1.1.3 Market Positioning

Question 1

Definition of Market Positioning

Answer 1

The process where a business decides where they want to position their product in a market depending on price, quality, branding etc.

Question 2

Definition of Market Mapping

Answer 2

A tool for identifying the position of a product in a market

Question 3

4 Key Points of Market Mapping

Answer 3

-Two axis with contrasting ends
-If there are no spaces, market is saturated, hard to enter, profits low, competition high, no market niche
-If there is a space there can be a market niche to exploit but research is needed
-A gap doesn’t always mean a niche can fill it

Question 4

3 Advantages of Market Mapping

Answer 4

-Market gaps can be identified
-Comparisons to competitors can be made
-Easy to construct

Question 5

4 Disadvantages of Market Mapping

Answer 5

-Gap may exist for a reason (not profitable)
-May require primary research
-Only uses two criteria
-Only looks at one specific point in time

Question 6

Definition of a Competitive Advantage

Answer 6

The features of a business and its products that are perceived as superior to its rivals by customers

Question 7

8 Sources of Competitive Advantage

Answer 7

-Quality
-Design and Innovation
-Ethical Stance
-Brand Image and Reputation
-Reliability
-Price
-Customer Service
-Differentiation

Question 8

Definition of Product Differentiation

Answer 8

An attempt by a business to distinguish its products from those of competitors

Question 9

6 Reasons to use product differentiation

Answer 9

-Stand out in a market
-Create a USP
-Gain competitive advantage
-Increase demand
-Build loyalty
-Charge higher prices

Question 10

Definition of Adding Value

Answer 10

The difference between the price that is charged to the customer and the cost to produce

Question 11

8 Methods of Adding Value

Answer 11

-Convenience
-Customer service
-Customisation
-Design
-Functions and Features
-Marketing and Branding
-Packaging
-Product differentiation