Market positioning Flashcards
What is market mapping?
The process of finding the variables which differentiate brands in the market and then plotting them on a map.
How might market maps be used?
To identify a gap in the market.
By start ups to identify which products to produce or which services to provide so they are market orientated.
By a traditional brand to reposition themselves in the market.
What is a competitive advantage?
An advantage a business has over its competitors, allowing it to generate larger than average turnover for the industry, either in low cost leadership or on price leadership.
- a business can win by being cheaper or by being different.
How can a business achieve a competitive advantage?
Price: good value for money
Added value: adding different things to a product to make them more appealing eg battered fish
Innovation: New ideas, uniqueness
Reliability: customers want to be able to trust that the product will do what it should
Quality: Good stability and durability improves customer satisfaction.
Reputation: Customers are more likely to want to buy from companies that are well known for being good.
Advertising: good ads make people remember the product
Branding: creates distinctiveness which gives products a brand exclusive appeal, especially when followed by celebrities.
Convenience: readily available, eg Tesco sells everything and is everywhere
Customer service: Customers want businesses to get things right the first time and deal with their complaints fast and efficiently.
What is product differentiation?
Where a product is different from the competition in a way perceivable to customers making them willing to pay a premium price for this product.
What are the methods of differentiation?
- reputation
- customer or after sales service
- value for money
- product features
What is the definition of added value.
The difference between the price that is charged to the customer and the costs of inputs required to create the product. This can be achieved through the product itself or the way customers perceive the product.
How can a business add value?
Design- develop new technology/ design features to make their product unique
Production- quality ensures a higher price can be charged, efficiency helps cut costs of the input
Marketing- creating an image that makes the product more desirable
Can be added through process, additional ingredients, convenience or packaging.
What are the benefits of adding value?
- the more value added, the more can be charged = higher profit margins
- protection against competitors offering lower prices
- encourages customer loyalty which leads to repeat business.
