Competitive Advantages of Fmcg Companies

1621 Words May 18th, 2013 7 Pages
Referring to Millward Brown’s research, identify the competitive advantages of FMCG companies. Discuss if these competitive advantages are sustainable and suggest how these companies should further develop their competitive advantages in future.

The case study talks about how fast moving consumer goods (FMCG) achieve competitive advantages in marketing. A company is said to have a competitive advantage if the company has greater profitability comparing to the average profitability of his rivals and have better profit growth than other companies in the same industry (Smallbusiness , 2013). Competitive advantage is gained by having the strengths and competencies which are hard to catch up by other companies. Through these strengths and
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If the company can find a way to eliminate this downtime, the number of outputs will be increased.

Differentiation advanatage
In the FMCG industry, one effective way to make a company stand out from so many competitors is differentiation. Differentiation means making the business or brand out by offering unique features, benefits or services. It helps to create a perception of receiving something of greater value than it offered to customers. Nowadays, companies are always trying to distinguish its offering from others. In FMCG industry, R&D departments in every company are looking for achieving a competitive differentiation in product features. They can design different product packaging, make a special formula of ingredients for a product, or create a particular brand name or slogan that makes the customers to have the perception that the product has something special etc (Levitt, 1979). In instance, L´Oreal which is an international cosmetics company, has the creative slogan “Because you are worth it”. It successfully attracted customers, especially women. Believed in the slogan, they have the sense of superiority when purchasing the products.

According to Dr. Andrea Grimm, Dr. Astin Malschinger (2010), (Grimm, 2010), there are seven differentiation strategies. The first strategy is product differentiation, which means the product can offer something different than the other product in the same category. Dr. Pepper is other…