Theme 1 - 1.3 Market positioning

Question 1

What is market mapping ?

Answer 1

A diagram of products in the market to identify a gap in the market.

Question 2

What is added value ?

Answer 2

Added value is the difference between the price that is charged to the customer and the cost of inputs required to make the product.

Question 3

What is competitive advantage ?

Answer 3

Anything that gives a business an edge over its competitors.

Question 4

Give two examples of a competitive advantage.

Answer 4

• Cost advantage.
• Differentiation advantage.

Question 5

What are the ways a business can add value ?

Answer 5

• Marketing - creates a strong brand image that makes the product more desirable.
• Production - achieving high quality goods adds value (will ensure higher prices can be charges).
• Design - developing new technology adds value as it differentiates product.

Question 6

What are some benefits to adding value to a product ?

Answer 6

• Businesses can charge a higher prices.
• Protects businesses against competition charging low prices.
• Develops customer loyalty.