Important and Credible Non-Price Competitive Strategies - Coursework Example

ADVERTISING & MARKETING AND INVESTMENT IN RESEARCH & DEVELOPMENT AS IMPORTANT AND CREDIBLE NON-PRICE COMPETITIVE STRATEGIES Institution Submission Date Introduction Businesses are established with the aim of achieving the set goals and objectively in the most effective and efficient manner. In this case, business owners have a duty to ensure that they invest in strategies and diverse approaches that can enable them maximize their returns, cutting down on costs as much as possible1. Businesses that manage to reduce their costs while maximizing their returns are those that end up being highly successful, controlling a substantive market share. In this case, it is important to note that systems and structures designed by the business to reduce its operating costs is an important advantage to the firm. Before relying on any strategy, businesses owners have to ensure that they invest in a fact finding mission; this mission involve conducting effective research and development activities continually to keep in line with the changes in consumer preferences, competitive strategies and other factors in the external environment that can affect effective and efficient business performance. They often consider how their strengths can tackle weaknesses in their internal environment as well as how they can take on the opportunities presenting in the environment while countering the emerging threats as well2. This paper examines the importance of marketing and advertisement as well as research and development as important competitive strategies in the business, focusing on how they can be used as effective and credible non-price competitive strategies. Creating competitive advantages in the business Competitive advantages often occur when the business organisation develops or acquires certain attributes that enable it to perform better than its identified competitors do. Some of these attributes include ability to access some natural resources or key raw materials that other competitors depend on but do not have that kind of access. It could also be access to cheap and sufficient power or having certain kinds of skilled experts or technology, which enable it to cut down its costs. Businesses that have these attributes can effectively reduce the price of unit costs of its products, thus having increased returns from its high turnover. These businesses often grow to enjoy economies of scale; they can therefore buy goods in bulk and enjoy discounts from their suppliers3. On the other hand, businesses that have not realized these competitive strategies often struggle in their businesses. Some of them struggle attracting customers because of the reduced priced prices of similar products from businesses that have lowered those prices because of these competitive strategies. In the end, businesses that have high operation costs find it difficult to operate effectively in the market, because customers always want where they can get quality products at reduced prices, thus opting for those business that have economies of scale because they can fulfill this need. Therefore, it is evident that business that manages to cut down on its costs while maximizing on its returns manages to be successful because these are important and effective competitive advantages. Types of competitive advantages It is important to note that factors that determine success and effective performance in businesses vary from one business to another depending on the industry. In this case, competitive advantages in businesses are not the same. Therefore, it is the duty of business owners and managers to ensure that they develop their strategies, which they think can apply to the business and enable it to maximize its expected returns. As noted above, competitive advantages often exist when it can deliver similar benefits like its competitors but at lower costs. These are referred to as cost advantages. Alternatively, competitive advantages for the business can mean delivering benefits that are beyond the competing products, also known as differentiation strategies. Therefore, it is generally acceptable that in businesses, a competitive strategy makes it easy to achieve superior value to its esteemed customers and profits for itself4. Differentiation and costs advantages in a business are referred to as positional advantages because they provide a description for the business’ position in the particular industry as a leader in the differentiation strategies or costs5. On the other hand, the resource-based perspective emphasizes that a business relies on resources and its capabilities in creating these competitive advantages, which ultimately ends up in producing the much-needed value creation. Fig. 1. A model of a business’ competitive advantages6. Non-price competitive advantages Non-price competition refers to the marketing strategy where the business attempts to differentiate services and products from the competing products on grounds of such factors like workmanship and design. Additionally, the business often tries to differentiate its products by offering quality products and services, focusing on the specific needs of the customer, extensive distribution among several other sustainable competitive advantages apart from price. Non-price strategies differ with price strategies where the business differentiates its products and services from the competing products depending on the flow prices. In general, most non-price strategies comprises of promotional expenditures like advertisements, sale promotions, special orders, coupons and free gifts among many others. It also involves development of new products, brand management and market research among others that do not emphasize on price aspects. Many firms prefer undertaking the non-price strategies despite the additional costs that they have to incur7. This is because; the strategies are often profitable compared to when the business would have lowered its prices. In this case, the business is in a better position to avoid price wars with its competitors. In as much as many business organisations may often try to engage in non-price competitions, these strategies are commonly used with monopolistic competitions and oligopolies because firms, in most cases happen to be highly competitive. Advertisement and marketing as a non-price competitive advantage Marketing and advertisement are important business strategies often used in the process of providing information about the availability of the business in market, as well as the goods and services that it offers to the market. Both strategies are non-price competitive strategies used by the business to ensure that customers are effectively aware of the products and services being produced and sold. Advertisement and marketing strategies provides information about other features that customers can get from the products being sold at the market. In this case, customers can make their purchase decision depending on the information they have because of these activities. Therefore, business owners are supposed to ensure that they develop their strategies in this particular understanding. Advertising As a form of non-price competition strategy, advertising can be described as the kind of marketing communication that are aimed at persuading selected audiences to begin or continue with the actions they are involved in, especially with respect to products and services for consumption. In this case, it is evident that advertising is mostly for commercial offerings, ideological support or for political ambitions. Overall, the main aim in the advertisement exercise is to provide a reassurance to employees or company shareholders that the business is successful or viable. Advertisements are mostly done in both the print and non-print media. Some of the most commonly used advertisement media include television, radio, newspapers, magazines, direct mail, outdoor advertising among many others. Currently, advancements in information and technology have brought various changes in the way businesses create and manage their marketing and advertisement exercises. The marketing department in the business develops the advertisement and pays for it to be aired on television or played over the radio. The same applies for advertisements that have to feature in magazines, newspapers, outdoor events among many others. Alternatively, the business may also create these advertisements to show them in its website and other social media. The importance of advertising as a non-price competition strategy Generally, it is important to note that the main objective of the advertisement process is to have an increase in the volume of sales for the products and services that the business is developing for sale. When the clients are fully aware of these products, it is expected that they will make their purchase decisions in this understanding. The advertisement exercise popularizes the business’ products thus causing consumers to love to purchase them. In this case, a business that engages in this exercise is better placed to experience increased sales compared to that which does not. Therefore, by depending on this strategy, the business does not need to change its prices or engage in price wars with its competitors. One of the advantages with this kind of non-price competition strategy is that it makes the business’ products and services familiar to its targeted audience. When the products are market-oriented, then the business does not struggle making sales, thus creating and increasing its substantive market share. Advertisement is also important because it creates the goodwill and a desirable image to its clients. In this case, customers will always have a desire to identify with the business’ image, because they believe it is very effective in articulating its needs in the market. Advertisement plays an important role in educating and informing the public about important product features in the market. In this case, the process explains about the qualitative aspect of the products being designed, their prices and where they can get them. This important factor influences the purchasing behavior of clients in the market. Having this information, customers are often forced to make more inquiries about the products and services being sold. In this process, they end up buying these goods and services. Marketing Marketing strategy, as used by businesses in the process of making competitive advantages refers to the process of increasing the sales for a certain business’ product or creating competitive advantages through certain communications8. Marketing strategies comprises of all the fundamental and persistent activities in the marketing sector that are concerned with analyzing the company situation and formulating, evaluating and selecting the necessary market strategies. All these activities are supposed to contribute to the overall goals of the company and the set marketing objectives. Some of the important techniques used in the marketing process include choosing of the particular target markets through an effective market analysis exercise and segmentation. Additionally, understanding the consumer behavior and patterns including advertising of the value of products and services to clients are all necessary techniques in the marketing process. Importance of marketing as a non-price competitive strategy When viewed from the societal perspective, marketing can be described as the association between the material requirements in the society and the various economic patterns in response. In this case, marketing plays an essential role in satisfying these needs and other kinds of wants though various exchange processes and development of lasting relationships. Marketing blends the various kinds of applied sciences like behavioral science and art, making use of different forms of information and communication technology to achieve its goals and objectives9. One of the main advantages of relying on marketing orientation as a way of creating competitive advantages is that it enables employees to be actively involved in the process of customer satisfaction and achievement of the set mission and vision. In this process, the top management has to keep emphasizing the needs of the target market and satisfaction of these customer needs as matters of top priority in the production and marketing exercises. When the business is fully committed to developing products that customers need, then it is obliged to produce quality products that can guarantee maximum returns. Therefore, the marketing department has to ensure that it undertakes marketing research on a continuous basis in order to understand the changes in the market and working to fulfill these emerging issues. Research and development In business practices, research and development makes up a very essential strategy towards understanding the needs of the market. In this case, the business can effectively produce goods and services that can fulfill the identified needs. Research and development in the business enables it to keep a sharp eye on the activities of competitors10. This way, it can develop its production processes in tandem with the emerging trends. Research and development exercise is often very expensive to create and manage; therefore, the business has to prepare itself adequately to involve in it. The difficult aspect of this process is that most often the researchers lack the advance awareness of how to effectively finish and achieve the expected result. For this reason, higher spending in the research and development exercise does not often offer a guarantee that a great market share and profits will be achieved from this exercise. As a non-price strategy, research and development enables the business to devise various strategies in its operations that can cut down its operation costs and increase its returns. This is because; the information derived from the field is important in the process of creating market-oriented products that are according to the identified needs and objectives of its customers. Another advantage of marketing is that it offers information about the strategies used by competitors in the process of creating their market share. Recommendations The business environment is very dynamic, having various factors that keep on changing with each passing day. Some of these factors increases the operating costs of doing business, thus posing major threats to the success of the business. On the other hand, the business environment may have certain changes that can be valuable to the business as credible opportunities. In this case, the duty of the business managers is to ensure that they actively involve in activities that can help them understand these changes and design strategies to increase their competitive advantages. Business owners have to ensure that employees are actively involved in this process because, they are expected to work in line with these changes as identified in the environment. Non-price competitive advantages are very reliable in ensuring that the business becomes successful in its activities without having to engage in price wars and other aspects of unfair competition with its business competitors. Additionally, engagement in these activities is important because the business can effectively increase its returns compared to its rivals that have to lower their prices. In increasing its competitive advantages, the business needs to ensure that it finds cost effective ways of undertaking advertisement and other marketing activities to increase their clients’ awareness of the products and services they buy11. In this case, they should consider the methods that have been brought about by technological advancements, which are cheap and easily available. Bibliography Annacchino, M. 2007. The pursuit of new product development the business development process. Butterworth-Heinemann, Amsterdam. Baisya, Rajat. 2010. Winning strategies for business. Response Books, New Delhi. Barrow, P. 2009. Essential business finance a complete guide to starting, expanding and selling your business (2nd ed.). Kogan Page, London. Davis, S., & Batiz, L. 2005. The climate for business development and employment growth in Puerto Rico. National Bureau of Economic Research, Cambridge, Mass. Grandville, O. 2011. Economic growth and development. Emerald, Bingley. 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