1.1.3 Market positioning

Question 1

what are influences on positioning?

Answer 1

-internal constraints
(budgets)
-internal strengths
(creativity/innovation)
-market conditions
(degree of competition)
-external environment
(state of economy)

Question 2

what is a market map?

Answer 2

a visual tool used to identify gaps in the market by comparing different variables

Question 3

what are the benefits market maps?

Answer 3

-helps spot gaps in the market
-useful for analysing competitors
-encourages market research

Question 4

what are the drawbacks of market maps?

Answer 4

-just because there is a “gap” doesn’t mean there is demand for the product
-not a guarantee of success
-how reliable is the market research?

Question 5

competitive advantage is….?

Answer 5

the ability of a firm to produce goods/services that are unique or have some form of superiority
(can be done through differentiation or cost advantage)

Question 6

what factors contribute to competitive advantage?

Answer 6

-product differentiation
-ability to add value
-operational efficiency

Question 7

what is product differentiation?

Answer 7

a unique feature that makes a product/service stand out from other products (USP)

Question 8

product differentiation allows a firm to…?

Answer 8

-change a premium price
-gain brand loyalty
-add value

Question 9

added value is…?

Answer 9

the difference between the price the consumer is charged and the cost of input required to create a product/service

Question 10

value can be added by…?

Answer 10

-design
-USP
-quality
-market

Question 11

what are benefits of added value?

Answer 11

-can charge a higher price
(higher profit margins)
-increase market share
-increase customer loyalty

Question 12

what are drawbacks of added value?

Answer 12

-increased costs