Companies must utilize all available resources and channels to successfully communicate their competitive advantage and some of these channels include the following:
1. Advertising through companys website
2. Direct Marketing-sending solicited emails to target audience
3. Traditional methods like television advertisements
4. Blogs and social networking media
5. Aligning company to a well-known cause
Over the years, we have seen the transformation of media right before our eyes. From marketing in its infancy to marketing in its maturity, things have changed dramatically and firms today understand that competitive advantage alone is not important, it must be communicated successfully through effective marketing and hence most organizations would invest heavily in marketing efforts to reach the target audience in the most cost effective manner.
Relationship Marketing is not exactly a new concept in marketing. It has been present in its more rudimentary form for ages but it is only now that we have been able to fully comprehend the meaning and scope of relationship marketing. Relationship marketing refers to a strategy by means of which a company develops a close on-going connection with its customers, suppliers and other people in the value chain. The focus is on the word “on-going” which means that relationship doesnt end with a transaction. It is more consistent and continuous whereby companies try to reach the same people over and over again and they in return prefer the companys products and services over rivals offerings.
“Relationship marketing refers to the development, growth, maintenance of long- term, cost- effective exchange relationship with individual customers, suppliers, employees, and other partner for mutual benefit. ” (Boone and Kurtz, 2007)
Relationship marketing can sometimes backfire or prove fruitless with customers complaining of because pestered or companies sending them offers through unsolicited mails or telephone calls but marketing experts still maintain that it is more beneficial to a firm in the long run than simply transactional marketing.
There are various ways in which relationship marketing exists. Companies would ask for your email or phone number when you purchase an item and this is their way of staying in touch with you because they know you have once been their customer. Companies like Bloomingdales, Kohls, Sears etc. would have customers sign up for their membership cards or charge cards which automatically connect the customer to the firm for the long run.
Relationship marketing doesnt only focus on the customers. It also takes into account every single important unit in the value chain such as the suppliers and manufacturers etc. The company will maintain good relations with its suppliers but in most cases it will not be as friendly as with customers because that can cause problems. Suppliers can become complacent which is not healthy for the firm. Dell thus practices “tough love” policy with its suppliers while maintaining positive relations:
“Michael Dell describes the relationships to the suppliers as a kind of friendship, in fact, they are not. Michael Dell himself says that DELL wants to be a tough customer. This is mainly to avoid complacency among suppliers, that Brennan (1997, p.771) describes as one of the downsides of partnering. Using, for example, a supplier report card, a tool to 360-degree evaluate a suppliers performance also in comparison to other suppliers, DELL ensures that e.g., cost, defect tolerance, availability of technology, inventory velocity, etc. are always up to its expectations. Otherwise, a supplier is dropped. (Dell 1999). These measures help to secure that DELL avoids backing the wrong horse (Brennan 1997).” [Schmid et al. 2003]
EFFECTIVE MARKETING COMMUNICATION AS SUSTAINABLE COMPETITIVE ADVANTAGE
As companies try to discover their sustainable competitive advantage (SCA), they also need new and better ways to communicate the same. The study and power of integrated marketing communication has made it clear that in todays competitive world, it is the communication strategy and marketing capabilities that will determine whose competitive advantage is most sustainable.
Marketing communication has been impressive in its growth and scope. The role of marketing capabilities indicate that marketing done effective can serve as single most important factor in determining a companys success. Effective marketing initiatives including development of a high-functioning distribution network, conducting good market research and promoting it to the right target audience result in the success of a product which is very much the same thing as having competitive advantage which also means making right products available to the right people at the right time. Thus we can safely announce that marketing capabilities lead to sustainable competitive advantage.
(Weerawardena 2003, 22).
Over the long-term sustainable comp advantage refers not only to an edge over the competitor but can be narrowed down to two important factors namely highly value attached to the product and low cost of development and distribution. If a company can produce high value products at lower costs consistently, then it can safely stay ahead of competitive and gain SCA. This is what the customer will then use to determine the place of a product in his or her mind as against the rival products. (Adcock 2001, 182).
CA in other words can be viewed as having consistently higher position in consumers mind. We already know that when consumers are bombarded with excessive variety and choices, they tend to assign a position to each product and service according to his or her own criterion. When a company and its products are consistently high on consumers mind ladder that shows that the product or company has been able to achieve SCA. It is believed that a company that has higher SCA and consistently performs better than rivals has access to knowledge bases hitherto unknown to others. They are not only able to tap into these resources but can also manage them to their advantage. (Tsai and Shih 2004, 524).
The transformation of a companys key process into strong capabilities that not only are relevant to customers needs but also provide him with better value for money is what becomes CA for the company. It is all about paying closer attention to the core inner strengths of a firm and these strengths can be given various terms like “resources,” “invisible assets,” strategic assets,” “firm resources,” “capabilities,” “competency” and “core competencies” (Juttner and Wehrli 1994, 43).
It is important to understand that resources are not the same thing as capabilities. A firm has resources which are its productive factors while capability is the power to “deploy these resourcesto affect the desire end.” (Dutta, Narasimhan and Rajiv 1999, 550) Thus if a firm wants to enjoy consistent advantage over others, it must have strong capabilities to fully use its resources in its favor.
BARRIERS TO IMC
Integrated marketing communication sounds like the most perfect strategy any company could develop for connecting with its target market. But that may not always be the case. When applied effectively, it certainly brings in many much desired rewards in terms of higher revenues and more customers but when allowed to become the sole means of communication, it can actually have some serious downsides. These are some of the barriers of IMC or barriers to implementation of IMC.
For one, there may actually be the usual resistance to implementation of IMC because of general fear of the new and the unknown. Resistance is very common in companies and when employees have not been properly educated about change, they can in most cases become highly resistant to change which may also include the use of different and new methods for communicating with the public.
Even if the company is able to overcome the initial obstacle, it can then face the challenge of effectively harnessing the power of so many varied channels of communication. It is easier said than done and communicating through variety of channels such as the Internet, the social networking sites, newspapers, television, radio, direct marketing etc. can be very overwhelming and can prove counterproductive if not done correctly.
Smith and Taylor (2004) identify some of the key barriers to IMC. According to them, these common barriers include, “Functional Silos; Stifled Creativity; Time Scale Conflicts and a lack of Management know-how.” (p. 17)
“Functional silos” is the organizational structure that makes it impossible to implement new ideas due to either budget constraints or power politics. There are cases where firms would maintain very tight control over how things work and when a new idea like IMC is introduced, they tend to become very more restrictive in their approach as adopting a new idea is equated with relinquishing control.
“this can be aggravated by turf wars or internal power battles where specific managers resist having some of their decisions (and budgets) determined or even influenced by someone from another department.” (p.17)
IMC is also believed to stifle creativity. In a more traditional world, a new idea has a better chance of fruition than in the modern wired world. This is because if a new idea is presented, company.