the last two years, SAP has been recruiting value-added resellers (VAR) for its new small and midsize enterprise products, Business One and mySAP Business Suite. Thus, the marketing message strategy was obviously in support of this effort. Then, just before SAP unleashed its new profitability campaign, an article in the October 31 issue of CRN magazine, the largest publication targeted at the solution provider community, reported that several SAP VARs were dropping Business One. Again, paying attention pays dividends. This meant it was time to dig more to see if something was changing at SAP.

A Little Investigative Work Goes a Long Way

SAP's new campaign made me wonder if the company might be de-emphasizing its mid-market strategy. Did SAP find it too difficult to overcome the market's perception of the giant international company? Or perhaps SAP discovered that the appeal to small and medium businesses was hurting what is, I am sure, a very profitable enterprise business.

A quick visit to the SAP web site tells you that SAP is definitely not giving up on the pitch that it has solutions for any size business. In fact, the SAP web site is set up to encourage small and medium-sized businesses to dig deeper and find out how SAP can help them. The SAP web site may be too cleverly crafted, however, because it doesn't do a good job of telling this new audience that it now has several new products; the informed buyer might quickly get turned off and leave the site.

So, what is going on at SAP? As outsiders, we cannot be certain, perhaps nothing is going on, but my guess is that once SAP had some compelling numbers to weave into a claim, it decided to apply them across the board—to enterprise, mid-market, and small businesses. Indeed, SAP's TV and Internet ads claim that any size of business can get a big payback by implementing an SAP solution. And, after all, who reads the footnotes and qualifiers?

SAP's Gift to Its Competitors

Well, if you do read the footnotes, you'll see that the new message to the market is actually not all-inclusive. In reality, it's exclusionary since it's based on facts that apply only to non-financial public companies on the New York Stock Exchange (NYSE) and the NASDAQ. If this gap is not immediately obvious to most buyers, no doubt SAP's competitors (Microsoft Business Solutions, Sage, and Oracle) will bring it to their attention, and use it against SAP. If your company markets software to financial businesses or other organizations that fall outside the scope of SAP's claim, you may have been handed an opportunity. While I think this to be true, SAP's research found that companies not listed on the NYSE and NASDAQ still related to the message.

Given this, it's obvious to me that SAP is still casting a very wide net, so I'm sure that SAP is not changing its mid-market strategy. It must be up to something else, but what? Sadly, I don't know for sure. But if I were a competitor or a buyer, I'd want to gather all the evidence I could to form an educated opinion. Then, I'd pay close attention to what develops. As I said, sooner or later, marketing position and message strategies have to go public.

What a New Marketing Campaign Is Telling You

SAP's campaign is a classic example of why it's important to pay close attention to your competitors' marketing campaigns all the time, not only when you're going through a positioning process. When a competitor's message to the market changes, you should immediately start investigating the reasons behind the change because you might gain valuable competitive intelligence. The following are general examples of what you might discover.

  • New management wants to assert itself.
  • A new strategy is evolving.
  • The company is targeting a new market.
  • The old marketing message was not working.
  • Competitive pressures are taking their toll.
  • The VARs are getting restless.
  • New sales tactics are being implemented.
  • New research provided new marketing ammunition.


Even after you have determined how your competitors are positioned, you need to remain vigilant. Continue to monitor their marketing campaigns, web site content, and press releases on a regular basis. If you detect a change, it signals the need to thoroughly re-evaluate the competitor and to determine how the change affects your marketing and sales. It could be a clue that will help you to compete more effectively and to stay one step ahead of the competition.

About the Author

Lawson Abinanti is co-founder of Messages that Matter, a consulting firm that helps B2B software companies create compelling message strategies that build awareness and demand. Messages that Matter (http://www.messagesthatmatter.com) gives clients the knowledge and tools they need to develop powerful message strategies that differentiate their products and services from those of the competition. Lawson has held strategic marketing positions with several B2B software companies including Navision, Applix, TM1 Software, and Timeline. He is a journalist by trade, and has more than fifteen years of executive management experience in the software industry. Lawson can be reached at labinan@attglobal.net or at (1) (425) 688-0104.

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