1.1.3 - Market Positioning

Question 1

What is market mapping

Answer 1

• Market mapping is the process of finding the variables which differentiate brands in a market and then plotting them on a map – to identify a gap in the market

Question 2

What is the use of market mapping

Answer 2

• Market mapping could be used to identify a gap in the market
• It could also be used by a start-up to identify which products to produce or which services to provide - so they are market orientated (not product orientated)
• It could also be used by a traditional brand to reposition itself in the market

Question 3

What is competitive advantage of a product/service

Answer 3

• 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
• The main idea is that a business can win by being cheaper or by being different

Question 4

How can a business achieve competitive advantage through price

Answer 4

• Some businesses choose to use a very low cost model and compete on price
• This can be found in many industries including retail and the holiday market

Question 5

How can a business achieve competitive advantage through added value

Answer 5

• Added value can be achieved through a process
• Birds eye takes cod and pollock and adds value to the fish and produces a range of fish products

Question 6

How can a business achieve competitive advantage through reliability

Answer 6

• Having reliability can build a core for you too sell your product too

Question 7

How can a business achieve competitive advantage through advertising

Answer 7

• A business can advertise to raise awareness of the brand, remind customers or inform them of product features

Question 8

How can a business achieve competitive advantage through customer service

Answer 8

• Customer service can provide a business with competitive advantage
• Consumers want a business to get things right first time and dealing with their complaints faster and more efficiently.
• Amazon for example their vision/mission statement states: “to be earth’s most customer-centric company.”

Question 9

What is the purpose of product differentiation

Answer 9

• Where a product is different from the competition in some way
• Consumers must be able to perceive this difference and may be willing to pay a premium price for the product

Question 10

What are the methods of market differentiation

Answer 10

• Through reputation (hair salon, restaurant)
  Through customer service or after sales service (Marks and Spencer)
• Through value for money (ASDA, Lidl, Aldi, Primark)
• Through product features (Cars, mobile phones)

Question 11

What is added value

Answer 11

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

Question 12

How can business add value through design

Answer 12

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

Question 13

How can business add value through production

Answer 13

Quality will ensure a higher price can be charged (differentiation advantage)
Efficiency helps cut costs of the input (cost advantage)