Competitive advantage is a profit over competitors gained by offering customers great value, either through lower cost or by providing more benefits that justify their higher prices. To build beneficial relationship with target customers, marketers must understand the customers’ needs better than their competitors do and deliver more value to them. Furthermore, a company can position itself as providing superior value to its customers, it gains competitive advantage. But strong positions cannot be built on empty promises. If any company places its product as offering the best services and quality, it must then provide the promised quality and services to their customers. Thus, in fact, positioning initiates with differentiating the marketing plan of a company offer so that it will provide superior values to the consumers
Marketers should think through customers’ entire experience with the company’s good and services if they want to know about differentiation. A smart company always tries to find out various ways to differentiate itself from every customer’s point of view. Company can differentiate itself along the lines of goods, services, channels, people, or image and these details are given below;
Product Differentiation: takes place along products’ variety. At one side we find physical products that allow little variation like chicken, steel, aspirin and even some considerable differentiation is also possible here. For example Perdue states that it branded chickens are fresher, better, and more tender and they get 10 % price premium based on this differentiation. At the other side products can be highly differentiated, like automobiles, furniture, and clothing. Such goods can be differentiated on the bases of features, performance, or style and design.
Beyond Differentiation: a company can also be differentiated with the services that accompany the product. Several firms gain services differentiation through convenient, speedy, or careful delivery. For example, BankOne has opened full-services branches in supermarkets to offer location convenience along with weekday-evening hours and Saturday, Sunday,.
Installation: can also differentiate one company from another, as can repair services. Many automobiles consumer will willingly pay a little more and travel a little farther to buy a car from a dealer that provides top-quality renovate services.
Channel Differentiation: firms that follow the channel differentiation achieve competitive advantage through the means they design their channel’s expertise, coverage, and performance. Avon, Amazon.com, and Dell set themselves apart with their high-quality direct channels.
People Differentiation: companies can get a strong competitive advantage through people differentiation for hiring the qualified people and to train them as per their job description than their competitors do. Disney World people are known to be friendly and cheerful. Each employee is carefully trained to value customers and to make people happy.
Image Differentiation: Yet, when competing offers show the same, buyers may perceive a difference which is based on company’s business or brand image differentiation. A brand image should convey the distinctive benefits and positioning of a product. To develop a strong and distinctive image calls for creativity and hard work.
These are the competitive advantages for positioning any product and services of a company. With this differentiation, a company can get more benefits and more consumers. Product and services offering by any company should be different from their competitors. So marketers should work hard to figure out current market situation and competitors’ position as well.