1.1.3 Market Positioning

Question 1

market positioning

Answer 1

the process a business goes through when launching a new product or service
-decide in regards to price, quality, branding and customer perception

Question 2

market mapping

Answer 2

a tool for identifying the position of a product within a market
-this is a two dimensional diagram that shows the attributes or characteristics of a product in comparison to rivals’ products

Question 3

what 2 decisions to businesses make when using market positioning

Answer 3

which customers they are going to serve
how to serve those customers

Question 4

how do businesses choose which customers they are going to serve?

Answer 4

-market segmentation
-targeting

Question 5

how do businesses choose how to serve the customers?

Answer 5

-product differentiation
-marketing positioning

Question 6

what is value proposition?

Answer 6

deciding how to compete in the segments the business has chosen to target

Question 7

give some dimensions that can be used on a positioning map

Answer 7

low vs high price
basic vs high quality
low vs high volume
essential vs luxury
light vs heavy
unhealthy vs healthy
low-tech vs hi-tech
simple vs complex

Question 8

usefulness of market positioning/ mapping

Answer 8

-market maps can be identified, can come up with new products
-comparisons can be made between your and rival business
-simple to construct and offer a visual illustration of the position of a product in the market

Question 9

limitations of market positioning/ mapping

Answer 9

-a gap in the market may exist for a certain reason, it may not be profitable to fill
-market mapping may require primary research- expensive
-only two criteria can be chosen at a time- too simple
-markets are dynamic, only give insight for a period of time

Question 10

give the different values a business can deliver for a competitive advantage

Answer 10

-offer MORE for LESS
-offer MORE for MORE
-offer MORE for the SAME
-offer LESS for MUCH LESS

Question 11

sources of competitive advantage

Answer 11

delivery times
quality
low price
reliability
ethical stance
design
brand image and reputation

Question 12

what is product differentation?

Answer 12

arises when customers perceive a distinct difference between your product and the alternatives provided by competitors

Question 13

what does effective differentiation allow a business to do?

Answer 13

compete effectively
-source of c advantage and hard to copy
protect and build a brand
-strengthening customer loyalty
add more value
-strong diff can charge high prices= high profit margins

Question 14

USP

Answer 14

unique selling point
- if a product is effectively positioned
this is something that sets a product apart from its competitors in the eyes of customers

Question 15

adding value

Answer 15

the difference between the price that is charged to the customer and the cost of inputs required to create the product or service

Question 16

methods of adding value

Answer 16

marketing and branding
product differentiation
packaging
customisation
convenience
design
customer service

Question 17

what is the transformation process?

Answer 17

where value is added to inputs to create outputs
e.g. accountancy (people –> knowledge –> professional advice
restaurants (people, ingredients –> cooking value –> customer service)

Question 18

how does marketing and branding add value and differentiate products?

Answer 18

-building brand identification and customer loyalty to a brand allows the firm to charge a higher price for its products
-increasing added value

Question 19

how do functions and features add value and differentiate products?

Answer 19

-adding unique features allows the firm to charge a higher price
-increasing added value

Question 20

how does customer service add value and differentiate products?

Answer 20

-businesses that ensure they have a good reputation for customer service can charge higher prices
-increasing added value

Question 21

how does customisation add value and differentiate products?

Answer 21

-allowing customers to design or create products allows the firm to charge a higher price as its an experience
-increasing the added value

Question 22

how does packaging add value and differentiate products?

Answer 22

-superior packing creates an exciting opening experience for the customers
-the firm can charge a higher price for its products
-increasing the added value