Competitive Advertising: Definition, Examples & Analysis

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Lesson Transcript
Instructor: Ashley Johns

Ashley has taught college business courses and has a master's degree in management.

How do you let consumers know that your product is better than the competition? Show them! Competitive advertising is a bold statement that does that. This lesson explores the approach and its advantages and disadvantages.

What Is Competitive Advertising?

Competitive advertising is used by companies as a way to differentiate from competitors. This approach puts two brands side by side to show consumers the differences between the brands. Some companies name the competitor, while others use vague phrases like 'the leading competitor' and 'brand X.'

Examples of Competitive Advertising

You can find competitive advertising on television ads, print ads, social media and various other forms of advertising.

One example is the Apple vs. Microsoft campaign. Specifically, in 2006, Apple put out the 'I'm a Mac versus I'm a PC' campaign. The goal of the campaign was to show that Apple is cool while Microsoft is nerdy. PCs had become the norm in every household. This campaign was aimed at getting the next generation to think outside the box and enjoy what technology has to offer. The campaign released 60-plus ads and was successful in converting people to the Apple lifestyle.

Among the most popular rivalries of all time is that of Pepsi versus Coca-Cola. Almost everyone you talk to has a favorite. There are even people that choose the restaurant they want to eat at based upon which beverage brand is served. The two brands have positioned themselves differently in the marketplace. Pepsi aims to be the trendy brand, while Coca-Cola takes a more classic approach. However, there is a constant showing of taste tests and superiority claims within their advertising.

Competitive Advertising Advantages

Every approach comes with advantages and disadvantages. One advantage of competitive advertising is to demonstrate superiority. Competitive advertising is a good way to point out features and benefits of a product or service to show the customer that they are superior to the competition. For example, Microsoft chose to bash Apple in its commercials. Microsoft showed its smartphone interface Cortana versus Apple's Siri. The same questions are asked to each phone. Cortana is able to give logical, helpful responses, while Siri seems confused. This shows consumers that Microsoft has created a technology that is more useful.

Another advantage is empathy. Small companies are able to gain empathy from consumers through the use of competitive advertising. Consumers like to see small businesses taking on the task of overpowering a large business. However, this does not work when reversed. For example, say a small clothing company shows better quality and style than its big name competitor. This may intrigue consumers and boost sales. If the roles reverse and the big name competitor went after the small clothing store, consumers may see this as being a bully.

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