Marketing and Competitiveness (AQA A Level Business): Revision Note

Marketing decisions and business competitiveness

• A business is competitive when it can attract and retain customers more effectively than its rivals

• Marketing plays a central role in building and maintaining competitiveness

  • The decisions a business makes about its target market, marketing mix and marketing objectives all directly affect its ability to compete

What makes a business competitive?

• Competitiveness can be built in two main ways

• Most businesses pursue a combination of both, but marketing decisions are central to determining which form of competitiveness the business emphasises

How marketing decisions affect competitiveness

Targeting the right market

• A business that focuses clearly on the right target market can tailor its offer more precisely than rivals, trying to appeal to everyone

• This focus allows it to meet customer needs more effectively, strengthening its competitive position

The marketing mix

• Getting all four elements of the marketing mix right, and ensuring they work together makes a business more attractive to its target customers

  • A well-differentiated product that competitors cannot easily copy gives the business a competitive edge

  • Pricing decisions determine whether the business competes on cost or on perceived value

  • Distribution (place) choices affect how conveniently customers can access the product - wider, faster or more exclusive distribution is a genuine competitive advantage

  • Effective promotion builds brand awareness and customer preference, making it harder for rivals to attract customers

Brand building

• Consistent, well-executed marketing creates a strong brand, one of the most durable competitive advantages a business can have

• A recognisable brand builds trust, reduces customers' sensitivity to price and makes it harder for new competitors to win customers away

Unique selling point (USP)

• A unique selling point is a feature or benefit that only this business offers

• Marketing that communicates a clear USP helps it stand out in a crowded market

• A USP might be a product feature, a service standard, a price point or a brand value, such as sustainability or ethical sourcing

Customer retention

• Marketing activities that build loyalty, such as loyalty schemes, personalised communication or strong after-sales service, make existing customers less likely to switch to a competitor

• This is particularly valuable in markets where attracting a new customer costs significantly more than retaining one

Innovation and new product development

• Marketing-led innovation keeps a business ahead of rivals

• By identifying unmet customer needs through market research, a business can develop new products before competitors do

  • This can give the business a first-mover advantage

Digital marketing

• Businesses that use digital channels effectively through targeted social media advertising, search engine optimisation (SEO) or email marketing can reach customers more efficiently and at a lower cost than rivals relying on traditional methods

• This is a growing source of competitive advantage, particularly against less digitally active competitors

The risk of poor marketing decisions

• Poor marketing decisions can damage competitiveness just as much as good ones can strengthen it

  • Targeting the wrong market wastes resources and fails to build a loyal customer base

  • A marketing mix that is internally inconsistent, for example, a premium product sold through discount retailers, confuses customers and undermines the brand

• Underinvesting in marketing allows rivals to build stronger brand recognition and customer relationships

• Failing to respond to changing customer needs lets competitors gain ground