Market positioning Flashcards
what is market positioning?
process a business goes through when launching a new product or service.
how may a business decided where they position the product in the market?
with regard to the price, quality, branding and customer perception
what is market mapping?
a tool for identifying the position of a product within a market
what is a market map?
refers to a two-dimensional diagram that shows the attributes or characteristics of a product in comparison to rivals’ products
how many criteria can be chosen in a market map?
two
if there is no space in one of the segments of a market map what does it mean?
the market is saturated
what does it mean if a market is saturated?
there are no opportunities to exploit a market niche in the market
what is a market niche?
a gap in the market
what is the likely out come of entering a saturated market?
high competition with low profits
what does a space in the market map mean?
indicates the existence of a market niche
how can identifying market gaps be useful for a business?
enables them to come up with ideas for new products
how can comparisons be made when using a market map?
between products that are in the same segment of the map
why are market maps good?
they are simple to construct and offer visual illustration of the position of a product in the market
why can a gap in the market map be mis leading?
as it may look like market niche but it may only be empty because it is not profitable.
why might mapping a market be expensive?
because is may require primary research
what is a competitive advantage?
refers to the features of a business and its products that are perceived as superior to its rivals by customers
what does a distinctive product mean?
it is different from the competitors
what does a defensible product mean?
businesses can prevent competitions form copying it
what are some methods to add value?
design, convenience, product differentiation, marketing & branding, customer service, customisation, packaging, functions & features
what are some ways a firm can gain competitive advantage?
innovation, reputation (branding), strong relationships with stakeholders, adding value, differentiation, market segmentation, price leadership
what is product differentiation?
an attempt by a business to distinguish its products from those of competitors
what does product differentiation involve?
creating functions or features of the product which help it to stand out from its competitors
what does the development of product differentiation help firms to do?
create a unique selling point which can be used in marketing
what are the two types of product differentiation?
tangible (clearly visible) or perception
what does successful product differentiation help a business to do?
increase demand for products, increase brand loyalty, and allow the business to charge higher prices
what is adding value?
the difference between the price that is charged to the customer and the cost of inputs require to create the product or service
how does marketing and branding add value to firms?
enables them to charge premium prices
how does good customer service add value to a business?
good reputation means they are able to charge higher prices
how can customisation add value?
allowing customers to design or create their products allows the firm to charge higher prices
how can packaging add value?
superior packaging creates exiting opening experience for customers so they are able to charge more
