1.1.3.Market Positioning

Question 1

Market mapping

Answer 1

-Tool for identifying the position within a market

                        High Quality 

Low Price High Price

                        Low Quality 

-No spaces on map=Saturated market. No opportunities to exploit market niche in market
-Competition likely to be high+profits low
-Gap in market may exist as it isn’t profitable to fill up

Question 2

Competing advantage of product or service

Answer 2

Sources of competitive advantage:
-Customer service
-Price
-Reliability
-Ethics
-Design
-Quality
-Brand image and reputation
-Delivery times

Question 3

Purpose of product differentiation

Answer 3

-Attempt to distinguish from rivals
-Unique selling point (May be tangible-visible or perception is created about product in consumers mind)
-Brand loyalty increases, increases demand for its product, and allows the business to charge higher prices

Question 4

Adding value to products/services

Answer 4

-Difference between the price that is charged to customer and the costs of inputs required to create the product or service ie. Customers willing to pay more when product has a better feature, packaging, customisation, customer service, continence, design, product differentiation, marketing/branding, function
-Added value adds raises costs but it’s worth it if the increase in selling price outweighs costs associated with the methods
- Effectively adding value boosts profit margins as gap between selling price and VC widens