It is a common misconception that Competitive Advantage means that you must be better than your competitors. In reality, Competitive Advantage means that you must be must be better attuned to your customers values than your competitors. What is the difference? Customers balance a combination of Marketing’s 4 P’s; Price, Product, Place and Promotion. Some marketers add a fifth P; People. One customer may value safety over all else and be willing to sacrifice features, convenience and price to have the safest product on the market. Another customer may require a reasonably safe product but demands the lowest price available. To have a competitive advantage, you must segment the customers and define your target customer. Then research that customer to determine exactly what combination of features, quality, convenience, etc. that your target customers value. Once this is defined, everything in the company should reflect that combination of values. Every product, process, customer service interaction and communication must reflect those values. Select your partners and distribution points in alignment to your chosen values. The final step is to create specific and targeted communication to your target customers.
Think about purchasers of your product or service. Not Your customer but all the customers of your product being service by you, by your competitors or not being serviced by anyone. In the simplest terms, all of these customers will be considering a combination of four factors: Price, Product, Place and Promotion. You and each of your competitors will have relative strengths in the combination of those factors. One a grid, write product, price, pace and promotion across the top. Down the side, list you and all of your competitors as well as list unsatisfied. In the grid, you can then rank how each of you are succeeding in each of the 4 P’s. Are you where you want to be? For example, if your unique selling proposition is mid-level price with superior quality and features at somewhat remote locations to keep the cost down, is that where you rank on the grid? On each feature, you should be, at least, where your unique selling proposition has placed you. Perhaps better. Then again, if your rank is better than planned, you may want to either reconsider your plan or adjust your marketing to return to plan For example, if your unique selling proposition is to be mid-priced and you are ranking as a low priced provider, your business may profit by raising prices.