1.1.3 Market Positioning

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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: