market positioning Flashcards
a market map shows:
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
it’s laid out as a:
matrix, and the products or brands are positioned on it according to where they are judged to lie between each pair of extremes
market maps can:
reveal gaps in the market
these gaps can be:
spotted and filled by people starting up new businesses or by existing businesses
businesses can fill the gaps with:
new products or brands, knowing that there won’t be any close competitors
other market research will be needed to find out:
if there is actually demand for a product in that gap though. e.g is there a market for high-quality shirts for children?
market maps can show:
a business who its closest competitors are
it can then plan:
the best marketing strategy to persuade customers away from them
if the sales of a product are declining, the business might use a:
market map to find out how customers view their product and then try to reposition it on the map
market maps can show the:
features provided by the most popular brands, which can indicate the benefits considered most desirable by the target market
market maps can show how much:
customers expect to pay, e.g. for cameras of varying quality. this can help a business with its pricing strategy
however, market mapping can:
simplify things too much
the positions of products and brands on a market map are usually a:
matter of opinion, and may be biased. for example, different people might have different views on whether a product is high or low quality
a competitive advantage is a:
condition which allows a firm to generate more sales or be more profitable than its rivals
to achieve a competitive advantage, a firm needs to:
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
lower costs:
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
the business may decide to:
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
product innovation:
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
by producing new and unique products that consumers want to buy:
sales will increase - this gives the business a competitive advantage
advertising and marketing:
the more a firm advertises its product and markets it to make it attractive to buyers, the more likely it is to generate sales
the firm could also focus on creating a:
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
product differentiation:
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
a firm can emphasise the product’s USP in its:
marketing or branding so that the product really stands out from competitors’ products
reliability and quality:
some consumers are prepared to pay more for a product that is seen to be more reliable and better quality than a competitor product
maintaining a:
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
good customer service:
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
customers may also be prepared to:
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
convenience:
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
adding value means:
increasing the difference between the cost of making the product and the price that the customer pays. this usually increases profits
added value =
price product is sold for - cost of making product
added value can be achieved by:
either increasing the selling price of the product or by reducing the costs of making the product
lots of the strategies businesses use to gain a competitive advantage (e.g. strong branding, good customer service):
encourage customers to pay a higher price and so add value to the product
