Market Positioning | Theme 1

Question 1

What is market positioning?

Answer 1

Market positioning is concerned with how customers perceive a product in relation to its competition.

Question 2

What does a market map illustrate?

Answer 2

A market map illustrates the range of positions that a product can take in a market based on two important dimensions.

Question 3

What factors do consumers consider when comparing products?

Answer 3

Consumers may consider the benefits offered by the product and the unique selling point (USP).

Question 4

What are the three key limitations of market maps?

Answer 4

1. Maps are two-dimensional, analyzing only two attributes.
2. Information needed can be expensive to obtain.
3. There could be a difference in consumers’ perception of benefits and actual benefits.

Question 5

What are the advantages of using a market map?

Answer 5

1. Helps spot gaps in the market.
2. Useful for analyzing competitors.
3. Encourages use of market research.

Question 6

What are the disadvantages of using a market map?

Answer 6

1. A gap doesn’t guarantee demand.
2. Not a guarantee of success.
3. Reliability of market research may vary.

Question 7

What is a competitive advantage?

Answer 7

A competitive advantage allows a business to be more successful than its competitors.

Question 8

What are some factors contributing to competitive advantage?

Answer 8

Factors include quality, advertisement, target audience, display, good service, accessibility, ease of use, brand image, sponsorships, USP, ethical stance, and market segment focus.

Question 9

What is product differentiation?

Answer 9

Product differentiation arises when customers perceive a distinct difference between your product and competitors’ alternatives.

Question 10

What is the purpose of product differentiation?

Answer 10

1. Source of competitive advantage.
2. Ideally hard to copy.
3. Build intangible value.
4. Strengthen customer loyalty.
5. Allow for higher price.
6. Higher profit margins.

Question 11

What is added value?

Answer 11

Added value transforms inputs to outputs, defined as the difference between the price of the finished product/service and the cost of inputs.

Question 12

What are ways to add value?

Answer 12

1. Build a brand.
2. Deliver excellent customer service.
3. Add desired product features and benefits.
4. Operate efficiently.

Question 13

What are the business benefits of adding value?

Answer 13

1. Charge a higher price.
2. Create a point of difference with competitors.
3. Protection against competitors’ lower prices.
4. Focus on target market.