1.1.3 Market Positioning Flashcards
Competitive advantage
The increase in value that a business creates by undertaking the production process
Product differentiation
Making a product or service more attractive to a particular target market
Added value
Offering consumers greater value, either by means of lower prices or by providing greater benefits and service that justifies higher prices
Market mapping
A study of various market conditions that is used to identify trends and corresponding variables between consumers and products
Advantages of marker mapping
- helps spot niches in the market
- useful for analysing competitors
- encourages market research
Disadvantages of market mapping
- just because there is a gap, doesn’t mean there is demand
- market research might not be reliable - often subjective
- finding a gap doesn’t guarantee success
- consumers may have more complex decision making process than just 2 dimensions.
Possible dimensions of market mapping
Low price v high price
Low quality v high quality
Necessity v luxury
Simple v complex
4 ways of gaining a competitive advantage
Famous brand name, very low production costs, distinctive, control of distribution costs
Famous brand name
Ensures a high degree of trust, making a purchase more likely
Very low production costs
Always in a position to undercut the prices of your rivals
Distinctive
Makes your products stand out and therefore more desireable
Control of distribution costs
Hard for competitors to get their products from consumers
Formula of added value =
SPPU - cost of production
3 ways to add value
Design, production and marketing
How does design add value
Develop new technology/ design features to make the product unique
