For exceptional services to be delivered to customers, and for business to crab market share, it must embrace continuous innovation, respond to customers and use customer’s ideas. A product that consumers perceive to be new and different from existing product is identify as product innovation (Solomon et al., 2009). In agreement, Kotler and Keller (2009) identify innovation as any good, services or idea that is perceived by consumer as new.
However, competition has been at the heart of cooperate strategy for the past twenty-five years, which has led to a significant element (competitive strategy, building competitive advantages, competitive benchmarking and beating the competition) that business organisation needs to consider in today’s marketing strategy to be able to break the barriers of emerging markets around the world (Kim & Mauborgne, 2005; Porter, 2008). The key questions is: how can company break this barriers when the market supply is higher than consumer demand? In addition, what can a company do in a market where there is a large number of competitors? As ascertain by Kim and Mauborgne (2005) that inability of brands to differentiate each other on their market is an issue in today’s market. For example, in products and positioning benefits, brands are becoming similar, in terms of answering the same needs, with the same features. Furthermore, mobile phones and other technology appliances such as; Samsung products, apple products, google products, amazon products are different products that answers the same needs.
Porter (1985) support this example by defining market as several companies competing against each other to answer their consumer needs. Competitive advantage strategy is a strategy that makes a company looks better than the competitors in their consumer minds or in search of favourable position among its competitors (Porter, 1985). However, Porter provide three determinants that companies need to know before it can describe its competitive advantage which are, benefits (company must be clear on the benefits of its products and must be what consumers truly need and must offer real value), target market ( company must know who buy its products and how to make consumer life better, this create demand and driver of all economic growth), and lastly competitors. He provides a contemporary approach to corporate strategy. He also identify three generic strategic approaches that company can follow to surpass other firms: cost leadership, differentiation and focus as shown in figure 1.
Porter argues that each of these strategies have limitations even though if these strategies are widely used in today’s company and are limiting the industry evolution. Furthermore, for a business to be able to compete in today’s market supply chains must be contrived to match product characteristics and customer requirements (Aitken et al., 2003).
Product requirements change dramatically as it proceed through its life cycles. For example, Apple products development and decline of its first generation. However, this shows that continues innovation in any product is very important in an ever-changing consumer world (see figure 1. 2a and b for apple product life style). On the other hand, McDonald’s have been able to take over the market by constant innovation. Although, McDonald’s is at its maturity stage, because of it continuous innovation in technology, menu innovation, and constant renovation of stores and new products to be able to meet with the current consumer demands and millennial demandsKim and Mauborgne introduced a unique strategy for creating commercially relevant new market space in 2005 called Blue Ocean strategy. However this strategy can be used to address issue of competition within the industry with the aim to gain insight by reconstructing existing market boundaries by creating a new market where the competitions is low or null and by exploring noncustomers (Kim and Mauborgne, 2015).
In addition, it create uncontested market space and make the competition irrelevant. Furthermore, Blue Ocean requires breaking the value-cost trade off to open up new market space by pursuing differentiation and low cost simultaneously and also driving costs down while simultaneously driving up buyers. By contrast, it is opposed by the usual market definition ‘Red Ocean’, where the market rules are known, boundaries of market are defined, and the firms competing to surpass each other’s. It pursue both differentiation and low cost all together by reconstructing market boundaries (Kim and Mauborgne, 2015). However, this strategy and Porter’s (1985) three determinants satisfies the human need for self-actualisation and the desire for innovation and newness. For example, company like Nokia, blackberry, and newspaper were slow to respond to the availability of newness or innovation which cause the company to be disruptive. However, Companies such as Apple, Amazon and Goggle has embraces this idea of “creating demand rather than fight for it” (Kim & Mauborgne, 2005). Apple have been the first to introduce on the market a phone using a tactile interface, and connected to internet in 2007 (Apple, 2007).
Apple has since then change the way society communicate, and is now the source of blue ocean market such as social app (Facebook, Instagram, YouTube, snapchat and WeChat), shopping app (Amazon, eBay). By developing a blue ocean strategy it provides the company with barriers to limitation, as it is not a static achievement but a dynamic process (Kim & Mauborgne, 2005). Apple products helped discourage imitation for a while. Hence, alternative products like Samsung took three years to come up, this gave Apple the opportunity to position its market place into the customer’s mind and a lead in smartphone innovation that enables them to perfect their products for production, distribution, and product features (DigitalTrends, 2013). Thus, for a company to create a Blue Ocean it must make its competitors in Red Ocean irrelevant via value innovation (Kim & Mauborgne, 2005). Nevertheless, Porter (2009), identifies the importance of 4Ps in business as an important controllable variables that can influence a buyer’s response and can help a company develop a unique selling point as well as a brand image.
However, there has been a growing deliberation about the relevancy of the market mix theory in today’s market place and more emphasis should be applied towards relationship marketing (Grönroos, 1994; Zineldin and Philipson, 2007). According to Zineldin and Philipson, (2007) 4Ps strategy are still dominating in many company. In the research they conducted it shows that different company still use the 4Ps strategy supporting it with relationship approach. In support to 4Ps strategy, a company can strive to survive if it only focus on relationship marketing. Because if a company only focus on how it can retain customers and customer satisfaction, it might not survive in a competitive market. On the other hand, a company can survive in competitive market if it adopt market mix theory.
However, it might not be necessary for company to focus on relationship theory without considering market mix theory, it is certainly beneficial to look at the extended 7Ps with the additions of physical evidence (the business is in to be more competitive with the rivals in the business), people (representative of the business, for example having the right people is essential because they are as much a part of the business offering as the products and services the business offers), process, (the way customers connect with product and services the business offers and the delivery of the business services) (Armstrong et al, 2015; Bitner and Booms, 1982; Kotler and Armstrong, 2010; Gronroos, 1994) (see figure 1.2 for an example of 7Ps applied to McDonald’s.). The America Marketing Association defines brand as a ‘name, term, sign, symbol, or design, that differentiate itself from its competitors by perceiving its intangibles attributes, or a combination of them intended to identify the goods and services of the seller or group of sellers and the differentiate them from those of competition’ (Cited in Kotler, 2008). It is important for a brand to perceive the intangible attribute by identifying its purpose (porter ), if the intangibles are not perceived it is not a brand. Aaker (2014 suggested that brand functional purpose should not only be define, but it should also express the brand higher purpose.
This higher purpose suggests the emotional and social benefits coming from choosing that brand. For example, brands like McDonalds, (I’m loving’ it. Its higher purpose is contemporary customer experience), Nike shoes (just do it its higher purpose is to bring inspiration and innovation to every athlete in the world https://help-en-us.nike.com/app/answer/a_id/113) coca cola (relieve thirst with a good taste it higher purpose is to deliver happiness). Generating awareness, creating and promoting company using strategies and approaches is a key concept in brand building, as branding is significant aspect of company, because it represents the visual voice of the company (Everett, 2016).
Brand building have been initiated with well thought brand identity which can help create a strong brand image which goes a long way in merging brand. Moreover, Malar et al (2011), describe brand personality to be important, however believes that creating a connection through archetype and essence which gives the company a theme or symbol for people to distinguish and remember them by develops a brand’s personality. For example, Apple, IKEA brand is about innovation, imagination, resourcefulness, charm, and passion. These brands have clearly allowed their consumers to create their own identity, for example Apple allows for intimate testing in its retail stores, while IKEA has showrooms and apps for designs. These brands are linked to their consumers by allowing them to recline their own self-creation. therefore, it is evident that products values as well as a specific symbol or theme all works concurrently to achieve a very effect personality of a brand.Brand personality can influence consumer preferences and choices in many ways, for example it can make the customers to be loyal to the brand, this provides opportunities for brands to build strong consumer- brand relationships (Becheur et al.
, 2017). Aaker (1997 Aaker J.L.
(1997). Dimensions of brand personality. Journal of Marketing Research, 34(3), 347–356.) describe brand personality as the human characteristics associated with brand and developed a scale to measure brand personality. In addition Azoulay and Kapferer (2003 p.
151.) explains brand personality as all the outlines of human personality, which are at the same time applicable and relevant for brands. Different studies has describe the importance of emotional marketing, such as (Schmitt (2010); Gobe (2010); Malar et al., (2011); Becheur et al., (2017), they ascertain that forming an emotional attachment with customers by matching the brand’ personality with the customers as customer are more likely to identify with brands they are emotionally committed towards in terms of personalities. However, buying decision is driven by emotion that present traditional attributes (good functionality) rather than rational influences. companies with their products and services want to create emotional link with consumers and establish a deep relationship and experience (Barnes at al.
, 2003.). a good example of emotional marketing company is Starbucks (third place of drinking coffee), Apple (creative imagination), and Amazon (earth’s most customer centric company). In this growing digital and social media era where consumers are empowered by abundant information and networked communities, companies compete in markets that are crowed with offerings, where strong brands face difficulties in creating sufficient differential advantages over their competitors (Clancy and Trout, 2002). However, Company can overcome these problem by establishing brand association in the mind of consumers to differentiate the brand from competitors, by employing consistence t brand positioning, differentiation and integrity standing (Keller and Lehmann, 2006). For example, luxury company like Burberry is well known for its trench coats, and its unique checks pattern, class, expensive prices, British heritage and bags. Burberry has created a unique brand association in the market not just its consumers with its signature as a classic English style and winter collection particularly trench coats (Burberry, 2017 https://brandburberry.
wordpress.com/assignment-2-part-i-exploratory-research/). Furthermore, a brand’s higher purpose can differentiate it from its competitors. Using market positioning and differentiation to communicate the brand’s purpose to its consumer and ultimately enrich the brane’s identity. In product category brands can be position on how similar or different the brand is perceived to be in comparison with other brands (suian and Bettman, 1989).
However, Dickson and Ginter (1987) covey that a brand is positioned so that it is seen as sharing important attributes or product characteristics with other brands in the category and a being superior on the differentiating attributes. Brand differentiation set brand apart from the general category rather than position the brand within overall market, and create a strong perception of difference that the brand is in a class by itself (Porter 1980). However, very strong and clear brand personality allows a brand to differentiate itself from competitive brands, i.e if a company set a low price it has differentiate itself from other brands, or if a company set distinctive technology it has differentiate itself from other brands. A good example of brand differentiation is Apple, Amazon. Apple make computers, phones and other devices, so do brands like HP, Lenovo, Dell and Samsung make computers.
But Apple have been able to differentiate themselves from other competitors by offering a innovative, modern, classic passionate personality, and creative brand. a brand can differentiate itself from competition not only in products or the services it offers but in its personality. (see figure 2.2 for apple differentiation).