1.1.3 Market Positioning

Question 1

What is market positioning

Answer 1

The view consumers have about the quality, value for money and image of a product compared to those of competitions

Question 2

What is market mapping

Answer 2

The process of finding the variables which differentiate brands in a market and then plotting them on a map - helps to identify a gap in the market

Question 3

Examples of variables for market mapping

Answer 3

Modern + traditional
Mass + niche
Functional + luxury

Question 4

Uses of market mapping

Answer 4

To identify a gap in the market
Used by traditional brand to reposition itself in the market

Question 5

Disadvantages of market mapping

Answer 5

1. Only 2 product characteristics can be observed at a time
2. Positioning is based on judgements which may or may not be accurate

Question 6

What is competitive advantage

Answer 6

A set of unique features of a company and its goods and sales that are perceived by customers as significant and superior to the competition

Question 7

What is product differentiation

Answer 7

The degree to which customers see a particular product as being different form competing products

Question 8

What is adding value

Answer 8

The difference between the cost of making a product and what you will then sell it for

Question 9

What is the equation for adding value

Answer 9

Value added = price – cost of bought in goods and services

Question 10

What are the benefits of adding value

Answer 10

1. The more value that is added, the higher the price that can be charged, which means higher profit margins
2. Gives protection against competitors offering lower prices which means a competitive advantage
3. Customer loyalty which means repeat business