Post on 18-Jan-2016
transcript
Competitive Advantages
March 2, 2010
Guitar Hero Example
Next: Rock Band
Next: Guitar Hero World Tour
Competitive Advantages
Business look for advantages over competition Some may be temporary
Eg. Rock Band/Guitar Hero, Coke Zero/Pepsi Max, Quiznos/Subway
True competitive advantage is sustainable
Sustainable Competitive Advantages
Methods by which a business holds on to its customers in spite of competition
How? Unique selling proposition Lower production costs Servicing a niche market Creating customer loyalty
Unique Selling Proposition
Remember:
What happened?
- In 2005, EA signed an exclusivity deal with the NFL- Exclusive rights to use teams,
players, stadiums in a video game- This is a unique selling proposition
Unique Selling Proposition
Why would a customer buy from me instead of others? Must be something a competitor
could not duplicate easily Eg. Patent, licensing.
Lowering Production Costs
Use cost-efficient, high-tech systems and processes to reduce costs. Eg. Building a plant outside of the
country – lower resource costs, few taxes, lower cost of living that reduces labour expenses.
What if other companies do not want to relocate?
Serving a Niche Market
If a marketer recognizes an opportunity to create a niche market, and takes advantage of the opportunity.
Burrito Boyz Burrito Boyz served
niche market in Toronto/Mississauga
If a new competitor opened, I would have to be convinced the product is superior to Burrito Boyz before switching
Creating Customer Loyalty Are there any brands or stores that you
are particularly loyal to? Eg. Mr. Fortuna -> Nike shoes, Rawlings
baseball gloves Bank customers
Customer develops strong relationship with product retailer, and won’t consider another unless a mistake is made.
Non Sustainable Competitive Advantages
Promotion Placement Quality Benefits of Use Price Design Features
Promotion
Place brands in minds of consumers Eg. Roll Up the Rim to Win
Top of the Mind Awareness: Consumer is most likely to think about one brand of product or service before another.
Can you think of any examples?
Placement
A product must be there to purchase in order to compete. Eg. Placement in grocery stores, Wal-
Mart Exclusive distribution
Look at Bishop Tonnos – see any Pepsi machines?
Box Stores (Category Killers)
Quality
Businesses are trying to make their products better. Research & Development – continual
improvement Some businesses compete by
providing low quality merchandise Children’s clothes
Benefits Of Use
Value is not the product itself, but what it will do. iPhone – benefit is the apps and all
the things they do for people A product that can do more or
perform better than another has a competitive advantage
Price
Features being equal, price is only a competitive advantage if it is lower Not sustainable. Competitors can
always lower their prices as well. Image pricing
Eg. Cadillac, Mercedes
Design Features
Influences how a product looks and what it does Eg. Fashion
Packaging Mayonnaise?