Managing a Business

Marketing and Competitiveness

Marketing and Competitiveness


Competitiveness enables a business to survive and grow within their market. Consumers are attracted to the business because it meets their needs. When the marketing mix is used successfully it will ensure that the products produced are different from those of any competitors thereby giving the business a competitive edge.

Determinants of the competitiveness of a business include:

– Investing in new equipment or technology

– Using training and education to improve employee skills

– Improving innovation through research and development

– Being enterprising

– Ensuring the effectiveness of the marketing mix

– Improving level of workforce motivation

– Ensuring the efficiency of operations management

– Putting quality procedures in place

– Ensuring the effectiveness of financial planning and control

Using these as a base, there are four main areas in which a business can improve its competitiveness:

Advertising– Financial management: for example, budgeting

– Operations management: which includes investing in new machinery

– Human resource management: training staff and improving levels of motivation

– Marketing: attracting more customers

Market conditions

There is a wide range of markets which provide products and services. Rarely it’s the only business in a market and if a good idea is brought out other businesses will soon bring out copies in an attempt to cash in on its success. In order to survive smaller businesses need to ensure that their product has a Unique Selling Point (USP). The USP could be due to:

– Being more specialised
– Sold in a more convenient place
– The brand

Even major businesses need to modify their marketing mix so that they can compete. They often need to regenerate a product to ensure its survival.

Degrees of survival

Which markets a business competes in depends on a number of factors.

Perfect competition

CompetitionIn perfect competition lot of small businesses compete and all products are basically identical. Examples include the stock market and fruit and vegetable stalls. There are no barrier to entry or exit this market and cost efficiency and optimum efficiency are required in order to survive. The disadvantages to this competition is that there’s no real scope for marketing and very low profit margins.

Monopolistic competition

This is also composed of a lot of small businesses but the products are differentiated. Examples include hairdressers, cafs and plumbers. There are hardly any barriers to entering or exiting this market and cost efficiency and minimisation are very important unless the business has a strong USP. Businesses don’t have much control over their prices and profits tend to be low. Marketing is advantageous to make a business more well-known to its customers.


AdvertisingThere are fewer companies involved and they’re usually medium to large in size. The products are differentiated and examples include supermarkets and banks. The barriers for entry tend to be high mainly because the businesses already there are established and have good brand loyalty. Instead of price, the businesses tend to compete on other factors. Profits are usually high through branding and UPS and a lot of capital is spent on promotion. Occasionally collusion occurs between businesses.


In theory there’s only one dominant business however legally a monopoly is where a business owns more than 25% of a market. A dominant monopoly is one that owns over 40%. Their products are very unique and examples include Royal Mail and Microsoft. The barriers to enter are very high and could even be governmental. These businesses are the price setters and have to deal with low levels of competition. Their power is proportional to the importance of their product and the profit margins are extremely high.