1.1.3 market positioning

Question 1

What is market mapping?

Answer 1

A two-axis graph that plots competitors based on two variables: price and quality.

Question 2

What are the advantages of positioning maps?

Answer 2

They identify gaps in the market, closest competitors, and indicate if the sales of products are declining.

Question 3

What are the disadvantages of positioning maps?

Answer 3

A gap in the market does not guarantee demand, and the reliability of market research can be questionable.

Question 4

What is a competitive advantage?

Answer 4

A condition that allows a business to generate more sales and be more profitable than its rivals by being different.

Question 5

How can businesses achieve a competitive advantage?

Answer 5

Through lower costs, product innovation, advertising, product differentiation, and good customer service.

Question 6

What is product differentiation?

Answer 6

A unique selling point (USP) that helps a product stand out from competitors and is effectively communicated to consumers.

Question 7

What does adding value mean?

Answer 7

Increasing the difference between the cost of making a product and the price the customer pays, which increases profits.

This can be achieved by increasing the selling price or decreasing the cost of making the product.