Define Differential Advantage

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The Answer is Differential advantage is the characteristic that separates one company from another in product,price,promotion,and/or distribution.Differential advantage could be that a business found a target market that wasn't being served or was underserved.More commonly,though,this differential advantage is the result of something a business does differently in one area of the four Ps-product,price,place,and promotion.An entrepreneur may use their language skills to their advantage.Alternatively,one could create a differential advantage with one of the parts of the marketing mix.The possibilities are limited only by one's imagination and the customer's perception that one can fill a need.A business's differential advantage could be in pricing.While the lowest prices may attract customers,they are also subject to retaliation by bigger,better-established companies and are usually not a good idea for start-up companies.However,if the business's cost structure is lower,it may succeed this way.But if its cost structure is not lower,it will not be able to compete in pricing.The key is not necessarily to be cheaper than its competition,but to be different from its competition.Place is another area in which a firm may have a differential advantage.Promotion,too,can create a differential advantage,although more likely it will be the means by which you convey this advantage to the customers.Creative advertising can woo clients from existing competition or encourage clients not currently buying a product or service to try it.

Define Differential Advantage

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