What is Competitive Advantage Marketing?

Competitive advantage marketing is a marketing strategy in which a business aims to gain an advantage in the market by giving the customer more for his money. Businesses using the competitive advantage marketing strategy often use a combination of tactics to gain advantage in the market. Common tactics include offering a lower price than competitors or offering upgraded features that give the product or service a greater value than the competition. Effective competitive advantage marketing often includes anticipating or reacting to threats within a market.

Fields in which a company can make gains using competitive advantage marketing include price, innovation and catering to a niche. Price can be a strong draw for a company seeking new customers, but a lower price means reduced profits on each sale. Some companies temporarily lower their prices in order to attract new customers, and sometimes even take a loss on a product to gain a competitive advantage that makes the company a contender in the market. A company can also gain competitive advantage by offering the most innovative product with the newest technology for consumers who like to buy the newest and most advanced product on the market. Catering to a niche means finding a specific small market and focusing on it.

Companies seeking a competitive advantage can often look to the production process for a price advantage that can be used in competitive advantage marketing. Operating more efficiently than other companies can reduce the cost of production, allowing the company to offer a lower price than the competition. A company that streamlines its production processes so it minimizes cost makes a larger profit on the same product sold at the same price. Another way a company can improve efficiency or reduce costs is in the supply chain. For a retailer, negotiating with suppliers to get a lower price on products can give a company a lower price on goods, allowing them to sell their products at a cheaper price than competitors who were not able to negotiate for a lower price.

Most companies have some kind of competitive advantage in what makes them stand out from other companies. Finding out what makes a company more valuable to some consumers than another company and using that advantage to gain customers and income is the basic stuff of competitive advantage marketing. For some organizations that offer a lower price to attract consumers, their competitive advantage is having the supplier connections, infrastructure, or negotiating skills to get the products they sell at a lower price than their competitors.