Competitive advantages in relation to. Benefits for the transport company
However, when making any changes, it is necessary to adhere to one of the main principles of marketing: first of all, when creating or changing a product, it is necessary to take into account the desires and interests of the consumer.
This principle is the first step towards a successful and prosperous business. But one attitude to consumers is not enough, it is necessary to create a certain competitive advantage that will allow you to overtake competitors in the chosen niche.
Creating an advantage
The concept of "competitive advantage" means an exclusively positive difference between a product and the products of competitive organizations. It is this advantage that is the factor by which the consumer chooses this product, and not the product of competing companies. A competitive advantage can be, for example, the quality of a product or service.
When creating a competitive advantage, it is important to adhere to two main principles:
- This advantage should be really important for the consumer;
- The consumer must see and feel the competitive advantage.
Despite such a great efficiency in creating a competitive advantage, it must be remembered that competitors will still determine this advantage over time and apply it to their products.
However, as practice shows, this time is quite enough to recoup the costs, get significant profits and overtake direct competitors.
Creating a competitive advantage should not take huge company budgets, so it is necessary to use a certain methodology that allows not only creating a competitive advantage, but also significantly reducing the costs of this process.
In this methodology, four main stages can be distinguished, each of which is an integral part of the entire process of creating a product advantage:
- Segmentation;
- Specialization;
- Differentiation;
- Concentration.
Segmentation
In this case, the concept of a segment hides end consumers who are looking for one or another type of product with certain parameters. In other words, each consumer has certain needs and interests, based on which he chooses the necessary products. Thus, all consumers can be divided into groups of requests.
When carrying out (individuals), gender, age characteristics, place of residence, vehicle availability, etc. are often chosen as parameters of the segmentation process.
In addition, sometimes more detailed consumer data is used, that is, targeting is carried out. On the other hand, consumers can be organizations to which products are supplied. In this case, segmentation is carried out according to the organization's belonging to a certain type: store, dealer, manufacturer, etc.
One of the main segmentation parameters in this case is the size of the company, knowing which, you can easily determine the total amount of products passing through the organization.
After determining the signs of segmentation and identifying the future competitive advantage, it is necessary to apply the usual marketing tools to promote the product: product advertising, direct product introduction in the company, sending letters asking to purchase the product, and other methods.
Of course, all of these methods have a big problem A: There is no guarantee that the company will decide to purchase the product. In this regard, there is a more practical way - the implementation of consumer segmentation based on the problems present in this area.
Surely, in every business there is a bottleneck that arises from the fact that consumers cannot find what they need. For example, customers of a butcher's shop want a certain type of meat to cost not 300 rubles, but 250.
Or that the delivery of pizza home was carried out not in one hour, but in 30 minutes. Thus, segmentation is carried out according to unsatisfied consumer needs.
It is quite easy to evaluate such requests, for example, by the usual survey of potential consumers. Polls have always given the most effective result. After analyzing the results of the survey, the most acute problem is selected and a competitive advantage is built on its basis. Thus, the promoted products will be associated with the target audience precisely with this competitive advantage.
Specialization
Identifying problems in a particular market segment is only half the trouble. It is necessary to decide on one problem that needs to be eliminated and made into an advantage. However, this is not as easy as it seems. The choice of a specific problem for its further solution depends on a number of factors, which include money, availability certain conditions, staff, time.
In particular, time, money and personnel are the determining criteria in choosing a particular problem. After all, with a large budget, an unlimited amount of time and specialized personnel, any problems can be solved. Therefore, before choosing, it is necessary to correctly assess the available resources.
An equally important step is to assess the importance of this problem. The relevance and severity of a particular problem determine the success of the competitive advantage. Don't pick a problem that other organizations can easily fix. And, of course, we should not forget about the eternal problems that exist in every market segment.
It's about price, staff and range. Each consumer always wants the purchased products to be of the highest quality and cheapest in a huge assortment, and the service personnel do everything to ensure that he is satisfied and arrives in a good mood.
These problems cannot be completely and forever eradicated, since nothing is perfect. But you can reduce the severity of the problem by increasing the quality, reducing the cost of products, expanding the range and recruiting qualified personnel.
Evaluating all the above factors and criteria, you need to choose the most appropriate problem that you can handle. At the same time, it is important to remember that the more acute the problem, the more effective it will be to create a competitive advantage, and the longer this advantage will last. In this matter, the difficulty of the whole process of creating a competitive advantage is only a plus, and not vice versa.
Differentiation
Having decided on the problem that needs to be solved, that is, after identifying a competitive advantage, it is necessary to start advertising. The stage of differentiation as a whole consists in the implementation of various kinds of advertising.
At the same time, it is necessary to advertise not just a company, service or product, but to advertise with an emphasis on the chosen competitive advantage. Thus, the consumer will know that this particular product has a certain advantage, which he has been looking for so long from other companies.
At the same time, it is not forbidden to use various images and graphic techniques, slogans and quotes, the main thing is that the emphasis is on the competitive advantage of products.
But so that it is not short, since all consumers have different inertness in the perception of advertising, that is, a certain period during which the target audience gets used to the advertising material. This period is different for all groups.
Thus, for individuals, the inertness in the perception of advertising is usually up to 6 months, and for organizations - up to several tens of months. Of course, this indicator depends on the specifics of the promoted product and the business as a whole.
Concentration
The stage of concentration is no less important in creating a competitive advantage, since it is negligence, relaxation and absent-mindedness that can cause failure. For the most effective creation of a competitive advantage, it is recommended to make this task a priority by informing all employees of the company. It is this pace and daily work on this problem that guarantees the continued success of the products.
Do not forget about re-segmentation, which is recommended to be carried out annually. It will not only help identify new problems in a particular market segment, but will also determine the current state of affairs in relation to the previously selected competitive advantage, which will allow you to more accurately assess the company's strategy in the market and draw the right conclusions.
Combining all the stages, and competently performing each of them, it is important to remember that creating a competitive advantage is a rather complex and time-consuming process that requires considerable financial and time costs. Therefore, the stages of segmentation and specialization are so important for choosing a problem and assessing the possibilities for solving it.
If there is a financial opportunity, it is often useful to re-segment, but in your own region, in the region of the manufacturer. With a professional and competent approach, the company takes a significant step forward due to its competitive advantage.
In December, we started a series of articles about texts: we managed to tell why they are needed at all, what to write for specific pages of the site, what should be the structure of the selling text for the main one. In January, we talked about titles, remembered the basic rules for compiling Title and Description.
Let's continue our manual on writing texts and talk about how to sell trust in a company, product or service.
Let's say you got to work: developed a SL, came up with a USP, made up strong attractive headlines, sketched out a text outline. And everything seems to be fine - you are the coolest, coolest and the products are super. Yes, the trouble is, customers are now picky and just won’t take your word for it.
Why are you better than Vasya Pupkina or Worldwide Stroy Publishing Incorporated LLC? Why does the user have to spend their hard-earned money on you? Will you deceive him? What will be the end result for him?
You need to provide a person with evidence why you are really the best, demonstrate what benefits he will receive by purchasing a product or becoming a client of the company. This is a prerequisite for all texts. It is not enough just to interest the user, you need to convince him to contact you.
How to communicate advantages over competitors?
Do a little research - analyze your competitors, their services and products. See what their strengths and weaknesses are, think about what you are cooler in. Remember, you don't just need to talk about your accomplishments or bare product features. It should show what they will give to the client.
Let's use examples to analyze what mistakes are most often encountered when trying to talk about a company and what to do with them:
- Monotonous, stingy benefits with no evidence
We often hear the following from clients: “Everything is like everyone else, there are no differences. I like the way site.com writes - here we have everything exactly the same, write the same way. So don't do it.
Users always choose from several offers, and do not rush to the first one that comes across. And how to decide where to turn, if everywhere is the same?
For example, you don't have to go far. Let's say you want to order sushi to the office. We start to choose and see the following picture on 4 different sites of delivery services:
Find 5 differences between these 4 sites.
All have the freshest ingredients, an attractive selection, fast delivery and great prices. And no, the blocks are not taken out of context - there is no detailed explanation for them anywhere, delivery time, discount amount and other information is not indicated - guess for yourself.
Or another example:
Such a set is suitable for absolutely any company: building houses, selling spare parts, delivering flowers, sushi and everything else. The site will be lost among thousands of similar ones.
Now let's look at this option:
Of course, the block is not perfect, there is room for improvement. But nevertheless, the time is indicated - from 60 minutes to receive the coveted rolls, and you can pay for the order by card, you do not have to run for cash.
In this version, there is also a lack of factual information in places, but the benefits are still obvious, especially against the background of absolutely identical competitors.
Another example, already from our website from the SEO service description page on the terms of subscription service:
I think the difference between good option and bad you caught.
What to do:
Get rid of clichés and clichés. Don't forget specifics. Site owners - do not hide information and do not play spies. Give the copywriter all the data. We will not get tired of repeating: competitors will spend time and study your prices, advantages and chips, but the client will not do this - he will simply leave the site and will not return.
Copywriters - to actively ask questions to the client, ask for factual information and not be limited to formulaic phrases about favorable prices, high quality and a wide range.
- Solid "we-we-we"
Write not about how good you are, but about what benefits the user will receive by becoming a client of the company.
You read this and the question arises, but what about me as a client? What will I get?
And at the sight of the text about “young dynamically developing companies” one wants to cry at all.
What to do:
When describing the benefits, think from the person and their personal interests. Less we, more you.
Focus on what the client will get. The user does not care whether you are developing dynamically or not, he wants to solve his problem with the help of a specific product or service. Show how this will happen.
- Much water"
Brevity is not always the sister of talent. But lengthy descriptions of the benefits of work will also not bring any benefit.
No one will wade through this sheet of text, consisting of 90% of formulaic phrases.
What to do:
Write clearly and to the point, structure information, do not pour water. Don't forget to format your benefits in an easy to read way: use icons, lists, tables.
- Lack of facts and evidence
This has already been mentioned, but we will repeat it again. In words, all without exception are the best. If you are faster, more attentive, more reliable than your competitors - prove it, do not be modest. The client's doubts can be dispelled by the facts. Without them, he again receives another set of clichés that will not persuade him to buy from you.
What to do:
Operate with facts: a wide range - exactly how many positions and what it will give the client, low cost - what is the minimum threshold and due to which the price is low, quality assurance - which one, for how many years, etc.
Show advantages in comparison with competitors. Describe how things are for you, but as in other companies. Let the client visually make sure that it is clearly more profitable to order products from you.
- Advantages for optimization or just "to be"
Someone still believes that the text is only needed for optimization and it is important to cram as many keys into it as possible. About the fact that you need to write for people, and not for search robots, is often forgotten.
The result is this:
What are the advantages here - a mystery. What kind of purchase and trust in the company can we talk about? And search engines will not be happy with such text.
What to do:
Write for people, not for robots. Optimization should be organic and invisible, if the keyword doesn't fit well with your benefit description, don't use it.
- Substitution of advantages by technical properties or characteristics of the product
Another common mistake. The user is offered, under the guise of benefits, a memory capacity of 1 TB, 4K FullHD super technology, a unique method of singular spectral analysis, but they do not write what this will give the client.
Not everyone will understand why he needs these terabytes of memory or how the innovative pistol for Karcher differs from all the others.
What to do:
Turn features into benefits. Think and tell what the compact size of an electric smoker will give the user, what is good about English sheep wool or an innovative box for an action camera. Explain to the user how much easier and better life will be with your services or products.
Instead of output:
The benefits block is an important element of the text. The reader should immediately receive an answer to the question "what is advantageous for me here." You need to win over a person, gain his trust and push him to commit a targeted action.
How to do this, you ask? It is difficult to give a universal answer - after all, this is how new patterns and clichés are created. Each company, product or service has its own unique advantages, it is important to be able to highlight and show them. When working, we do not just present the company and products in a favorable light, but carefully study the needs of the target audience and tell customers what benefits and benefits they will receive. We will gladly help
The world does not stand still, information is constantly updated, and market participants are in search of marketing ideas, ways of doing business, new views on their product. Any business is tested for strength by competitors, so when developing a development strategy, it is reasonable to take into account their influence, market share, position and behavior.
What is competitive advantage
Competitive advantage is a certain superiority of a company or product over other market participants, which is used to strengthen its position when reaching the planned profit level. Competitive advantage is achieved by providing the client with more services, better products, relative cheapness of goods and other qualities.
Competitive advantage for business provides:
– prospects for long-term growth;
– work stability;
- getting a higher rate of profit from the sale of goods;
- creating barriers for new players to enter the market.
Note that competitive advantages can always be found for any type of business. To do this, you should conduct a competent analysis of your product and the product of a competitor.
What are the types of competitive advantages
What allows you to create competitive advantages for business? There are 2 options for this. First of all, the product itself can provide competitive advantages. One type of competitive advantage is the price of goods. Buyers often prefer to buy a product only because of its cheapness relative to other offers with similar properties. Due to the cheapness of the product, it can be purchased even if it does not represent a special consumer value for buyers.
The second competitive advantage is differentiation. For example, when a product has distinctive features that make the product more attractive to the consumer. In particular, differentiation can be achieved due to characteristics that are not related to consumer properties. For example, due to the brand.
If a company creates competitive advantages for its product, it can only highlight its position in the market. This can be achieved by monopolizing part of the market. True, such a situation is contrary to market relations, since the buyer is deprived of the opportunity to choose. However, in practice, many companies not only provide themselves with such a competitive advantage of the product, but also retain it for a long time.
4 criteria for assessing competitive advantages
Utility. The competitive advantage offered should be beneficial to the company's operations and should also enhance profitability and strategy development.
Uniqueness. Competitive advantage should distinguish the product from competitors, and not repeat them.
Security. It is important to legally protect your competitive advantage and make it as difficult as possible to copy it.
Value for the target audience of the business.
Competitive Advantage Strategies
1. Cost leadership. Thanks to this strategy, the company generates revenues above the industry average due to the low cost of its production, despite high competition. When a company receives a higher rate of return, it can reinvest these funds to support the product, inform about it, or outperform competitors due to lower prices. Low costs provide protection from competitors, as revenue is maintained in conditions that other market participants are not available. Where can you use a cost leadership strategy? This strategy is applied when economies of scale or when the prospect of achieving lower costs in the long term. This strategy is chosen by companies that cannot compete in the industry at the product level and work with a differentiation approach, providing distinctive characteristics for the product. This strategy will be effective with a high proportion of consumers who are price sensitive.
- Information about competitors: 3 rules for collecting and using it
This strategy often requires the unification and simplification of the product to facilitate production processes, increasing production volumes. It may also require a high initial investment in equipment and technology to reduce costs. For the effectiveness of this strategy, careful control of labor processes, design and development of products, with a clear organizational structure, is necessary.
Cost leadership can be achieved through certain opportunities:
- limited access of the enterprise to obtaining cheap resources;
- the company has the opportunity to reduce production costs due to the accumulated experience;
- the management of the company's production capacity is based on the principle that promotes economies of scale;
- the company provides for scrupulous management of the level of its reserves;
- tight control of overhead and production costs, abandoning small operations;
– availability of technology for the cheapest production in the industry;
– standardized production of the company;
2 steps to building a competitive advantage
Alexander Maryenko, Project Manager of A Dan Dzo Group of Companies, Moscow
There are no clear instructions for creating a competitive advantage, taking into account the individuality of each market. However, in such a situation, you can be guided by a certain logical algorithm:
Determine the target audience that will buy your product or influence this decision.
Determine the real need of such people related to your services or products, which are not yet satisfied by suppliers.
2. Differentiation. The company, when working with this strategy, provides unique properties for its product, which are important for the target audience. Therefore, they allow you to set a higher price on the product compared to competitors.
Product leadership strategy requires:
– the product must have unique properties;
- the ability to create a reputation for high quality product;
– high qualification of employees;
- ability to protect competitive advantage.
The advantage lies in the ability to sell the product at higher prices than the industry average, avoiding direct competition. Thanks to this strategy, it is possible to achieve better commitment and loyalty to the brand, under the conditions of competent assortment building, the presence of competitive advantages.
Risks or disadvantages of using a differentiated marketing strategy:
- a significant difference in prices is possible, due to which even the unique qualities of the product will not attract a sufficient number of buyers;
- the product may lose its uniqueness when copying the advantages of cheaper products.
This strategy is used for saturated markets by companies that are ready for high investment in promotion. There is no need to talk about low cost - it will be higher than the market average. However, this is offset by the ability to sell the product at higher prices.
3. Niche leadership or focus. The strategy involves protection from major competitors and substitute products. In this case, it is possible to achieve a high rate of return due to more effective satisfaction of the needs of a narrow audience of consumers. This strategy can be built on competitive advantages of any type - on the breadth of the proposed assortment or on the lower price of the product.
In this case, the company is limited in market share, but it does not need significant investments for product development, which is a chance for the survival of small enterprises.
Risks and disadvantages of using a focus strategy:
- there is a high probability of large differences in prices for goods compared to the leading brands of the market, which may scare away their target audience;
- the attention of large market participants is switched to niche segments in which the company operates;
- a serious danger of reducing the difference between the needs of the industry and the niche market.
Where to Use a Niche Leadership Strategy? Working with this strategy is recommended for small companies. It is most effective when the market is saturated, there are strong players, with high costs or non-competitiveness in terms of costs in comparison with market leaders.
Three stages of service strategy
I stage. Innovation. When one of the market participants introduces something new in terms of customer service. The company in this period stands out, given the presence of a new competitive advantage.
II stage. Addictive. The proposed service is becoming familiar to consumers, and an analogue is gradually being introduced in the activities of competitors.
III stage. Requirement. For consumers, this proposal becomes an integral element of a service or product, moving into the category of standards.
How to check the level of service in your company
- Conducting informal surveys. The CEO and other managers need to understand the opinion of consumers about the proposed service.
- Conducting formal surveys (focus groups). It will be rational to involve both consumers and representatives of all departments of your company for these events.
- Engage third-party consultants to interview company employees. Thanks to external consultants, the importance of answers increases (with more candid answers).
How to improve the service
Tatiana Grigorenko, managing partner of 4B Solutions, Moscow
Consider general tips for improving the service in the work of companies.
1. Surprise, influence emotions. Usually visitors in the office are offered tea bags or instant coffee. We decided to pleasantly surprise our customers - the visitor is offered a choice of 6 types of professionally prepared coffee, 6 excellent varieties of tea with branded chocolate for dessert.
2. Break the rules. In the modern market it is inefficient to be like everyone else, you need to be better than the rest.
3. Listen to your customers. Do you need to ask your customers what they would be interested in?
How to create competitive advantage
When developing a competitive advantage, there are nine criteria for a successful option to consider:
1) Uniqueness.
2) Long-term. Competitive advantage should be of interest for at least three years.
3) Uniqueness.
4) Credibility.
5) Attractiveness.
6) Have Reasons to Believe (a basis for trust). Concrete grounds that will make buyers believe.
7) Be better. Buyers need to understand why this product is better than others.
8) Have the opposite. There must be a complete opposite in the market. Otherwise, it will not be a competitive advantage.
9) Brevity. Must fit in a sentence of 30 seconds.
Step #1. Compiling a list of all benefits
The benefits of the product are sought as follows:
– we are interested in buyers, what competitive advantages they hope to get at the expense of your product;
- make a detailed list of all the properties that the product has, based on the characteristics from the marketing mix model:
1) Product
What can be said about the product:
– functionality;
– brand symbolism: logo, name, corporate identity;
– appearance: packaging, design;
- the required quality of the product: from the position of the target market;
– service and support;
- assortment, variety.
2) Price
What can be said about the price:
– price strategy for entering the market;
– retail price: the selling price of the product must necessarily be related to the desired retail price, only if the company does not become the last link in the overall distribution chain.
- pricing for different sales channels; supposed different prices, depending on the specific link in the supply chain, a specific supplier;
- package pricing: with the simultaneous sale of several products of the company at special prices;
– policy regarding the conduct of promotional events;
– Availability of seasonal promotions or discounts;
- Possibility of price discrimination.
3) Place of sale
It is necessary to have a product on the market in the right place so that the buyer can see it and purchase it at the right time.
What can be said about the sale meta:
- sales markets, or in which the sale of goods is planned;
– distribution channels for the sale of goods;
– type and conditions of distribution;
– conditions and rules for the display of goods;
- Logistics and inventory management issues.
4) Promotion
Promotion in this case involves all marketing communications to attract the attention of the target audience to the product, with the formation of knowledge about the product and key properties, the formation of the need to purchase the product and repeat purchases.
What can be said about the promotion:
– promotion strategy: pull or push. With the Push strategy, it is supposed to push the goods through the trading chain by stimulating intermediaries and sales personnel. Pull - "pulling" products through the distribution chain by stimulating consumers, the final demand of their product;
– target values of knowledge, brand loyalty and consumption by their target audience;
– required marketing budget, SOV in the segment;
- the geography of their communication;
– communication channels for contact with consumers;
– participation in specialized shows and events;
- brand media strategy
– PR-strategy;
– promotions for the next year, events aimed at sales promotion.
5) People
– employees who represent your product and company;
– sales personnel in contact with the target consumers of the product;
– consumers who are “opinion leaders” in their category;
- manufacturers, on which the quality and price of the goods may depend;
– this group also includes privileged consumer groups, including VIP clients and loyal customers who generate sales for the company.
What can you say about working with people:
- programs for the formation of motivation, with the development of relevant competencies and skills among employees;
– methods of working with people on whom the opinion of the consumer audience depends;
– education and loyalty programs for their sales staff;
– Methods for collecting feedback.
6) Process
This one applies to the service market and the B2B market. Under the "process" refers to the interaction of the company and consumers. It is this interaction that is the basis of buying on the market with the formation of consumer loyalty.
- Unique Selling Proposition: Examples, Development Tips
You can talk about programs to improve the process of providing services to your target customers. The goal is to provide the most comfortable conditions for buyers when purchasing and using the offered service.
7) Physical environment
This also applies to the service market and B2B. This term describes what surrounds the buyer during the purchase of the service.
Step #2. Rank all the benefits
To evaluate the list, a three-point scale of the importance of characteristics is best suited:
1 point - the benefit of this characteristic for target consumers is of no value;
2 points - the benefit is not primary, which stimulates the purchase of goods in the first place;
3 points - the received benefit is one of the most significant properties of the offered service.
Step #3. Compare list of benefits with competitors
The resulting list of characteristics should be compared with its competitors according to two principles: the presence of this property in a competitor, whether the condition is better for a competitor or for you.
Step number 4. Look for absolute competitive advantages
Among the sources of absolute competitive advantages, it should be noted:
- the product is unique in one or several properties;
– uniqueness by combination of properties;
- special components of the product composition, a unique combination of ingredients;
– certain actions are performed better, more efficiently and quickly;
- features of appearance, form, packaging, method of sale or delivery;
– creation and implementation of innovations;
- unique technologies, methods for creating a product, patents;
- qualification of personnel and the uniqueness of its human capital;
- the ability to ensure the minimum cost in their industry, while assuming a higher profit;
– special conditions of sales, after-sales service for consumers;
- access to limited raw materials, resources.
Step number 5. Look for "false" competitive advantages
First mover. Declare the properties of competitors' products first, while they have not yet informed their target audience about them;
Efficiency indicator. Creating your own performance evaluation indicator;
Curiosity and interest. You can stand out thanks to a factor that is not considered decisive when buying, but will allow you to attract the attention of the target audience.
Step number 6. Make a development and control plan
After identifying a competitive advantage, you need to form two further marketing action plans - a plan to develop your competitive advantage over the next few years and a plan to maintain the relevance of the presented advantage.
How to analyze current competitive advantages
Stage 1. Make a list of evaluation parameters
Create a list of key competitive advantages of your product and competitors.
For evaluation, a three-point scale is best suited, according to which are put:
1 point = the parameter is not fully reflected in the competitive advantages of the product;
2 points = the parameter is not fully reflected in the competitive advantage;
3 points = the parameter is fully reflected.
Stage 3. Make a development plan
Form your plan of action aimed at improving the competitive advantage of the company. It is necessary to plan improvements on the points of assessment, which were given less than three points.
How to develop competitive advantages
Competitive behavior in the market can be of three types:
Creative. Implementation of measures to create new components of market relations in order to obtain a competitive advantage in the market;
Adaptive. Accounting for innovative changes in production, ahead of competitors in relation to the modernization of production;
Providing-guaranteeing. The basis is the desire to maintain and stabilize the obtained competitive advantages and market positions in the long term by supplementing the assortment, improving quality, and additional services to consumers.
The duration of retention of competitive advantages depends on:
source of competitive advantage. Can be a competitive advantage of high and low order. The advantage of a low order is represented by the possibility of using cheap raw materials, labor, components, materials, fuel and energy resources. At the same time, competitors can easily achieve low-order advantages by copying, searching for their sources of these advantages. The advantage of cheap labor can also lead to negative consequences for the enterprise. With low salaries for repairmen, drivers, they can be poached by competitors. Benefits high order become an excellent reputation of the company, specially trained personnel, production and technical base.
The number of clear sources of competitive advantage in the enterprise. A greater number of competitive advantages at the enterprise will seriously complicate the tasks of its pursuers-competitors;
Constant modernization of production.
How to survive the crisis and maintain competitive advantages
Alexander Idrisov, Managing Partner, StrategyPartners, Moscow
1. Keep your finger on the pulse of events. Some of the employees should collect and analyze information about the state and trends of the market, how these trends can affect the business, taking into account the study of consumer preferences, demand dynamics, data on investors and competitors.
2. Develop the most pessimistic forecast for your company.
3. Focus on paying customers.
4. Focus on a narrow range of tasks. You need to carefully study the business model of your company. This does not mean that you need to abolish all areas of your activity. But it is worth focusing on a narrow range of tasks, abandoning non-core tasks or areas that can be outsourced.
- Reframing, or How to deal with customer objections
5. Consider teaming up with competitors. Many companies are now ready for alliances with competitors on mutually beneficial terms.
6. Maintain relationships with potential investors. A particularly important condition during a crisis is that you must not lose touch with investors, it is better to activate them if possible.
Information about the author and company
Alexander Maryenko, Project Manager of A Dan Dzo Group of Companies, Moscow. Graduated from the Faculty of Finance of the Nizhny Novgorod state university. Participated in projects (more than 10, of which six - as a manager) aimed at increasing the profitability of companies' businesses and solving their systemic problems.
John Shoal, President of ServiceQualityInstitute, Minneapolis (Minnesota, USA). It is considered the founder of the service strategy. At the age of 25, he founded a firm specializing in educating companies about a culture of service. Author of five bestsellers on the topic of service, translated into 11 languages and sold in more than 40 countries.
ServiceQualityInstitute formed by John Shoal in 1972. Specializes in the development and implementation of service strategies in companies. More than 2 million people have been trained by ServiceQualityInstitute specialists. The main office is located in Minneapolis, branches - around the world (in 47 countries), their share is 70% of the total number of representative offices of the company. In Russia, ServiceQualityInstitute and John Shoal are represented by ServiceFirst.
Tatiana Grigorenko, managing partner of 4B Solutions, Moscow.
4B Solutions Company founded in 2004. Provides outsourcing and consulting services. Areas of specialization - improvement of customer service systems, anti-crisis management, professional legal and accounting business support. The staff of the company is over 20 people. Among the clients are the Association of Business Aviation, Triol Corporation, Rafamet Machine Tool Plant (Poland), ANCS Group, IFR Monitoring, MediaArtsGroup, Gaastra chain of boutiques.
Alexander Idrisov, Managing Partner of StrategyPartners, Moscow.
strategy partners. Field of activity: strategic consulting. Form of organization: LLC. Location: Moscow. Number of staff: about 100 people. Main clients (completed projects): Atlant-M, Atlant Telecom, Vostok, GAZ, MTS, Press House, Razgulay, Rosenergoatom, Russian Machines, Talosto, "Tractor Plants", "Uralsvyazinform", "Tsaritsyno", publishing houses "Enlightenment", "Eksmo", the Ministry of Information Technologies and Communications of the Russian Federation, the Ministry of Regional Development of the Russian Federation, the Murmansk port, Rosprirodnadzor, the administrations of the Arkhangelsk, Nizhny Novgorod, Tomsk regions and the Krasnoyarsk Territory, Avantix company.
Today, it is no longer enough to create a brand, a strategy for its promotion and development, and work on positioning, hoping for customer loyalty and love for the company. The whimsical buyer wants to trust the company. To know that he can give his money and get what he expects without risk. Therefore, it is important for any company to present its competitive advantages to its potential client, showing that it is it that can satisfy its needs. In this article, we will talk about what is competitive advantage, why they are needed, what they are and how to find, select and group them.
Competitive advantages and benefits: what is it and how do they differ
The concept of competitive advantage refers to the superiority of a company, product, service or brand over other existing market participants - competing companies working with you in the same niche. For business, competitive advantage helps to solve a number of critical tasks:
- Strengthens the company's position in the market;
- Creates the prospect of stable growth and uninterrupted operations;
- Creates difficulties for competitors who enter the market.
But the most important value of competitive advantages is their ability to bring profit to the company. Any company works for profit, for its development and expansion of its customer base. And competitive advantages, like nothing else, help her in this. They become the main motivator for the consumer, encouraging him to take the actions that we need.
Benefits and benefits. Same?
In both marketing and Internet marketing, you have probably come across the concept of advantages and benefits more than once. When developing a quality landing page, a block with a list of advantages and / or benefits is an indispensable part of the selling strategy and structure. But many business owners perceive the two concepts as equivalent, which is a big mistake.
Benefits and benefits are identical in value and impact on the customer. They bring the same result. But they differ in meaning, so it is important to understand what they are, as well as to know how and when to use them.
Advantages are formed based on the characteristics of a product, service or company as a whole. With their help, the client understands why and how your company is better and why it's best for him.
Benefits are the derivative of the benefits provided by the feature. They help the client solve their problem, make life easier, save time, money, or what is relevant for the buyer at the moment.
Despite the fact that the competitive advantages of the organization and the benefits are different in their specifics, they are united by common requirements. They must:
- Stand out from competitors;
- Satisfy the needs of customers;
- To be stable and unchanged in a volatile market;
- Be unique and make it clear that no other company will provide such advantages and benefits;
- Work for the profit of the enterprise.
Competitive advantages should be based on the desires of the target buyer, which must be studied. After the benefits are formed, you can highlight the benefits based on them and demonstrate to your buyer. Let's take an example based on a laptop repair service.
Client Desires (I WANT):
- I want my laptop to work without failures and glitches;
- I want my laptop not to slow down or heat up;
- I want to be comfortable working on my laptop.
Customer Criteria (AS I WANT):
- I want it not to be more than the amount I'm counting on;
- I want my laptop repaired in 1-2 days;
- I want original spare parts installed;
- I want to be given a repair guarantee of at least 6 months;
- I don't want to go on my own service center.
Based on the analysis of the criteria set by the potential client , we form the advantages:
- Laptop repair from 100 UAH;
- Repair time - 1-2 days;
- Installation of original spare parts Asus, Acer, Samsung. We do not use Chinese analogues and fakes;
- Repair warranty - 12 months;
- Courier delivery of a laptop to a service center and to hands after its repair.
The benefits are defined. Let's move on to the benefits:
- Save time - repair takes only 2 days;
- Saving money - laptop repair will cost 20% cheaper than in other service centers;
- Saving effort - the courier will leave the laptop there and back.
Ideally, both advantages and benefits should be stated. Any information affects the conversion of the site, so be sure to work it out and show it to your buyer.
If you are planning to open a company selling consumer goods, which is sold by fifty other companies in your city, and it seems to you that it is impossible to single out competitive advantages, then you are deeply mistaken. For any company, you can develop strong advantages that will set it apart from the rest. The main thing is to know how to do it. And we'll be happy to tell you more.
What are the types of competitive advantage
Competitive advantages can be natural or artificial. Natural advantages state a fact and convey truthful information. Artificial advantages are manipulative, but can be of great benefit if presented correctly.
What is included in the group of natural benefits
Very often, companies do not demonstrate natural advantages, thinking that they are obvious. And this is a big mistake, since even the most common values among competitors can be very powerfully presented. Next, we list what is included in this group.
1. Price / income
Perhaps the most powerful advantage. Especially if your competitors don't have it. But here it is important to correctly format the information. Do not write formulaic phrases: “Low price”, “Discounts for regular customers”, “Wholesale prices”, “Prices from the manufacturer”, etc. Write specifics: “25% discount on refrigerators”, “prices 30% below market prices”. Always speak in numbers. This is very important, especially for B2B companies. Information about earnings is also very good at catching a potential buyer. This is very often used by information businessmen, presenting the opportunity for the user to earn money as an advantage of the service.
2. Timing / energy savings
Your client always wants to save their time. Give him this opportunity by specifying specific deadlines. If your logistics department is well developed and you guarantee fast delivery, write how many days it will take to ship the goods from one point to another. It is also important here to exclude clericalism and formulaic phrases, such as "Fast delivery". Write "Delivery in 1 day from Kyiv to Dnipro" or "Delivery in 1 hour to anywhere in the city." A valuable advantage can be information about the benefits that will help the consumer save his strength, energy, time or increase his own productivity (for example, when using the services of a cleaner, the client pays for cleaning and saves his energy by getting clean in his house). Such customer care inspires confidence and motivates the consumer to take action.
3. Your experience
Here it is very important not to cross the fine line, approaching the hackneyed phrase "We are experts in the field ...". Such expressions no longer work and are of no interest to anyone. If you decide to declare your experience, then speak in fact - what you have done in 10 years of your activity: built 150 houses, opened 15 branches throughout the country, introduced a new production line of goods, etc. Your client is looking for facts about your successes, not information about your years of work.
4. Terms of cooperation
Here, any features of cooperation can be an advantage. Don't be afraid to list the ones your competitors also list. The fact that you accept cash and non-cash payments can significantly increase the chances of a sale, as it provides convenience to the buyer. Indicate all the factors of cooperation: the presence of a showroom, the possibility of manufacturing a model of goods to order, the geographic location of the office next to a public transport or metro stop. Even the possibility of self-delivery and your own warehouse or any information that gives the client the benefit of saving their time or effort, as a competitive advantage, can play into your hands by providing the buyer with maximum comfort.
5. Achievements
Diplomas, diplomas, certificates, a list of partner companies and large client companies with their logos work as social proof that inspires confidence in the company, which is the main goal of competitive advantages. With the help of documents that you demonstrate to your potential clients, you will emphasize your experience, status, and authority. And this is very important for buyers, as it says that you are working for the future and development, which means that your company will not close tomorrow.
6. Specialization
If your company operates in a narrow specialization, then you definitely need to tell your client about it. Imagine that you are using an Ariston brand washing machine. And one day it broke. Which company will you contact - the one that only repairs Ariston washing machines or the one that repairs all brands of washing machines? Surely, in the first place, since you subconsciously conclude that its employees are more experienced in matters of your washer.
7. Business features
Any fact specific to your business can become a competitive advantage. The use of a certain technology or equipment, a range of products that exceeds the competition, the purchase of raw materials in Europe - all this will help you get into the kings. Keep this information in mind when generating benefits.
What advantages can be called artificial
Such advantages can help out a company that operates in a very popular niche. It is usually very difficult for such firms to find competitive differences, since all organizations most often work on the same principle. Or, the formation of artificial advantages will help a young company that has just entered the market and cannot “compete” with established participants stand out. Let's list what can serve as such advantages
1. Added value
Let's say you sell women's dresses. In this niche, it is very difficult to compete with similar companies that may even buy from the same supplier as you. There is a way out - to create added value: to offer your client something that competitors do not offer. For example, when buying a dress, an accessory as a gift. In other words, any even the most ordinary action will help you create an advantage over competitors and attract the attention of buyers.
2. Responsibility for the product / service
It works very well, but on the condition that you are ready to be really responsible for what you sell. For example, you claim that the doors you sell will last 30 years because you know they are made from oak without the use of cheap substitutes. Customers will be drawn to you if your statements are persuasive.
3. Warranty
Any guarantee will become a competitive advantage if its conditions are met. A guarantee can be given for both the service and the product. For example, you can guarantee the possibility of returning and exchanging goods within 30 days, despite the fact that by law this can only be done within 14 days. Or guarantee a refund if the service does not bring results. Don't worry that customers will often return goods or demand a refund. Generally, if the user is not satisfied with the purchase, he forgets about guarantees. But this is not a reason to offer low-quality goods / services in the hope that compensation will not be required for them.
4. Demonstration of your offer
If your product or service does not have clear advantages (which is quite common), then you can simply show your potential client what is being offered to him in the form of a demo. If this is a product, then you can make a video about it appearance to show the person what he really looks like. If the service is the process of its execution. Remember, a person perceives 85% of information visually. Therefore, demonstrating your offer will be a significant advantage for your company.
5. Testimonials from your customers
It is important that the reviews are real. In this case, they will become social proof, a reason to trust your company and its activities. It will also create a competitive advantage over other firms. They work better with video reviews, where real customers express their opinion about a company, product or service. But if this option is difficult to implement, you can use a text review by inserting a phone number, a link to social network or the client's e-mail address with prior agreement on the publication of his personal data.
6. USP
We won't go into detailed description unique selling proposition and its value, as it has already been done. Let's just say that with the right analysis of business and target audience, as well as the competent construction of a USP, it can become a powerful advantage for your organization and increase its sales.
Creating competitive advantages: how to turn “simple” into “golden”
Before you begin to develop a competitive advantage, you need to conduct two critical analyzes - the target audience and competitors.
Target audience analysis
You need to understand who your client is, how old he is, what social status. And, most importantly, what problems he wants to solve with the help of your product, service or company as a whole. Problems can be completely different: from the urgent need to buy a product here and now due to lack of time to meeting the requirements for its safety. For example, a person wants to make sure that all the tools in your beauty salon are disinfected.
If your target audience consists of several different groups, you need to select one, which will be the focus of your site and the development of benefits. Ideally, the developed competitive advantages should satisfy the needs, address fears and solve problems of the entire target audience, even if it consists of several groups. But sometimes this is impossible to do, so it is advisable to work out competitive advantages for the most important and promising group.
Competitor analysis
Advantages would not be called competitive if they were not superior to your competitors. When analyzing market participants in your niche, it is important to highlight their strengths and weaknesses. Understand their advantages - what they do better than you. And, on the contrary, to determine their weaknesses, which in the future you can make your superiority over them.
Stages of developing competitive advantages
After you are already familiar with your target audience and competitors, proceed to the main thing - work step by step on highlighting the benefits.
Stage 1. Determine all the competitive advantages of the company / product / service
Highlight all the benefits that you know. This is very important in order to further highlight those that will become competitive. If you are identifying the benefits of a product or service, you can ask your customers which benefits are more important to them.
Stage 2. Benefits ranking
Once you've compiled a list of benefits, you need to sift through those that are least important to your consumer and those that are most important. This is necessary in order to highlight the most valuable factors that will help you grow your business and be able to "overcome" your strong competitors.
Stage 3. Comparison with competing companies
The list of selected advantages must be compared with the advantages of competitors. You need to know which of them companies in the market have and which do not. And also know what they are better and worse at.
Step 4: Highlight Unique Benefits
You need to highlight absolute advantages - those that your competitors cannot copy. These are the benefits that only your company, service or product has. For example, only your company uses German equipment that allows you to print in a unique format. Or only your company presents the product in a unique limited edition packaging.
Stage 5: Develop false benefits
It is not always possible to develop natural competitive advantages, especially in very popular and saturated niches. The only way out is to create false advantages.
False advantages are advantages that work on the emotions and persuasion of the consumer that your company / product / service is unique. For example, in an ad for Jacobs coffee, it is announced that it has "aromoxomite magic." The concept of "aromoxamite" does not exist in nature, but this brand's unique selling proposition has become its most important advantage.
Stage 6. Development and control
Formation of competitive advantages should end with the development of a plan. You need to strategize how to develop based on the identified advantages and how to keep them in the future.
The most common mistakes in developing competitive advantages
A huge number of companies in the formation of their advantages make critical mistakes, after which, while working, they wonder why they are unable to become leaders due to a large competitive pressure. Such errors are so common that they occur all the time. Most often, this is the use of stamps and stationery. Here are the TOP 6 most common competitive advantages that have long ceased to be them.
We can do what you don't need
Very often, companies, making up their competitive advantages, completely forget about their customers. They talk about what they have to offer, forgetting what their target customer really needs. As a result, such benefits do not work. They simply do not arouse interest, since the person understands that they will not bring him absolutely no benefit.
Tip: When creating advantages, focus on the desires of your buyer, leaving your opportunities in the background.
We help you increase your profit by 40% with our business plan.
15 years of experience
Almost every company considers it their duty to indicate their work experience. But this information is no longer valid for a potential client. He does not care that you have worked 5, 15 or 30 years in the market, never closing. He cares what you have done during this time.
Tip: If you want to list the experience of your company, be sure to indicate what you have achieved during this time.
Over the 10 years of operation of the Gradostroy company, we have built 2 nine-story new buildings, in which 70 families already live.
High level of service/quality
To be honest, your client absolutely does not care that certified specialists work in your company. The presence of certificates does not affect the quality of service at all. Therefore, the use of template phrases: “We guarantee a high level of service” or “We provide a high quality product” is just a waste of time.
Tip: Always be specific and condition your statements. Tell the consumer how he will be provided with a high level of service.
The service station will perform a free diagnosis of the automatic transmission of your car and provide a 2-year warranty upon completion of the service.
Individual approach
A boring, hackneyed and annoying phrase that already hurts the eyes and ears. By using this phrase to your advantage, be sure that your potential customers won't believe you. At least because it is used by a dozen of your competitors and thousands of other companies with whom they met.
Advice: Do not use this ill-fated phrase never and under no circumstances. If you want to show your buyer that you work on special terms, say so directly.
You can buy this product under the order; we will develop a custom-made layout taking into account your dimensions; We will deliver the goods by courier at a convenient time and place.
Affordable prices
Leading the way in all the pompous benefits that companies like to use is the affordable/loyal price claim. Your client will not even perceive this phrase, not to believe it.
Tip: Be specific, speak the language of numbers.
Cheaper than market prices by 10%; 5% discount for every customer; save 30% when buying this set.
A wide range of
And for dessert, a phrase that will surely appear before your eyes on the website of an online store or in an advertisement for any commercial company. This advantage has become so boring and banal that potential customers do not even realize it.
Tip: If you want to focus on the assortment, speak specifically about the assortment of which product you are talking about.
1000+ models of women's boots made of leather, suede and nubuck.
Your company benefits don't have to be traditional and hackneyed. Try to highlight unique features that can not only grab the reader's attention, but also motivate them to take further action. After all, this is exactly what you expect from your potential client.
Tips on how to write competitive advantages and benefits
The best friend of competitive advantage is specificity. Each benefit must be clearly disclosed so that the potential buyer does not invent something superfluous and completely unnecessary. We will give recommendations on how to and how not to present the advantages and benefits of the company through examples.
Only in fact
Rid your client of vague phrases that do not carry value. Always be precise, to the point.
- We are the best in our niche;
- We sell the highest quality goods;
- We cooperate with large companies;
- A wide range - only with us.
- We do not use wet mixes to reduce the construction time of a house;
- All products have been tested by the sanitation station and comply with GOST standards;
- When buying a frying pan, we offer a choice of 10 models of lids;
- We cooperate with the WOG, Gefest and Parallel petrol stations.
Without anonymity
Anonymity is confusing, and understatement only raises doubts. All claims must be substantiated. Experienced users can easily see through your farce, so bring the facts.
- We use the best parts for your car.
- We use new BMW parts from the manufacturer.
Only with evidence
Everything is clear here. If the client does not clearly highlight its benefits, then your statements are empty.
- We offer favorable terms of cooperation.
- Saving 35% when purchasing a cinder block in the amount of 20,000 UAH.
Possibility of verification
Your customer must trust you. And trust does not appear in a vacuum. Therefore, give him the opportunity to verify your statements.
- We build modern and comfortable objects for life.
- You can visit and inspect the facilities built by the company at a convenient time for you.
Orientation to target audience
Not always a competitive advantage is focused on all groups of the target audience. Therefore, only partially can be useful. It is very important to understand who the competitive advantage is designed for, otherwise it will not bring efficiency.
- Headphones transmit clear sound and do not get confused in your pocket.
- Earpods have a sensitivity of 113dB, which allows for accurate sound reproduction for sound engineers. Frequency response range - 8 - 27000 Hz, which will allow you to enjoy clear, deep bass and crystal clear high frequencies without distortion;
- The fabric braid prevents the headphones from getting tangled in your pocket, you will not waste time unraveling them.
It is very important to show true benefits. Otherwise, fictional facts will only cause a negative impression of the company or product from the buyer, and he will go to your competitors.
Learning to develop a company's competitive advantages based on its weaknesses
Not all companies, especially young ones that are just entering the market, can compete with their competitors. To stay afloat, they have to inflate prices, extend the delivery time due to the not yet fully formed logistics department. All this can negatively affect the business, alienating customers. After all, no one wants to pay more or wait for their order longer when competitors have everything much cheaper and faster.
But there are special tricks that help to make an advantage out of disadvantages. These are facts that become a counterbalance to your weaknesses. Let's give concrete examples.
Inconvenient office location, far from the center | The company's office has a showroom where you can see the goods live. The warehouse is on site. There is convenient parking, including for trucks. Local pickup and delivery available. |
The price is much higher than in competing stores | Yes, but the package includes additional "buns": updated to latest version operating system, case, headphones and protective glass as a gift. |
Long delivery on order | It is possible to order spare parts from the manufacturer without intermediaries. It is possible to order rare spare parts. |
Young company with no experience | Sending goods on the day of order by Ukrposhta, Nova Poshta, Intime or Delivery, free consultations, without prepayment. |
Very small selection of products | Narrow specialization in a particular brand. Detailed advice on the specifics of the product. |
As you can see, even those shortcomings that can lead a company to failure can become powerful competitive advantages that even established firms in the market cannot provide.
Examples of competitive advantages in different areas of the company's business
Theoretically, it is much easier to develop competitive advantages for companies in the field of trade than for those in more niche businesses. Therefore, we will give specific examples for some niches that can become inspiration for you and the basis for your ideas.
Benefits for the tourism business
- Tours to remote corners of the planet;
- Discounts on last-minute tours up to 80%;
- Free guide;
- Free transfer by luxury car;
- Gifts from the tour operator when ordering certain tours.
Benefits for a law firm
- Specialization;
- Availability of lawyers, notaries and other highly specialized specialists;
- Geographic location of the office;
- Free online consultation;
- 15 years of company experience and 98% of successfully completed cases in favor of the plaintiff.
Benefits for the transport company
- Own car park with different tonnage;
- Free delivery and escort of cargo when ordering for a certain amount;
- Built-in navigation in the car and the ability to track its location;
- Responsibility for the condition of the cargo upon arrival;
- Official contract for cooperation.
Benefits for a cleaning company
- Collaboration by agreement. Full responsibility for the result;
- Cleaning is carried out using professional equipment from sulfate-free detergents;
- Financial responsibility for the condition of expensive interior items;
- Financial responsibility for the safety of material assets;
- Work with difficult pollution.
Brand value development
The value of a brand is not only the positive characteristics and quality of the product. These are the emotions and associations that the name evokes in a potential buyer, allowing him to be confident in himself and in the company. When a brand becomes famous and wins love, it becomes the strongest motivator of a person to action. Logically, if we know that a particular brand of toothpaste will help reduce tooth sensitivity, then we will choose it, and not any other, whose advertising announces a similar feature of the product.
How to develop brand value?
There are many ways to create brand value and further develop it. But, first of all, it is necessary to analyze the target audience, its needs, desires. You need to understand what is most important and valuable to them in order to emphasize this when forming values. Once the target audience has been analyzed, you can use one of the following methods to form and develop values.
Value + Benefit
It is very effective to present to the buyer not only value, but also the clear benefit that the brand will provide to him. For example, Head&Shoulders shampoo for women not only creates volume in hair, but also eliminates dandruff. This means that girls using this brand's shampoo will get clean hair, voluminous hairstyle and self-confidence due to the absence of dandruff. The important thing to note here is that the benefit is real and the brand really lives up to its claims.
Expectation Formation
Brand value can be developed based on the formation of any expectations. At the same time, a person subconsciously creates for himself a certain picture, image and feelings that he expects to receive using the brand. Even if the actual result is not as powerful as expected, the consumer will experience it to the maximum, as he has already convinced himself of this. For example, the slogan energy drink Red Bull: "Red Bull inspires." This does not mean that a person will be able to fly. But he makes it clear that the boost of energy that he will receive after drinking the drink will allow him to feel a significant surge of strength.
Help effect
This method involves creating conditions under which the consumer participates in solving any problems. For example, McDonald's periodically arranges promotions to help orphans. When ordering fast food, the client is given a palm-shaped sticker where he indicates his name. Thus, he is given to understand that he gave part of the money with his purchase to help those in need to these children.
Creation of an alter ego
Some brands demonstrate their value in the ability to shape the customer's alter ego. A person gets the feeling that, using this particular brand, he is capable of something that he would not have dared to do before. Such brands very often work for a provocation. Often this method is used in fashion brands. Or for perfumes. For example, Ax men's deodorant is positioned as a way to reveal your sexuality and attract the attention of women.
Brand value works very well for the company as a whole. With the right value development, the company will receive stable growth and a constant increase in consumers due to the effective positioning of its brand.
Developing Benefits and Creating Product Value
It is not always possible to compete on the advantages of a product, especially if the product is in a very common niche. However, if your company is a manufacturer or you are the first to bring goods to the market, then you have every chance of becoming a leader.
But do not forget that your competitors are not asleep, and after a while they will present a similar product to consumers. Therefore, it is very important to develop absolute advantages that competitors cannot take from you. And, first of all, it is necessary to analyze the target audience, identifying their desires and needs. Based on the resulting portrait of the target consumer, form the benefits of the product. It could be:
- Low price compared to competitors;
- Unique product in one, several or many properties;
- Unique composition or use of very rare ingredients;
- Special type, shape, volume or packaging of the goods;
- The product is more efficient than analogues;
- You, as a manufacturer, create an innovative product;
- The product is sold under special conditions.
When you become an innovator by introducing an entirely new product concept to the market, you can create value for it. With its help, the recognition of your product and, consequently, its sales will increase. For example, Apple, having released the iPhone, advertised an absolute innovation in the field of smartphones - a unique operating system, unique processors. This became the main value of the product at the stage of its introduction to the market.
Each developed advantage of the product should be beneficial for the consumer. That is why it is important to know exactly what your target audience wants to get when purchasing a product.
Benefits of a product / service as an emotional component
The sale of a product or service has the most important goal in terms of consumption or use - to satisfy the main need of the buyer. A person who buys something in your store wants positive changes to happen in his life with their help. He wants to get something, to become someone, or to avoid something that might bring him discomfort.
Therefore, first of all, the key advantage of the product is its ability to satisfy the desires and emotions of the buyer. Agree, because once a month you visit a hairdresser not to get a haircut, but in order to look more attractive and more confident after the hairdresser's service.
Marketers and specialists in the promotion of goods and services distinguish 7 areas, one of which is the most powerful motivator for the purchase of a particular product / service, depending on their specifics. Let's take a look at each one and give specific examples.
Money
The client / buyer wants to make a profit or not lose it.
We save your money when promoting with the help of SEO-audit for website development
When ordering a service, a client, you will certainly avoid all sorts of mistakes in the development of the site, which will negatively affect the promotion. Result: saving money on finalizing the site and eliminating errors.
Energy/time
When purchasing a product or ordering a service, a person’s goal may be an urgent need to save time or effort: to facilitate or speed up work, to increase their personal productivity.
Lose weight without getting up from your favorite couch
Preparations based on natural ingredients will help you lose weight and get the figure of your dreams without wasting your time and energy on trips to gym and grueling workouts.
Health/beauty
An important motivation for buying a product or ordering a service can be the desire to improve one's health or health. loved one, get rid of illness / pain or maintain your health at a certain level.
This remedy is your self-confidence
With the help of this line of cosmetic products for the care of problem skin, you will get rid of imperfections on the skin, eliminate oily sheen. As a result, you will get healthy skin and self-confidence, your attractiveness.
Status/affiliation
By purchasing goods and services, a person may aim to emphasize his individuality, taste with their help or attribute him to any group or, conversely, highlight him.
You are unique in this dress.
When you buy a one-of-a-kind haute couture dress, you emphasize your personality and individuality. Declare yourself by letting others know that you are an independent woman.
Safety is above all
With our Cuckoo alarm you will increase the safety of private property, life and health.
Recognition/compensation
The motivation to purchase a product or service may be the desire to receive confirmation of its value or avoid criticism.
We are not united by one price or how to develop a competitive advantage of a product without affecting the issue of its cost
Too many entrepreneurs believe that the single most powerful competitive advantage of their product can be price. If the price of a product is lower than that of competitors, then your company will instantly receive an increase in profits. And this is quite possible. But not always the company can reduce the price due to the alleged damage. And not always customers are only interested in price.
Let's consider on what characteristics of the product it is possible to form its advantages and benefits for the buyer.
Features of the product itself
The unique characteristics of the product will create its competitive advantage. They can be the main motivator to buy, even if the product is more expensive than your competitors. Benefits may include:
- Functionality;
- Corporate identity, symbols, logo;
- Appearance;
- Range;
- No need for maintenance;
- Quality dominance.
Place of sale of goods
Significant benefits for the product will be:
- Location of the point of sale of goods;
- Availability of the product;
- Display of goods;
- Ease of access to the product.
Staff and people
It can be important for the consumer who represents the product and when demonstrating the benefits in this category, they become a powerful motivator to purchase. These benefits can be:
- Employees of the company who provide free advice on the characteristics of the product;
- Point of sale staff ready to recommend or advise on the product;
- Manufacturer whose name characterizes the quality of the goods;
- Public figures advertising the product.
Is it always necessary to demonstrate competitive advantages and benefits?
In the framework of fierce market competition, demonstrating to consumers the advantages of a company, product or service and the benefits that they will receive as a result, becomes almost the only way to promote their business and work for the future. This is a fairly simple option for promoting and positioning your name, which does not require financial investments, but at the same time is an effective tool for competing. Therefore, do not ignore our recommendations, work on your competitive advantages in order to take a leadership position in your niche in the near future.
Strategic management is designed to ensure the survival of the company in the long term. Of course, when it comes to survival in a competitive market environment, there is no question that the company can drag out a miserable existence. It is very important to understand that as soon as someone from those who are associated with the company, this connection becomes not a joy, he moves away from the company, and after a while it dies. Therefore, survival in the long term automatically means that the company is quite successfully coping with its tasks, bringing satisfaction to those who enter the sphere of its business interaction with its activities. First of all, this applies to customers, employees of the company and its owners.
The concept of competitive advantage
How can an organization ensure its long-term survival, which must be inherent in it so that it can cope with its tasks? The answer to this question is quite obvious: the organization must produce a product that will consistently find buyers. This means that the product must be, firstly, so interesting to the buyer that he is ready to give money for it, and, secondly, more interesting to the buyer than a product similar or similar in consumer qualities produced by other firms. If a product has these two properties, then the product is said to have competitive advantages.
Therefore, a firm can successfully exist and develop only if its product has competitive advantages. Strategic management is called upon to create competitive advantages.
Consideration of the issue of creating and maintaining competitive advantages involves an analysis of the relationship and, accordingly, the interaction of three subjects of the market environment. The first subject is “our” company that produces a certain product. ect is a buyer who may or may not buy this product. The third killer is competitors who are ready to sell their products to the buyer that can satisfy the same need that and a product manufactured by "our" firm. The main thing in this market "love" triangle is the buyer. Therefore, the competitive advantages of a product are the value for the buyer contained in the product, which encourages him to buy this product. Competitive advantage does not necessarily arise from comparing "our" firm's product with competitors' products. It may be that there are no firms on the market offering a competitive product, yet the product of “our” firm is not for sale. This means that it does not have sufficient value for the buyer or competitive advantages.
Types of competitive advantages
What creates competitive advantage? It is believed that there are two possibilities for this. First, the product itself can have competitive advantages. One kind of competitive advantage of a product is its price feature. Very often, the buyer purchases a product only because it is cheaper than other products with similar consumer properties. Sometimes a product is bought just because it is very cheap. Such purchases can occur even if the product has no utility for the buyer.
The second type of competitive advantage is differentiation. In this case, we are talking about the fact that the product has distinctive features that make it attractive to the buyer. Differentiation is not necessarily related to the consumer (utilitarian) qualities of the product (reliability, ease of use, good functional characteristics, etc.). It can be achieved at the expense of such characteristics that have nothing to do with its utilitarian consumer properties, for example, at the expense of the brand.
Second, in addition to creating a competitive advantage in a product, a firm may be trying to create a competitive advantage in its product. market position. This is achieved by securing the buyer, or, in other words, by monopolizing part of the market. In principle, this situation is contrary to market relations, since in it the buyer is deprived of the opportunity to choose. However, in real practice, many firms manage not only to create such a competitive advantage for their product, but also to maintain it for a long time.
Strategy for creating competitive advantage
There are three strategies for creating competitive advantage. The first strategy is price leadership. With this strategy, the focus of the firm in the development and production of the product is cost. The main sources of creating price advantages are:
Rational business management based on accumulated experience;
Economies of scale by reducing costs per unit of output with an increase in production volume;
Savings on diversity as a result of cost reduction due to the synergistic effect that occurs in the production of various products;
Optimization of intra-company communications, contributing to the reduction of company-wide costs;
Integration of distribution networks and supply systems;
Optimization of the company's activities in time;
The geographic location of the company's activities, which allows to achieve cost reduction through the use of local features.
Bringing to life pricing strategy To create a competitive advantage for a product, a firm should not forget that its product must at the same time meet a certain level of differentiation. Only in this case, price leadership can bring a significant effect. If the quality of the price leader's product is significantly lower than the quality of similar products, then creating a price competitive advantage may require such a strong price reduction that it can lead to negative consequences for the firm. However, it should be borne in mind that the price leadership strategy and the differentiation strategy should not be mixed, and even more so, one should not try to implement them at the same time.
Differentiationis the second strategy for creating competitive advantage. With this strategy, the company tries to give the product something distinctive, unusual, that the buyer may like and for which the buyer is willing to pay. A differentiation strategy aims to make a product different from what competitors do. To achieve this, the firm has to go beyond the functional properties of the product.
Firms do not necessarily use differentiation to gain a price premium. Differentiation can help expand sales by increasing the number of products sold, or by stabilizing consumption, regardless of fluctuations in market demand.
In the case of implementing a strategy for creating competitive advantages through differentiation, it is very important to focus on consumer priorities and the interests of the buyer. Earlier it was said that the differentiation strategy involves creating a product that is unique in its own way, different from the products of competitors. But it is important to remember that in order to have a competitive advantage, it is necessary that the unusualness of the product, its novelty or uniqueness be of value to the buyer. Therefore, the differentiation strategy assumes, as a starting point, the study of the interests of the consumer. For this you need:
It is enough to clearly present not just who the buyer is, but who makes the decision on the purchase;
To study consumer criteria by which a choice is made when purchasing a product (price, functional properties, guarantees, delivery time, etc.);
Determine the factors that shape the buyer's idea of the product (sources of information about the properties of the product, image, etc.).
After that, based on the ability to create a product of an appropriate degree of differentiation and an appropriate price (the price should allow the buyer to purchase a differentiated product), the company can begin to develop and manufacture this product.
A third strategy that a firm can use to create competitive advantage in its product is focus on the interests of specific consumers. In this case, the company creates its product specifically for specific customers. Concentrated product creation is associated with the fact that either some unusual need of a certain group of people is satisfied (in this case, the company's product is very specialized), or a specific system of access to the product is created (the system for selling and delivering the product). By pursuing a strategy of concentrated creation of competitive advantages, a firm can use both price attraction of buyers and differentiation at the same time.
As you can see, all three strategies for creating competitive advantages have significant distinctive features that allow us to conclude that the company must clearly define for itself what strategy it is going to implement, and in no case mix these strategies. At the same time, it should be noted that there is a certain relationship between these strategies, and this should also be taken into account by firms when creating competitive advantages.