market positioning

Question 1

a market map shows:

Answer 1

extremes for two measure that are important to customers, e.g. low price vs. high price, low quality vs. high quality, basic vs. luxurious, young customer appeal vs. mature customer appeal, mass market vs. niche market

Question 2

it’s laid out as a:

Answer 2

matrix, and the products or brands are positioned on it according to where they are judged to lie between each pair of extremes

Question 3

market maps can:

Answer 3

reveal gaps in the market

Question 4

these gaps can be:

Answer 4

spotted and filled by people starting up new businesses or by existing businesses

Question 5

businesses can fill the gaps with:

Answer 5

new products or brands, knowing that there won’t be any close competitors

Question 6

other market research will be needed to find out:

Answer 6

if there is actually demand for a product in that gap though. e.g is there a market for high-quality shirts for children?

Question 7

market maps can show:

Answer 7

a business who its closest competitors are

Question 8

it can then plan:

Answer 8

the best marketing strategy to persuade customers away from them

Question 9

if the sales of a product are declining, the business might use a:

Answer 9

market map to find out how customers view their product and then try to reposition it on the map

Question 10

market maps can show the:

Answer 10

features provided by the most popular brands, which can indicate the benefits considered most desirable by the target market

Question 11

market maps can show how much:

Answer 11

customers expect to pay, e.g. for cameras of varying quality. this can help a business with its pricing strategy

Question 12

however, market mapping can:

Answer 12

simplify things too much

Question 13

the positions of products and brands on a market map are usually a:

Answer 13

matter of opinion, and may be biased. for example, different people might have different views on whether a product is high or low quality

Question 14

a competitive advantage is a:

Answer 14

condition which allows a firm to generate more sales or be more profitable than its rivals

Question 15

to achieve a competitive advantage, a firm needs to:

Answer 15

be doing something different to its competitors. e.g.
- lower costs
- product innovation
- advertising and marketing
- product differentiation
- reliability and quality
- good customer service
- convenience

Question 16

lower costs:

Answer 16

producing a similar product to a competitor’s product but at a lower cost means a business can charge a lower price for its product, which should generate more sales

Question 17

the business may decide to:

Answer 17

still charge a similar price to its rivals, but the lower costs will mean that it makes more profit on each item sold. either way, the lower cost gives it a competitive advantage

Question 18

product innovation:

Answer 18

a business can aim to be the first in the market to introduce new functions for an existing good or create a new, unique product altogether

Question 19

by producing new and unique products that consumers want to buy:

Answer 19

sales will increase - this gives the business a competitive advantage

Question 20

advertising and marketing:

Answer 20

the more a firm advertises its product and markets it to make it attractive to buyers, the more likely it is to generate sales

Question 21

the firm could also focus on creating a:

Answer 21

strong brand image to attract consumers to a product - for example, big global brands use distinctive logos and celebrity product endorsements to help make their products memorable and encourage people to buy them

Question 22

product differentiation:

Answer 22

this is where businesses distinguish their products from competitors’ products. they can do this by creating a unique selling point (USP) - this is an aspect of the product that makes it different from any other on the market

Question 23

a firm can emphasise the product’s USP in its:

Answer 23

marketing or branding so that the product really stands out from competitors’ products

Question 24

reliability and quality:

Answer 24

some consumers are prepared to pay more for a product that is seen to be more reliable and better quality than a competitor product

Question 25

maintaining a:

Answer 25

good reputation for these things helps a business to gain a competitive advantage as it enables higher prices to be charged for its products and generates more sales

Question 26

good customer service:

Answer 26

good customer service is really important before, during and after the time of purchase. polite, efficient and knowledgeable staff can make a customer more likely to make a purchase and more likely to make repeat purchases in the future

Question 27

customers may also be prepared to:

Answer 27

pay more for a product if they feel they are receiving good customer service and know that they will be offered after sales service. for example, Apple stores attract customers by having a good reputation for helpful after sales service and offer workshops on how to get the most out of their products

Question 28

convenience:

Answer 28

generally anything a firm can do to make the buying experience quicker and easier will attract customers, e.g. next day delivery can attract customers to buy from websites

Question 29

adding value means:

Answer 29

increasing the difference between the cost of making the product and the price that the customer pays. this usually increases profits

Question 30

added value =

Answer 30

price product is sold for - cost of making product

Question 31

added value can be achieved by:

Answer 31

either increasing the selling price of the product or by reducing the costs of making the product

Question 32

lots of the strategies businesses use to gain a competitive advantage (e.g. strong branding, good customer service):

Answer 32

encourage customers to pay a higher price and so add value to the product