Competitive advantage

Competitive advantage is a feature of a business's offer that makes customers choose it instead of rival businesses. It answers the customer's question: why buy from you rather than the shop, website or brand down the road?

Building it through the mix

Advantage can come from any element of the marketing mix. A product can be better made, more distinctive or have a feature rivals lack. Price can be lower than competitors, or higher but clearly better value for what you get. Promotion can reach and persuade the target customer more effectively. Place can mean the product is easier to buy, backed by helpful staff or quick delivery.

For example, an independent bike shop, Northside Cycles, offers free lifetime servicing on every bike it sells. The large chain across town has cheaper bikes, but a rider who buys there pays for every repair, so Northside competes on the quality of the after-sales service that comes with the bike rather than on price.

Why several elements together work better

Improving one element alone gives only a limited advantage, because a rival can copy it. A price cut can be matched within days, and an advert can be imitated with a bigger budget. Using several elements together, so the overall offer is stronger than any single part, gives a greater and more lasting advantage, because a competitor must now match all of those things at once.

Northside pairs its free servicing with trained mechanics customers can talk to, honest pricing that is not the cheapest, and repair videos online that build trust. Copying any one of these is easy; copying the whole package is not.

Price is not the only route to competitive advantage, and a low price is often the easiest for rivals to beat. It is quick to undercut, and it can damage a premium image, leaving customers to assume the quality is low too.