Entrepreneur Marketing: Innocent Smoothies



Entrepreneur Marketing: Innocent Smoothies



Task

Positioning and segmentation: Why we Selling and why customer buy

Distinctive Competence and Sustainable Competitive Advantage

Sustainable competitive advantage is the Holy Grail that most entrepreneurs continually pursue. If a way can be found to continually be ahead of competition, then the venture will probably return higher than normal returns to its owners. Being ahead of competition means that the venture can more easily sell more, and/or charge higher prices, and/or have lower costs than “normal” firms. Let's look at competitive advantage from an entrepreneurial marketer's point of view. As you will see, the entrepreneurial marketer's point of view is the customer's point of view. Your competitive advantage is why the customer or potential customer will more likely buy from you than from your competition. If you have succeeded in developing a competitive advantage that is sustainable from competitive encroachment, you are creating sustainable value.

Distinctive competence is how some people refer to the advantage that is the source of the sustainable competitive advantage. If the advantage is sustainable, then your venture has something that is difficult for your competition to emulate and must be somewhat distinctive to your venture. What are sources of distinctive competence for entrepreneurs that might be sources of sustainable competitive advantage? Creative entrepreneurs seem to be finding new distinctive ways to get customers to prefer them to the competition. Here are some of them:

Many companies use technology to obtain competitive advantage. Patents and trade secrets are weapons to keep the competition from imitation. For software companies, source code for their products is a key competitive advantage. Priceline.com has a patent on their method for having consumers try to name their own price for goods and services. This is a great source of sustainable competitive advantage.

Other companies may rely on excellent design, perceived high quality, or continual innovation, as distinctive competencies. Others will use excellent customer service by loyal employees who have adopted corporate service values. Southwest Airlines is an excellent example of a venture that differentiates itself from competitors with both excellent customer service and technology for scheduling and turning flights around. Many consumers fly Southwest, not only because it is economical, but because it is fun. Many other airlines have tried to imitate Southwest and have been unsuccessful.

Reputations and other differences in customer perception of products, services, and companies can be extremely valuable sources of sustainable advantage. If consumers perceive you as being a preferable source, they will be more likely to choose your products or services. Dell's service reputation as well as its business-to-business salesforce have succeeded in getting many customers to perceive them as a trustworthy, reliable resource for computers and related equipment and services. As a result, Dell has also been difficult to compete with.

Segmentation and Targeting

The positioning and segmentation decisions are typically developed together. Although we will take them one at a time, we consider the interrelationships as we go. Conceptually, segmentation is a process in which a firm's market is partitioned ...