• businesses look for advantages over their competition
  • Some of these advantages are temporary, part of the continual back- and forth activity that occurs among competitors
  • i.e. Pepsi and Coke

Sustainable Competitive Advantages

o   Sustainable competitive advantages are methods by which a business holds on to its customers, in spite of the competition

o   Developing a unique selling proposition, lowering production costs, servicing a niche market, or creating customer loyalty can achieve a sustainable competitive advantage

o   Developing a unique selling proposition

§  A unique selling proposition (usb) is the one thing that a company’s product has that competing companies do not have and are not likely to develop

§  Marketers can determine if their business has a unique selling proposition by asking themselves: ‘why would my target customer buy from me instead of form my competitor?’

Lowering production costs

§  A manufacturer can have s sustainable competitive advantage by using cost- efficient, high- technology manufacturing systems and processes to reduce the costs associated with its products

§  From the time that a modern manufacturer senses the need for a new product to the time that those products leave the factory gate, the degree of automation and computerization can determine a company’s sustainable competitive advantage

Servicing a niche market

§  Where one company provides a product or service for a small market and, by so doing, keeps competitors to of that market

§  A sustainable competitive advantage can be achieved if a marketer recognizes an opportunity to create a niche market and takes advantage of that opportunity

o   Creating customer loyalty

§  Some customers insist on a particular brand of soap, ketchup, bagels or shoe, even if it is very difficult to find or if the customer must ravel to another city to buy

§  Customer loyalty is a sustainable competitive advantage because it defies regular competitive strategies

§  Customer loyalty is more like customer intimacy and is called relationship marketing

§  The consumer develops a strong relationship with the product or the retailer and will not consider another brand or another store, unless the favoured product or the retailer and will not consider another brand or another store, unless the favoured product or retailer makes a big mistake

Non- sustainable Competitive Advantages

o   Non- sustainable competitive advantages are these that can be used by competitors to shift sales in their direction

o   Non- sustainable advantages include promotion, placement, quality, benefits of use, price, and design features

o   Promotion

§  Companies that advertise their products want to place their brands in the minds of consumers

o   Placement

§  If a product has exclusive distribution in a market, it has a very competitive edge, because no other similar product has a placement there

o   Quality

§  A product can compete with other products in its category by being the best of its type

o   Benefits of use

§  It has been said that consumers don’t buy drills, they buy holes

§  In other words, the value is not in the product itself so much as in what that product will do for the person who buys it

§  A product that can do more or perform better than another product will have a competitive advantage

o   Price

§  All features being equal, price is only a competitive advantage to company if its product or serve is less expensive than a competitor’s product or service

§  If a consumer believes on product is equal to another, then the cheaper product has a competitive advantage, at least for a while

o   Design features

§  Every manufactured product is designed, whether it’s a toaster, a tire or a teacup

§  Design influences the way a product looks and what it does

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