1.1.3 - Market Positioning

Question 1

What is Market Mapping?

Answer 1

Process of finding the variables which differentiate brands in a market and plotting them on a map

Question 2

What are the 3 purposes / uses of Market Mapping?

Answer 2

• To identify a gap in the market
• To analyse competition in a specific market
• To reposition itself in the market

Question 3

What are 3 Pros or Market Mapping?

Answer 3

• Identifies potential gaps in the market
• Identifies areas in market which may be overpriced
• Simple method to analyse competitors

Question 4

What are 2 Cons of Market Mapping?

Answer 4

• Gaps in the market,no guarantee of success
• Only 2 variables

Question 5

What is Competitive advantage?

Answer 5

Advantage a business has over its competitors, allowing it to generate larger than average turnover for the industry

Question 6

What are 2 ways that a business can achieve Competitive Advantage?

Answer 6

PRICE - found in industries like retail and holiday market

ADDED VALUE - achieved through a process , e.g. add value to fish through access

Question 7

What is Product Differentiation?

Answer 7

Wheee a product is different from the competition in some way
Consumers must be able to perceive this difference

Question 8

What are 4 methods of differentiation?

Answer 8

• REPUTATION
• CUSTOMER SERVICE
• VALUE FOR MONEY
• PRODUCT FEATURES

Question 9

What are 2 Pros of Product Differentiation?

Answer 9

• Increased sales revenue = more market share
• Avoid competing on price

Question 10

What is 1 Con of Product Differentiation?

Answer 10

• To ensure effective differentiation - INCREASED MARKETING COSTS

Question 11

What is Adding Value?

Answer 11

It’s the difference between the price that’s charged to the customer and the cost of inputs required to create the product or service

Question 12

What are 3 ways a Business can add value?

Answer 12

• Design
• Production
• Marketing

Question 13

How can a Business add value through Design?

Answer 13

Develop new technology / design features to make their product unique ( differentiation advantage )

Question 14

How can a Business add value through Production?

Answer 14

Achieving QUALITY and EFFICIENCY adds value.
Quality ensures a high price and be charged
Efficiency helps cut costs of the input

Question 15

How can a Business add value through Marketing?

Answer 15

Creating an image that makes the product more desirable, a brand differentiation advantage

Question 16

What are 3 Benefits of adding value?

Answer 16

• Higher price can be charged , meaning higher profit margins
• Protection against competitors offering lower prices meaning competitive advantage
• Customer loyalty, meaning repeat business