Sustainable Competitive Advantage and Product Differentiation

In previous articles, I have endeavored to cover various aspects of the personal care market in some detail. Readers should never forget the importance of embracing the “big picture” and manipulating the strategic marketing principles that comprise the foundation of what makes a product truly successful. One of the most enduring maxims in modern marketing is the fact that, in order to maintain a desirable level of differentiation with regard to competitive or substitute offerings, a product must enjoy one or more major sustainable competitive advantages. As any student of marketing science knows, this can be achieved by thoroughly analyzing and applying the elements of the “marketing mix” or “Four P’s” of marketing (product, price, place, and promotion) as they relate to meeting the needs of the target market and offering certain advantages over other alternatives.

Regardless of where you are in the supply chain-- supplier, manufacturer, intermediary, or retailer—contemporary marketing science dictates that you must develop your product in response to a recognized “need” by the user, and that you must not simply make a product and then find a market for it. Not only that, but everyone in the supply chain must develop a thorough understanding of the end user’s behavioral, attitudinal, and demographic characteristics so that the right products can be delivered to meet the best opportunities. Importantly, the role of the supplier, personal care or otherwise, has changed recently to reflect the fact that manufacturers and marketers are looking for more turnkey solutions, including end-user product ideas and rigorous testing for efficacy, safety and stability so that suppliers can prove that their ingredients are relevant.

Proper application of marketing’s “Four P’s” apply to everyone making and selling goods and services. Future articles will cover each of these “P’s” in greater detail, and I have attempted to very briefly summarize the importance of each here:

Product: Marketers are actively engaged in developing products that their customers truly need. They pay careful attention to the features and benefits of the product as it is being developed and ensure that it is adequately differentiated from alternative offerings so that they can present a “value proposition” or at the very least a good reason to purchase the product in the first place. Suppliers must apply the same principles when marketing ingredients, as manufacturer/marketers must do for their end-user brands.

Price: Marketers can further differentiate products through application of a variety of pricing strategies, and it is true that many natural personal care players are not able to achieve the volume levels necessary to be the low cost leader. Yet, there are dozens of other ways to position a product strategically via pricing, and companies must pay careful attention to the target market and the competitive environment, as well as a variety of external factors including the regulatory, economic, technological, and social inputs when choosing the strategy that best fits their product.

Place: Distribution channels are also an important way to achieve sustainable competitive advantage. Some products are available only in specific channels while other products are available in multiple channels. Where the marketer chooses to offer the product often dictates what happens with the other elements of the marketing mix and can provide further differentiation.

Promotion: Marketing communications (MARCOM) strategies, mediums, and particular vehicles serve to convey these advantages and points of differentiation to the target in the form of words, images and other symbols. The preferred result of this process is a distinguishable brand identity and image, which must be established, enhanced and defended at all costs.

The market is in a constant state of flux, and organizations throughout the supply chain must endeavor to continually manage the marketing mix to anticipate and meet the changing needs of the marketplace. Any plan that is developed must be implemented properly, controlled to ensure adherence, and subsequently evaluated to identify what is effective and what is not. This is no easy task, but maintaining a thorough understanding of this dynamic process so as to achieve sustainable competitive advantages through differentiation will increase your chances of long-term success.

Darrin C. Duber-Smith, MS, MBA, is president of Green Marketing, a Colorado-based strategic planning firm offering marketing planning, marketing plan implementation, and other consulting services to natural products companies in all stages of growth. He has 15 years of specialized expertise in the natural products industry and is also Visiting Assistant Professor of Marketing at the Metropolitan State College School of Business in Denver, CO, as well as executive director of the International Association of Natural Product Producers. He can be reached at [email protected].

Hide comments


  • Allowed HTML tags: <em> <strong> <blockquote> <br> <p>

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.