Market Positioning(1.1.3) Flashcards
What is differentiation?
the process of making a product stand out from competiotin
What is market postioning?
looks at the process a firm goes through when launching a new product/service or updating it
Four ways of market positioning
product characteristics e.g. safety, style
luxury or necessity approach
origin of the product
product quality
What is repostioning?
as markets change in response to shifting demand some businesses find that they may need to adjust their target market or product features etc
What is market mapping?
a tool used by firms to locate the position of a product within a market
it is a diagram that presents the attributes or characteristics of a product in comparison to rivals
What does it mean if there are no spaces left in a market map?
there are limited opportunities for a business to locate a gap in the map
What does it mean if there are spaces left in a market map?
there is likely a market niche in the area
through research the market gap is needed to ensure viability
Advantages of market maps
markets can be identified-helps business come up with new ideas
comparisons can be made between a business and rivals
simple to construct-offer visual illistration of postion of a product
Disadvantages of market maps
gap in the market may exist as it is not profitable to fill
only two criteria’s can be chosen which may prove too simplistic
market may often be dynamic-market map only provides insight at a specific point in time
What is competitive advantage?
referred to as a set of unique features that are perceived by customers as significant and superior to the competition
Six examples of competitive advantage
better quality product
greater promotion
selling price
delivery times
economies of scale
specific to customers wants and needs-customer service-not fixed
What is product differentiation?
used by businesses when they want to gain a competitive advantage
Five methods of differentiation
flexible pricing
recognition
extend product range
brand development
overcome competition
Advantages of adding value
charge a higher price-increased profit
protection against competitors offering lower prices
customer loyalty
What is adding value?
the difference between the price that is charged to the customer and the cost of inputs required to create the product or service
