Marketing Strategy and Competitive Positioning pdf ebook

CHAPTER 10 CREATING SUSTAINABLE COMPETITIVE ADVANTAGE
by VW). The result was the ‘Vorsprung Durch Technik’ campaign, which concentrated on 
the German pedigree of the product and, through rallying and the Quatro, on its technical 
excellence. 
Ries and Trout noted that the second firm in markets usually enjoys half the business 
of the first firm, and the third firm enjoys half the business of the second, etc. This flows 
through into profitability and return on investments where, in the long term, profitability 
follows the market share ranking of companies. Leading companies can also achieve major 
economies in advertising and promotion. Part of the reason for this is the tendency for 
people to remember the number one. When asked who was the first person to successfully 
fly alone across the Atlantic most people would correctly answer Charles Lindbergh, but 
how many people can name the second person? Similarly with the first and second people 
to set foot on the moon, or climb Mount Everest. 
The importance of being number one is fine for market leaders such as Nike in sports 
shoes, Mercedes in luxury cars, Coca-Cola in soft drinks and Nescafé in coffee, but it leaves 
lesser brands with an unresolved problem. Positioning points to a way for these brands to 
establish a strong place in the mind of the consumer, despite the incessant call for attention 
from competing products. This involves consistency of message and the association of a 
brand with ideas that are already held strongly within the consumer’s mind.
10.4.6 Summary of differentiation drivers 
Where the route to competitive advantage selected is differentiation, the key differentiating 
variables (those that offer the most leverage for differentiation using the company’s skills 
to the full) should be identified. Where possible, differentiation should be pursued on mul-
tiple fronts for its enhancement. In addition, value signals should be employed to enhance 
perceived differentiation (such as building on reputation, image, presence, appearance and 
pricing of the product). Barriers to copying should be erected, through patenting, holding 
key executives and creating switching costs in order to retain customers.
10.5 
Sustaining competitive advantage 
It will be clear from the previous text that there are a variety of ways companies can attempt 
to create a competitive advantage for themselves. Some of these will be easier for competi-
tors to copy than others. The most useful ways of creating defensible positions lie in exploit-
ing the following. 
10.5.1 Unique and valued products 
Fundamental to creating a superior and defensible position in the marketplace is to have 
unique and valued products and services crafted through the use of scarce and valuable 
organisational resources to offer to customers. 
Dow Jones maintains high margins from unique products. The Wall Street Journal is 
a product that customers want and are willing to pay for. Central to offering unique and 
valued products and services is the identification of the key differentiating variables – those 
with the greatest potential leverage. 
Uniqueness may stem from employing superior, proprietary technology, utilising supe-
rior raw materials, or from differentiating the tangible and augmented elements of the 
product. 
Unique products do not, however, stay unique forever. Successful products will be 
imitated sooner or later, so that the company that wishes to retain its unique position 
must be willing, and indeed even eager, to innovate continually and look for new ways of 

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SUSTAINING COMPETITIVE ADVANTAGE
differentiating (see Chapter 12). This may mean a willingness to cannibalise its own existing 
products before the competition attacks them.
10.5.2 Clear, tight definition of market targets
To enable a company to keep its products and services both unique and valued by the cus-
tomers requires constant monitoring of, and dialogue with, those customers. This in turn 
requires a clear understanding of who they are and how to access them. The clearer the 
focus of the firm’s activities on one or a few market targets, the more likely it is to serve 
those targets successfully. In the increasingly segmented and fragmented markets of the 
2020s, the companies that fail to focus their activities are less likely to respond to changing 
opportunities and threats. As Sarah Mansfield, Unilever vice-president of global media for 
Europe and the Americas, puts it: ‘What we say is it’s a journey from mass reach to mass 
customisation to mass personalisation. It’s about reaching large audiences but doing it 
in a really smart way.’ To achieve this requires ‘understanding consumers, their traits and 
behaviours, to identify actionable targeting segments for which we can develop different 
messages’ (Barnett, 2018).
10.5.3 Enhanced customer linkages
Creating closer bonds with customers through enhanced service can help establish a more 
defensible position in the market (see Chapter 13). As suggested previously, a major advan-
tage of JIT manufacturing systems is that they require closer links between supplier and 
buyer. As buyers and suppliers become more enmeshed, so it becomes more difficult for 
newcomers to enter.
Creating switching costs, the costs associated with moving from one supplier to another, 
is a further way in which customer linkages can be enhanced. Hagel, co-chairman for 
Deloitte LLP’s Center for the Edge, in an interview with The Marketing Journal (2016), 
argues that technological advances such as Big Data and cloud computing enable what he 
calls a ‘trusted advisor’ business model:
Companies that master the techniques of collaboration marketing will start to build more 
trust with customers based on their increasing helpfulness in addressing the customer’s 
needs. Companies traveling this path will ultimately need to make a very difficult choice if 
they are truly going to win the deep trust that they will need from the customer. They will 
eventually need to shed their own product businesses to reinforce with customers that they 
are truly impartial in terms of evaluating the full array of products and services that might 
be relevant to their needs.
Rather than staying wedded to traditional push-based marketing approaches that focus 
on intercepting, isolating and insulating the ‘target’ customer, collaboration marketing har-
nesses the power of pull to attract customers, motivating them to seek you out because 
you are becoming more and more helpful, assisting them to get more value from the prod-
ucts you’re selling. One of the most effective ways to be helpful to customers is by mobi-
lizing a large number of third parties who have complementary products and services that 
can help the customer get more value from your own products and services (Hagel, 2016).
10.5.4 Established brand and company credibility
Brand and company reputation are among the most defensible assets a company has, pro-
vided they are managed well and protected:
Nike have an enviable reputation for superior quality workmanship over the world. Nike 
is emphasizing its digital transformation, rolling out its Nike app in stores and launched a 
new concept, called Nike Live that makes use of its Nike+ membership scheme to offer 

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