1.1.3 Flashcards
What is meant by ‘positioning’?
Where a product is placed in the market relative to its competitors
What is a market map?
A diagrammatic technique that enables businesses to display the perceptions of customers
Can it be used to analyse consumer buying habits and preferences?
Yes
What is a competitive advantage?
A feature of a business that allows it to perform more successfully than others in the market
What is Michael Porter’s generic strategy?
He states that a firm can enjoy a competitive advantage if it is either:
- Lowest cost or
- Highest differentiated
What is product differentiation?
Having a unique feature that makes a product stand out from other products in the marketplace
What is a unique selling point?
A feature that distinguishes a firm’s product from those of its competitors
What 3 main things does product differentiation allow a firm to do?
- Charge a premium price
- Gain brand loyalty
- Add value
What is added value?
The value of the finished good or service over and above the cost of achieving it
When is added value achieved?
When a business increases the worth of its factor inputs by creating new output
What are the 4 factors of production?
- Land
- Labour
- Capital
- Enterprise
