Summary
Summary Market Positioning
- Institution
- PEARSON (PEARSON)
Describes market mapping, competitive advantage, product differentiation, and added value
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Theme 1 Topic 11Market Positioning
Market Mapping
Market Mapping – considering some features of a market on a diagram and plotting where different
competitors are in relation to these features
Examples of the features on a market map:
High price vs low price
High quality vs low quality
Necessity vs luxury
How might a market map be used?
Identify where there are gaps in the market – where there are customer needs not being met
- Have to ensure that market research confirms whether there is any demand for the gap in the
market. There may be a reason for the gap.
To reposition a brand – a business could improve quality and design, allowing them to charge a higher
price
Competitive Advantage
Competitive Advantage – an advantage a business has over its competitors, allowing it to succeed in the
market.
A business can have a competitive advantage through the following…
Price Reputation/image
Adding value Advertising/marketing
Innovation Branding
Reliability Convenience
Quality Customer service
The Purpose of Product Differentiation
Product Differentiation – how a business differentiates its products. Customers must be able to perceive this
difference and may be willing to pay a premium price for the product.
Methods of Differentiation
Reputation
Customer service or after sales service
Value for money
Product features
Product differentiation can be perceived (customers think it is different) or actual (has a genuine unique
feature).
Benefits of Product Differentiation
By being different to rivals it protects sales – customers are loyal to the product/brand
It enables higher prices to protect profit margins – demand is not too price elastic if the product is
more unique = if costs increase prices can increase.
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