How Does Branding Provide a Competitive Advantage?

What do we mean by a competitive advantage? What are the ways to define to them for your own business? Here is a guide on how branding is important to business and importance of competitive advantages, including the brand.

What is a Competitive Advantage? 

 

A competitive advantage is that the one thing your company does better than any of your competitors. It's the key differentiator that defines your brand against all others. Philip Kotler, who some call the daddy of recent marketing, defines competitive advantage as "a company's ability to perform in one or more ways in which competitors cannot or won't match."

 

There are a variety of useful propositions that companies often cite as competitive advantages. These include:

 

  • Price
  • Speed of delivery
  • Speed to plug
  • Technology
  • Design
  • Scale
  • Customer service
  • Personalization
  • Experience

 

The problem is few individual value propositions are defensible as a competitive advantage. And albeit they're tenable at the instant, they're rarely sustainable over time. Are any of the above value propositions sustainable for the end of the day, in and of themselves? Let's check out a few, starting at the top: price.

 

Even if you claim to supply rock bottom cost products or services in your vertical, can this claim withstand the entry of the latest competitors to the market? Price as a competitive advantage quickly becomes a race to rock bottom and intrinsically isn't a sustainable competitive advantage.

 

What about the speed of delivery? Amazon is currently investing billions of dollars to supply free one-day shipping for all Prime members. It isn't just price and delivery. The matter with choosing a personal value proposition as your competitive advantage is that there'll always be the likelihood of another brand with a superior claim. Singular value propositions are rarely sustainable competitive advantages. And therefore, the best thanks to creating a sustainable competitive advantage is to develop a multifaceted framework of differentiators.

The Competitive Advantage Framework

 

By developing a multifaceted framework that comes with quite one differentiator, you're more likely to find a competitive advantage that's own able and sustainable.

 

We often ask our clients to seem at three factors when it involves defining their competitive advantage:

1. Value – what's the important value you provide?

 

Your products or services might offer your customer dozens of features or benefits, but what, ultimately, is that the problem they solve? For instance, if you offer an analytics platform, the bells and whistles that make your product unique don't constitute the important value it provides. Its real value lies within the confidence it offers your customers to form informed business decisions.

2. Customers – What do your customers truly need?

 

There are tons of things your customers like. When the economy goes well and abundance is widespread, customers can pay for all kinds of cool features that are nice to possess. But what is going to, they still need when subsequent recession inevitably rears its ugly head? What does one provides that's indispensable to your customer's business?

3. Competition

 

What is the important value you provide that your customers truly need, which nobody else does nearly as good as you? Answering these questions may be a surefire, thanks to developing a sustainable competitive advantage. You'll offer the most valuable product globally, but if your customers don't truly need it, it isn't a competitive advantage. Otherwise, you could offer a service that meets an urgent need of your ideal customer, but if a competitor can fill an equivalent need with superior service, it isn't much of a plus in the least.

 

At the top of the day, there could be nine things your company does exceptionally well. Your customers might desperately need three of them. But just one of those, you are doing better than anyone else. This is often your competitive advantage. That's the framework that meets what business author Brian Tracy says are the last word criteria for any competitive advantage: a proposition that's "perceivable, promotable, and something the market can pay for."

 

The brand is that the Ultimate Competitive Advantage

 

Defining your competitive advantage may be a critical step for any brand. But it's just one step of the many. The sole thanks to getting the foremost out of a well-defined competitive advantage are building an equally strong brand around it. At the top of the day, a robust brand is that the ultimate competitive advantage.

What's a robust brand? Multinational marketing research firm Kantar Millward Brown defines a robust brand together that is:

 

Meaningful: It appeals more, generates greater love, and meets customers' expectations and wishes.

Different: it's unique in a positive way and stays before the curve for the buyer's advantage.

 

Salient: It involves the mind spontaneously because of the brand of choice for key needs.

 

What is Apple's ultimate competitive advantage? It's brand. Its brand has given Apple increased pricing power, enabling it to dictate prices without the danger of losing brand-loyal customers. The decades of methodical brand-building into which Apple has invested have paid off exponentially. Apple is the case in which brand-building drives long-term profitability was much more effective than short-term, data-driven marketing initiatives. That's why the last word, competitive advantage is your brand.

 

Conclusion  

 

Branding provides competitive advantages for any businesses. Even as critical is clearly articulating your competitive advantage to your audience. For many businesses, however, a singular value proposition like price or speed of delivery will never be sustainable as a competitive advantage.

 

Developing good framework for business is necessary. Competition against the best approach will be defines as competitive advantage. However, at the top of the day, no competitive advantage is as powerful or sustainable as a robust brand.

 

Brand will enables to compete over the competitors. Is Starbucks the world's best cup of coffee? Not by an extended shot. Will many people leave their thanks to paying $6 for a cup of Starbucks coffee tomorrow morning? Without a doubt. What are they driving a touch farther and paying a touch more for? The solution is simple: brand.