Page 63 - Marketing the Basics 2nd

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make a profit, then it becomes difficult to argue they should not be allowed to pursue activities that maximize their product’s chance of economic success – so long as no laws are broken.
A less controversial approach would be to position the firm, not the product, as either a product leader, operationally excellent or customer-responsive. It has been observed that a firm cannot excel in all three categories. Being a product leader means the firm must continually advance the technological frontier. This requires large investments in R&D, which need to be recouped later on, making it very difficult for a firm to be a product leader and the lowest cost producer. What’s more, firms that are customer-responsive try to tailor their product offering to exactly match the customer’s wants. The more customized the product, the higher the cost of production, which once again makes it very difficult for a firm to be operationally efficient and customer responsive.
As such, firms that are seeking to position themselves must follow the following four rules:
1 Develop a leadership position in one of the three positions.
2 Preserve a satisfactory level of performance in the other
categories.
3 Continue to improve on the leadership position the firm
occupies.
4 Improve on the other two positions to keep aligned with
innovating competitors.
IDENTIFY POSSIBLE COMPETITIVE ADVANTAGES
After identifying all of a product’s potential sources of competitive advantage, managers must decide which will be promoted as a means of differentiating their product from their competitors. Differentiation is the process of adding a set of meaningful and valued differences distinguishing the company’s product offering from other substitutes.
One approach suggests the firm promotes only one benefit. By offering a consumer a unique selling proposition vendors can develop one consistent positioning message enabling buyers to associate quickly the product with the promoted feature. Though