Competitive advantage An advantage over competitors gained by offering greater customer value, either through lower prices or by providing more benefits that justify higher prices. But solid positions cannot be built on empty promises. If a company positions its product as offering the best quality and service, it must actually differentiate the product so that it delivers the promised quality and service. Companies must do much more than simply shout out their positions in ad slogans and taglines. They must first live the slogan. For example, when Staples set out to differentiate itself on the basis of an easier shopping experience, it worked for a year to remodel its stores, retrain employees, and simplify customer communications. Only when everything was in place did it begin its advertising campaign with the tagline, “Staples: that was easy.” 20 To find points of differentiation, marketers must think through the customer’s entire experience with the company’s product or service. An alert company can find ways to differentiate itself at every customer contact point. In what specific ways can a company differentiate itself or its market offer? It can differentiate along the lines of product , services , channels , people , or image.
Through product differentiation brands can be differentiated on features, performance, or style and design. For example, Maple Leaf Foods claims that its Maple Leaf Prime Naturally– branded chicken is fresher and more tender—and gets a price premium based on this differentiation. Whirlpool promotes its dishwashers on performance—they run more quietly— and Bose positions its speakers on their striking design characteristics. Similarly, companies can differentiate their products on attributes such as consistency, durability, reliability, or repairability. Beyond differentiating its physical product, a firm can differentiate the services that accompany the product. Some companies gain services differentiation through speedy, convenient, or careful delivery. For example, TD Canada Trust positions itself as the bank that makes banking “comfortable,” and differentiates itself by offering services other banks don’t, such as branches that are open on Sundays. Others differentiate their service based on high-quality customer care. Lexus makes fine cars but is perhaps even better known for the quality service that creates outstanding ownership experiences for Lexus owners. Firms that practise channel differentiation gain competitive advantage through the way they design their channel’s coverage, expertise, and performance. Caterpillar’s success in the heavy equipment industry is based on its superior marketing channels starring local Caterpillar dealers. Online marketers such as Amazon and Dell similarly distinguish themselves by their high-quality direct channels.
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