Competitive Advantage is a Fundamental Element of Marketing

Strategic marketing requires a clearly defined competitive advantage. A clear and strong competitive advantage is one of the most central elements of an entire marketing strategy. Essentially, it can form the basis of all the key areas of marketing communication, such as brand positioning, segmentation, core messaging, customer promise, etc.

The same blog post is also available in Finnish: Kilpailuetu on yrityksen markkinoinnin peruselementti

Segmentation generates competitive advantage

Different customer groups value different things. Some want service 24/7, while office hours suffice for others. Some prefer to order services online, while others like to examine them in-store. When clarifying a competitive advantage, it's important to define and differentiate a company's various target groups. Which segment do we want to excel in service provision for, and what are their needs? Which segment do we want to serve that the market currently offers limited opportunities to?

If target groups are not defined, the competitive advantage remains a pale compromise and isn't really an advantage at all.

Competitive advantage is great source material for marketing communication

A competitive advantage also helps generate interesting marketing concepts and emphasize the right aspects in content marketing. It aids copywriters in creating relevant messages and concept designers in developing engaging concepts. When the target group is clear and their needs and wishes are understood, it's noticeably easier in marketing to convert the competitive advantage into customer benefits.

A feature belongs to the company, the benefit to the customer.

Without a defined competitive advantage and strong marketing strategy, marketing efforts become short-lived tactical attempts where sales always depend on continuous (paid) advertising.

SWOT analysis and competitive advantage matrices support each other

SWOT analysis is a well-known tool in business strategies. SWOT defines a company's strengths, weaknesses, opportunities, and threats. However, for some reason, SWOT often ends up in the drawer. It might be done at the beginning of strategic work or for a financing application, but after its first presentation, SWOT analysis is rarely revisited.

SWOT analysis is closely related to competitive advantage, and it would be beneficial to treat them as complementary tools. A competitive advantage matrix crystallizes factors that are significant from the customer's perspective and clearly better than those of competitors. Additionally, it helps identify which internal aspects mentioned in the SWOT analysis require development actions and which can be maintained as is: Not all strengths bring a competitive advantage to the company, nor are all weaknesses threats.

Managing competitive advantage

Defining competitive advantage is a task for company management and a key part of the company's strategy. It's not enough to just acknowledge the competitive advantage; it must be led and developed systematically because competitors will always follow any perceived competitive advantage. If the competitive advantage is based on pricing, for example, it is managed through material purchases, production efficiency, scalability, and focus. If it's based on superior customer experience, it's concentrated on service design and managing expectations at various touchpoints.Markkinointi on vahva kilpailukeino

Marketing is an art form, and unfortunately, there is a lot of poorly marketed, similar products and services in the small and medium-sized enterprise sector. In these cases, the best marketer wins. The one who succeeds in finding the most potential target groups, optimizing paid and organic visibility, creating a positive expectation, engaging, convincing, and retaining customers, can do quite well in a competitive market even without a clear distinguishing factor. Still, the winning combination is the union of genuine competitive advantage and strong marketing.