1.1.3 Market Positioning

Market Mapping

Market Mapping

• Process of positioning the products or services a business intends to provide to the market.

• Can identify a gap in the market or reposition a product.

• Construct a diagram of where competitors are on two axes to find a gap.

Competitive Advantage

• A feature that gives a business an advantage over competitors.

• Achieved by using resources to achieve cost or differentiation advantages.

• Porter's strategy: be lowest cost or highest differentiated, not in the middle.

Product Differentiation

• Distinguishing a product/service from competitors.

• Achieved through unique features or marketing.

• Allows for brand loyalty and a premium price.

Added Value

• Difference between price charged and cost of production.

• Achieved by improving the product/service or how it is perceived.

• Benefits: higher price, protection against low prices, customer loyalty.

Examples of Competitive Advantage:

• Cost Advantage: same quality at a lower price (ASDA, Ryanair).

• Differentiation Advantage: superior product through design, research, branding (Dyson, Apple, Waitrose).

Ways to Achieve Added Value:

• Design: improving on design features to make a product unique.

• Production: improving quality and efficiency.

• Marketing: creating an image that makes the product more desirable.

Porter's Basic Rule:

• Lowest Cost: offering a product/service at the lowest cost.

• Differentiation: offering a product/service that stands out from the competition.

Product Differentiation Benefits:

• Gains brand loyalty and allows for a premium price.

• Lowers PED and makes it more inelastic to increase prices.

Added Value Benefits: