1.1.3 market positioning

Question 1

Market positioning

Question 2

Market map

Answer 2

Illustrates the range of positions that a product can take in a market based on two dimensions that are important to customers.

Question 3

Dimensions

Answer 3

low price ~ high price

basic quality ~ high quality

low volume ~ high volume

necessity ~ luxury

light ~ heavy

simple ~ complex

unhealthy ~ healthy

low tech ~ hi tech

Question 4

Benefits to market maps

Answer 4

~ helps spot gaps in the market

~ useful for analysing competitors

~ encourage the use of market research

Question 5

Drawbacks of market map

Answer 5

~ just because there is a gap doesn’t mean there is demand

~ not a guarantee of success

~ how reliable is the market research

Question 6

Possible value differences that have the potential to deliver competitive advantage

Answer 6

~ offer more for less

~ offer more for more

~ offer more for the same

~ offer less form much less

Question 7

Product differentiation

Answer 7

Aries when customers perceive a distinct difference between your product and the alternative provided by competitors

Question 8

Compete effectively

Answer 8

~ product differentiation is a source of competitive advantage, provided it can be sustained

~ ideally hard to copy

Question 9

Protect and build a brand

Answer 9

~ build intangible value

~ strengthen customer loyalty

Question 10

Add more value

Answer 10

~ strong differentiation should allow a higher price

~ higher profit margin

Question 11

Key requirements for effective product differentiation

Answer 11

~ capable of delivering what is important to customers

~ distinctive

~ communicated and visible to customers

~ not easy copied by competitors

~ affordable for the target customers

~ profitable

Question 12

Unique selling point (USP)

Answer 12

Is something that sets a product apart form its competitors in the eyes of customers, both new and existing

Question 13

Added value

Answer 13

Is the difference between the price of the finished product/service and the cost of the inputs involved in making it

Question 14

Transformation process

Answer 14

Describes what happens inside the business. This is where value is added to inputs to create outputs

example ~ restaurants (industry) ~ people, ingredients, buildings (key inputs) ~ value added during cooking and through customer service