Monday, October 21, 2013

Marketing 101: Choosing the Right Competitive Advantages

Previously I explored the concept of Market Differentiation which involves Product Positioning through a Value Proposition.  Recall that a Value Proposition is not a "mystical" marketing term, but in fact is an essential marketing principle.  A Value Proposition consists of two parts: a differentiated value, and a position.  The differentiated value refers to the ways our products and services stand out from the competition inside a chosen market segment.  The Value Proposition helps us develop a Differentiation Strategy which effectively focuses and communicates our intended position to the selected target market, and gives us sources of competitive advantages.

Evaluating Brand Differences
The truth is some differentiators are not meaningful or worthwhile to consumers - they won't "speak" to them in your messaging.  The other often overlooked reality is that each differentiator used in your marketing strategy creates costs for the company (your marketing budget), as well as benefits for the consumer.  Therefore each differentiator we choose must be evaluated according to the following criteria:

1) Importance: Does the difference deliver a highily valued benefit to the target customer?
2) Distinctiveness: Do your competitors also offer the difference? Can you offer it to customers in a more distintive and meaningful way?
3) Superiority: Is the difference superior to other ways that customers can obtain the same "benefit"?
4) Communicable: Can the difference be easily communicated and also visible to consumers?
5) Preemptive: Is it difficult for your competitors to copy the difference?
6) Affordable: Can consumers afford to pay for the difference?
7) Profitable: Are you able to introduce the difference profitably?

The ideal differentiators are the ones that meet all 7 of the above criteria fairly well.  If you are entering a target segment that has very little competition, this is entirely possible.  However if there are already a few well established products in the segment, then you will need to position yourself via multiple differentiators, and your differentiators may have a more difficult time being truly distinctive, preemptive, and important.


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