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Southeastern Iowa SBDC, Burlington, IA If you own a business, have you ever stopped and asked yourself the following question? Why would someone buy my product or service? Spa cheap hotelsThis may sound a little simplistic at first but when you give it serious consideration it holds the beginning answers to the basis of why your business currently exists, or may not exist in the future. The academic term for this is competitive advantage. The primary motivation for a buying decision can be location, price, quality, and a long list of other reasons. What is your business's competitive advantage? Some businesses have made price their primary competitive advantage. This may be either a low price or even a high price. Yes, a high price can be a competitive advantage. Many people will associate quality with price before ever experiencing the product or service. Customers may rely on the price to form their perceived value. A certain name brand line of clothing may price an average quality product at a premium price. The customer still perceives a fair value at the premium price because it is an ego satisfier. Other businesses use the low or lowest price as one of their main competitive advantages. Chain discount stores are full of products that represent companies that have adopted the low price strategy. Maybe your competitive advantage is location. You are strategically located so that customers can take advantage of your product or service. Daycare centers that are located on a major route between residential areas and industrial centers have a competitive advantage over those that are located somewhere else. Other things being equal, parents will obviously choose the more convenient service. One of the ways to help you think about this is to start asking yourself why you buy products and services from the businesses that you do. Why do you shop at your grocery store, use your dry cleaners, buy your particular brand of clothes, and drive your type of vehicle. This list can go on and on but I think you get the point. We all make buying decisions daily and nearly always they are based on a competitive advantage(s) being offered by the vendor. Once you identify and prioritize your competitive advantage(s) you can then identify your target market. The target market is everyone who could become a repeat or future customer. What are the characteristics of the target market? What are their income level, age, sex, and occupation? Where and how do they spend their time and money? Some companies spend a huge amount of effort to collect data on their customers so that they can determine the most effective way to communicate with them. Many retailers have set up their point of purchase system to gather your name, address, and phone number. The system then automatically tracks the type of items you purchase and the frequencies of those purchases. You may then go on a mailing list that will be used to communicate with you in the future concerning sales and new product items according to your interest. ERROR MSGAmazon.com, a bookstore on the Internet, does a great job at collecting data about their customers and then using the information to encourage more sales. After purchasing a book from Amazon, the next time you log on to their web site, you are presented with a list of books that are from the same author or other books with the same topic as the last one you purchased. You may receive an email from Amazon as soon as one of these books go on sale. These are smart marketing methods based on collected data concerning their target market. Take an x-ray of your business by asking; "Why would anyone buy my product or service from my business?" Decide if the answer represents reasons that are strong enough to be repeated frequently by your current customer base or shared by new customers. Then clearly identify your target market and learn as much as possible about them. And finally, develop the most cost effective and creative methods for communicating your competitive advantage(s) to your target market. > See also: Marketing, Advertising & Sales | 
