1.1.3 Market Positioning

Question 1

What is market positioning?

Answer 1

Market positioning refers to the process a business goes through when launching a new product or service
- the business decides where they want to position the product in the market with regard to price, quality, branding, and customer perception

Question 2

What is market mapping?

Answer 2

Market mapping is a tool for identifying the position of a product within a market
- a market map is a 2D diagram that shows the attributes or characteristics of a product in comparison to rivals products

Question 3

Market map analysis

Answer 3

• if there are no spaces left on the market map, it indicates that the market is saturated, meaning there are no opportunities to exploit a market niche in the market
  
  • competition is likely to be high and profits low
• a space in the market map may indicate the existence of a market niche in

Question 4

Strengths and limitations of market mapping

Answer 4

Strengths:
- market gaps can be identified which may enable a business to come up with ideas for new products
- comparisons can be made between a business’ product and those of its rivals
- simple to construct and offer a visual illustration of the position of a product in the market
Limitations:
- a gap in the market may exist because it is not profitable to fill
- mapping a market may require primary research which can be expensive
- only two criteria can be chosen which may prove too simplistic
- markets are often dynamic and a market map only provides insight at a specific point in time

Question 5

What is competitive advantage?

Answer 5

Competitive advantage refers to the features of a business and its products that are perceived as superior to its rivals by customers

Question 6

What are methods of adding value?

Answer 6

• marketing & branding
• functions & aesthetics
• packaging
• customisation
• customer service
• convenience
• design
• product differentiation

Question 7

What is product differentiation and what is the purpose of it?

Answer 7

• product differentiation is an attempt by a business to distinguish its products from those of competitors
• it helps the business to increase demand for its products, increase brand loyalty, and allow the business to charge higher prices