Market positioning 1.1.3

Question 1

What is market positioning?

Answer 1

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

A tool for identifying the position of a product within a market. A two-dimensional diagram that shows the attributes or characteristics of a product in comparison to rivals’ products.

Question 3

Usefulness of market mapping

Answer 3

• gaps can be identified for new products
• comparison can be made between a business and its rivals
• simple to construct and offer visualisation

Question 4

Limitations of market mapping

Answer 4

• gap may not be profitable
• may require primary research = expensive
• only two criteria chosen so may be too simplistic
• only provides insight at a specific point in time

Question 5

What is competitive advantage?

Answer 5

The features of a business and its products that are perceived as superior to its rivals by customers.
e.g.
- quality
- low price
- reliability
- design
- ethical stance

Question 6

What is product differentiation?

Answer 6

An attempt by a business to distinguish its products from those of competitors. Creates a USP which can be used in marketing. If successful, increases demand, brand loyalty and ability to change higher prices.

Question 7

What is adding value?

Answer 7

The difference between the price that is charged to the customer and the cost of inputs required to create the product or service.

Question 8

Methods of adding value

Answer 8

• marketing and branding
• functions and features
• customer service
• packaging
  -customisation