Competitive Advantages Section 3.2 By: Jennie Nguyen

Competitive advantages Businesses look for and need to have competitive advantages over their competition A true competitive advantage is one that is sustainable over the long term (it has to last, it has to be able to keep the company going)

Sustainable VS. Non- sustainable Sustainable Unique selling position Lowering production costs Servicing a niche market Creating customer loyalty Non-Sustainable Promotion Placement Quality Price Benefits of use Design features

Sustainable Developing a unique selling proposition (USP) - Something that your product has, that other companies do not have, and are not likely to develop. - Example: patents, licenses, supplier(s) will only sell to you Domino’s Pizza: “you get hot fresh pizza delivered to your door in 30 minutes or less – or it’s free.” - Pioneer of this concept - Is it sustainable? (how can companies create this ?)

Sustainable, continued Lowering production costs - More cost-efficient, high technology systems, and processes set in place to reduce price - Example: Many companies are outsourcing work to other countries, why? mlHTTP:// ml (how else can companies lower production costs?) Outsource: companies are going to get rid of it, (sell it to another company) (contract)

Sustainable continued Servicing a niche market - Providing something for a small market, and by doing so, keeping competitors out of the market. Why does this work? Does it always last? - Example: many high-tech companies provide specialized software for companies - Example: Software tailored to their individual needs (billing software for dentists, do it yourself tax returns for free)

Sustainable Continued Creating customer loyalty - Relationship marketing, where as the consumer develops a strong relationship with the product or retailer and will NOT consider buying from someone else, unless their chosen one makes a MISTAKE!! -Example: What is your favourite kind of ketchup? &task=view&id=2055http:// &task=view&id= Example: What is your favourite kind of facial tissue?

Non-Sustainable Promotion - place brand in the mind of the customer - “top of mind” - Roll up the Rim - Began in 1986, to help increase coffee sales - Many Canadians look forward to it each year

Non-Sustainable Continued Placement –Products must be placed in an area where customers can buy them – Considering the number of products made in other countries, competition can appear at any time –IF a product had exclusive distribution in an area, or location, it has a very competitive advantage because no other similar products will be found there – Example: Fleetwood Park’s Sold Coca-Cola until recently

Non-Sustainable Continued Quality –Something can compete with another product/service in its category if it’s the best of its type –Businesses try to do this everyday Stronger, Faster, lighter, easier to use, all NEW -Finest quality products can be hard to find

Non-Sustainable Continued Benefits of use – value is not in the product itself, but what the product can do for you If a product can do more or perform better than another, it will have a competitive advantage Example: Laptops double as DVD players on plane rides How is this advantageous to consumers? Example: Once car manufacture offers “Better Safety” while another offers “Better Service”

Non-Sustainable Continued Price –Price is only a competitive advantage for you if you are cheaper than the competition – Some stores run “Store sales only”. –Some manufacturers or franchises run “product line sales” –All retailers/franchises must adhere to the sales Example” Nike running a sale on all running shoes – all retailers must follow (may have some restrictions) Example: Subway running “sub of the day” promotions – all subways must follow

Non-Sustainable Continued Design features (product appeal) –Design influences the way we perceive a product and what it does – Example: Companies design cars to perform similar but they all have a very distinct look –Often consumers will want one product over another based on the style of the product –PACKAGE design also falls into this category