1.1.3

Market Positioning

The process a business goes through when launching a new product or service, deciding its position in the market regarding price, quality, branding, and customer perception.

Market Mapping

A tool for identifying the position of a product within a market using a two-dimensional diagram comparing product attributes to rivals.

Market Map

A two-dimensional diagram that shows the attributes or characteristics of a product in comparison to rivals’ products.

Market Saturation

A condition where no spaces are left on the market map, indicating high competition and low profits.

Market Niche

A gap in the market that may indicate an opportunity, but requires careful research before business commitment.

Usefulness of Market Mapping

Identifies market gaps, allows comparisons between products, and provides a visual illustration of product positioning.

Limitations of Market Mapping

May require expensive primary research, can only use two criteria, and provides insight at a specific point in time.

Competitive Advantage

Features of a business and its products perceived as superior to rivals by customers, making the product distinctive and defensible.

Distinctive

A characteristic that makes a product different from competitors.

Defensible

A feature that allows a business to prevent competitors from copying its product.

Sources of Competitive Advantage

Innovation, reputation, strong stakeholder relationships, adding value, differentiation, market segmentation, and price leadership.

Product Differentiation

An attempt by a business to distinguish its products from competitors through unique functions or features.

Unique Selling Point (USP)

A feature that helps a product stand out in marketing efforts.

Tangible Product Differentiation

Clearly visible differences in a product.

Perceptual Product Differentiation

Differences created in the consumer's mind about a product.

Adding Value

The difference between the price charged to the customer and the cost of inputs required to create a product or service.

Marketing and Branding

Building brand identification and customer loyalty to charge higher prices, thus increasing added value.

Functions and Features

Unique features that allow a firm to charge higher prices, increasing added value.

Customer Service

A good reputation for customer service that enables a business to charge higher prices, increasing added value.

Customization

Allowing customers to design their products, enabling higher pricing and increased added value.

Packaging

Superior packaging that enhances the customer experience and allows for higher pricing, thus increasing added value.