Sources of Market Power
Market power means a lot of things in the world business, and even in its wide scope of meaning it undoubtedly holds implications of overall business success. For a company of any size or type, having market power means dominating a sufficient share of the market alongside competitors. It means having the resources to be able to be market leaders who can devise effective and efficient strategies to target and retain customers.
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Competite Advantage
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In today's rapidly moving and widely diverse market place, staying ahead of the competition is crucial to success. Consumer behavior has shifted from the days of brand loyalty to a buying behavior that is far more volatile and responsive to newer and "better" products and services available. Businesses not only have to stay ahead of the competition by offering new products that appeal to customer tastes, but also by offering convenience to customers, since technology has forced buying convenience into the top considerations of consumer behavior. Having a competitive advantage means having rapid response to consumer demands, staying on the cutting edge of technology and modifying existing products to offer more benefits than the competition. It also means--and this is key to competitive advantage--having a brand, product or service attribute that is unique. This could require innovation that "creates" a market need, rather than simply acting in response, a major source of market power.
Technology
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Technology is everything in today's marketplace. Advancements in technology have taken the concept of "efficient communication" to new heights. For internal communication, customer communication and convenience, and overall marketing strategy, it is imperative that a business not only understand the latest in technology and how it affects business, but invest in technology that enables the business to: monitor internal activity; constantly keep top executives and business owners abreast of company and market information; track customer activity; and accurately retain all company data in real time. Technological advances have even forced small businesses to invest time and money into market aspects, such as web presence and online shopping software. The local flower shop, for instance, will survive and thrive with market power with an SEO-conscious web presence, and printable media that display products and services. Technology is a key component of market power.
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Branding
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Branding is an integral part of marketing. Branding is a term that should be used interchangeably with marketing or advertising or strategic planning. Branding is actually creating a company and/or product personality and shaping an image of that personality in the minds of consumers. Ultra effective branding is achieved when a product's brand name is the first thing that comes to a consumer's mind in a given product category. For instance, luxury watches immediately cast thoughts Rolex. A larger example is Google, which has actually become a verb and is the first name associated with Internet search engines. Effective branding not only gives the company and/or product a personality and image, but it embeds that image deeply into the marketplace and consumers' minds, in a way that should be consistent and untarnished. To gain market power, the sales and marketing strategies of new products should first create the product's personality and use the marketing strategies to highlight and enforce that personality.
Attract and Retain Customers
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Retaining old customers is equally as important as attracting new ones. With communication as widespread as it is today, a poor customer experience can be far more harmful to a business, with advances in social media and other viral-related communication tools, than it once was. Likewise, a good reputation with customer service is also rapidly spread and attracts new customers. Customers these days like convenience, but they also appreciate feeling valued. Amazon.com is a leader in customer service and a business phenomenon, as its advanced technology and company concept includes the functions of not only tracking its customers' buying behavior, individually and collectively, but using the data to specifically tailor sales strategies to appeal to the needs of each customer in a way that is mutually beneficial. The customer feel valued, and Amazon sales benefit from precise and extremely effective sales strategies.
Cloud Computing
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Cloud computing deserves its own category outside of the broader category of technology. Cloud computing has dramatically changed the business environment, allowing small to large businesses to strategize and monitor company data accurately and in real-time. Cloud computing means using web-based software that is maintained and operated on a third-party "cloud" outside of the business. Web-based email, such as hotmail or Gmail, was the first form of cloud computing software. It allows users to access information from any computer with an Internet connection. Cloud computing has relieved businesses of costly and problematic IT maintenance and equipment and has smoothed out internal communications immensely. It has also provided marketing and sales people with accurate, up to the minute data that helps strategic planning.
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