1.1.3 Market Positioning

Question 1

Market positioning

Answer 1

How individual products or brands are seen in relation to competition by consumers. This may stem from pricing, marketing or quality.

Question 2

Market mapping

Answer 2

The use of a grid showing 2 features of a market. Individual brands or businesses are added to the grid to show potential gaps in the market.

Question 3

Benefits of market mapping

Answer 3

• Enables a business to spot gaps in a market.
• Helps a business differentiate its products from competition.

Question 3

Drawbacks of market mapping

Answer 3

• Sometimes hard to categorise products and services.
• Identifying a gap does not mean there is a need for the product. More market research needs to be done.

Question 4

Added value

Answer 4

The value of a finished good or service over and above the cost of achieving it. This is achieved when a business increases the worth of its factor inputs by creating new output.

Question 5

Ways of adding value

Answer 5

• Manufacturing - Higher quality materials, more skilled workers.
• Branding.
• Marketing – advertising.
• Customer service.
• Unique selling point.
• Technology

Question 6

Benefits of added value

Answer 6

• Charge a higher price.
• Point of difference from competition.
• Protecting from competitors trying to steal customers by charging lower prices.
• Focusing a business more closely on its target market segment.

Question 7

Competitive advantage

Answer 7

Having an edge over rival products.

Question 8

Product differentiation

Answer 8

Having a unique feature that makes a product stand out from other products in the market place.

Question 9

Unique selling point

Answer 9

A feature that distinguishes a product from its competition.

Question 10

Porter’s Generic strategy: Mass market, lowest cost

Answer 10

Cost leadership

Question 11

Porter’s Generic strategy: Mass market, highest differentiation

Answer 11

Differentiation

Question 12

Porter’s Generic strategy: Niche market, lowest cost

Answer 12

Focused cost leadership

Question 13

Porter’s Generic strategy: Niche market, highest cost

Answer 13

Focused differentiation

Question 14

Porter’s Generic strategy

Answer 14

A firm can enjoy a competitive advantage if it’s lowest cost of highest differentiation. Porter’s basic premise is to be one thing or the other and not stuck in the middle. Marketing messages must be clear and non-contradictory.