1.1.3 Market Positioning

Question 1

What is added value?

Answer 1

Added value is the difference between the price that is charged to the customer and the cost of inputs required to create the product or service

Question 2

How can we achieve added value?

Answer 2

This can be achieved through the product itself or the way that consumers perceive the product

Question 3

What are the 4 methods of differentiation?

Answer 3

-Through reputation
-Through customer service or after sales service
-Through value for money
-Through product features

Question 4

Give 3 ways on how a business can add value to a product?

Answer 4

Design - Develop new technology or design, features to make their product unique.

Production - Achieving quality and efficiency adds value.

Marketing - Creating an image that makes the product more desireable.

Question 5

List 3 benefits of adding value?

Answer 5

-The more value that is added, the higher the price that can be charged, which means higher profit margins.

-Protection against competitors offering lower prices which means competitive advantage.

-Customer loyalty which means repeat business.

Question 6

What is product differentiation?

Answer 6

When the product is different from the competition in some way.

Question 7

What is competitive advantage?

Answer 7

An advantage a business has over its competitors, allowing it to generate larger than average turnover for the industry, either in low cost leadership or on price leadership