Market Postioning Flashcards
Marketing positioning
How individual products or brands are seen in relation to their competition by the consumers
Product differentiation
When customers perceive a distinct difference between your product and the alternatives provided by competitors
Dimensions that can be used on a “positioning map”
Low price/ high price Basic quality/ high quality Low volume/ high volume Necessity/ luxury Light/ heavy Simple/ complex Traditional/ modern Low tech/ high tech Unhealthy/ healthy
What is a positioning map?
Illustrates the range of “positions” that a product can take in a market based on two dimensions that are important to customers
Advantages of positioning maps
- helps spot gaps in the market
- useful for analysing competitors
- encourages use of market research
Disadvantages of positioning maps
- just because there is a “gap” doesn’t mean there is demand
- not a guarantee of success
- how reliable is the market research?
Effective differentiation allows a business to:
- compete effectively: source of competitive advantage, hard to copy
- protect and build a brand: build intangible value, strengthen customer loyalty
- add more value: strong differentiation should allow a higher prices, higher profit margins
Key requirements for effective differentiation are that the product is:
- capable of delivering what is important to customers
- distinctive
- communicated and viable to customers
- not easily copied by competitors
- adorable by the target customers
- profitable
What is a USP
Unique selling point
Something that sets a product apart from its competitors in the eyes of customers
What is added value?
The value of the finished good or service over and above the cost of achieving it.
This achieved when a business increased the worth of its factor inputs by creating a new output product
What is the transformation process?
Describes what happens inside the business. This is where value is added to create outputs
Ways of adding value
- USP
- Technology
- Branding
- Customer service
- Manufacturing
Benefits of added value
- charging a higher price
- creating a point of difference from the competition
- focusing a business more closely
Competitive advantage- marketing positioning
Having an edge over rival products
- it may be based on low costs and prices, an innovative design or a reputation for customer service
Benefits of differentiating
- can charge a premium price
- gain brand loyalty
- add value
