1.1.3 market positioning

What is a Market map?

A market map is an axis with two characteristics like price and quality to map out different products in a market.

What are the advantages of market mapping?

it can help businesses to find gaps in market and they can research that if it looks profitable, and can also help businesses decide if entering a market is a good idea.

What are the disadvantages of market mapping?

Just because it finds gaps in the market doesn’t mean that they will be profitable - they are more likely to lose Money in most cases as with the model being so simple the gap would likely have already been filled.

What is a competitive advantage?

It is something about your business that is better than competitors eg. lower production costs meaning that the business can afford to charge a lower price or potentially having unique functions of your product / service.

What is differentiation?

Something that makes your product different from competitors - (Brand image / features)

What are the likely benefits of differentiation?

People may buy your products over competitors (your product is unique) people will be more interested in purchasing.

What are the drawbacks of differentiation?

It usually comes with high cost, this can affect profit margins as sales are indefinite. - Would likely cause a higher price too.

What is added value?

Making the product worth more to a customer than the cost of production (the gap between cost and selling price) This is done by advertising, brand image, packaging and distribution.

what are the advantages of added value?

Customers are likely to pay more for products they see as more valuable. this means the business can increase their priced which can lead to higher profit margins.

What are the disadvantages of adding value?

It means the business is spending more Money (better materials, distribution, branding) - could lead to lower profit margins if people are not willing to pay then extra (they may not care about it)