Theme 1 Topic 11 - Market Positioning Flashcards
Define Market Mapping
Considering some features of a market on a diagram and plotting where different competitors are in relation to these features
What are three examples of features on a market map?
High price vs low price, High quality vs low quality, Necessity vs luxury
What are two ways to use a market map?
Identify gaps in the market, To reposition a brand
Why must market research also be done in addition to market mapping?
To confirm whether there is any demand for the gap in the market - there may be a gap for a reason
Define Competitive Advantage
An advantage a business has over its competitors, allowing it to succeed in the market
What are four examples of ways a business can have a competitive advantage?
Price, Reputation, Customer service, Innovation
Define Product Differentiation
How a business makes it products different to a competitors
What may customers be willing to pay if they can perceive product differentiation?
A premium price
What are four examples of methods of differentiation?
Reputation, Customer service, Value for money, Product features
Define Perceived Product Differentiation
Customers think the product is different
Define Actual Product Differentiation
The product has a genuine unique feature
What are two advantages of product differentiation?
Protects sales as it makes customers loyal, Enables higher prices to be charged to protect profit margins
Define Added Value
The process of increasing the worth of resources by modifying them to make them worth more in the eyes of the consumer
Added Value =
Selling Price - Cost of Raw Materials
What is the amount of added value determined by?
The price a customer is persuaded to pay
