Market positioning 1.1.3 Flashcards
Define product differentiation.
An attempt by a business to distinguish its product from those of competitors.
Definition of unique selling point.
The aspect or feature of a product that clearly distinguishes it from its rivals.
What are the benefits of product differentiation?
Able to charge higher prices.
Brand recognition -different from competitors - your brand stands out.
Higher market share - makes brand stand out more.
What are the drawbacks of product differentiation?
Doesn’t guarantee that customers will buy your product.
Advertising would cost more money- higher costs- limits profits.
Customers not willing to buy at such a high price.
Define competitive advantage.
The conditions or circumstances that put a business in a favourable or superior position compared with its rivals.
What are ways in order to achieve a competitive advantage?
Lower costs.
Design e.g. store layout, aesthetic.
Product range e.g. broad, investing in new stock.
Product quality e.g. durability-raw materials.
Advertising and marketing e.g. endorsement.
Customer service e.g. delivery, refunds.
Ethical stance e.g. fair trade, recycling raw materials.
Define market map.
A diagram that identifies all the products or brands in the market using two key features e.g. price and quality.
What are some advantages to market mapping?
Helps identify gaps in the market.
Easy and quick to do.
Very cost effective.
Good visual illustration of the market.
Encourages market research
what are some disadvantages to market mapping?
Opinion based.
Can be too simplistic e.g. no unit of variables.
Only going off two variables.
Define market positioning.
Refers to how a customer views an individual brand relative to other brands.
Define added value.
The difference or perceived customer difference between the selling price and the cost of bought-in goods and services.
Examples of adding value to products include
Better design/features.
Branding.
Packaging.
Good customer service.
Guarantees.
Frequent buyer offers.
Speed of service and response times to customers.
Why do businesses add value?
To gain a profit. High quality will attract more customers to the business.
What are possible positioning strategies?
Offer more for less.
Offer more for more.
Offer more for the same.
Offer less for much less.
