Market positioning

Market Positioning

• How customers perceive a product in terms of image, value for money, quality, etc., compared to competitors.

Product vs. Market Orientation

• Product Orientation: Focus on designing and producing the product, assuming it will sell itself.
• Market Orientation: Identify customer needs through market research and produce products to meet those needs.

Advantages of Market-Oriented Approach

• Can respond quickly to market changes.
• Stronger position to respond to competitors.
• Higher confidence of success when launching a product.
• Requires market research, appropriate distribution, meeting quality expectations, and pricing in line with consumer expectations.

Choice of Approach

• Depends on the nature of the product, preferences of managers, market size, and amount of competition.

Market Positioning

• Businesses need to carefully position their products in the market to sell.
• Ways to position products include highlighting benefits, characteristics/qualities, and unique selling points (USP).
• Markets change over time, requiring businesses to reposition products.

Market Mapping

• A diagram that compares products/brands to competitors based on two characteristics that customers perceive.
• Requires market research to determine product positioning.
• Helps businesses decide if a product should be repositioned.
• Axis choices should be sensible.

Market Segmentation

• Dividing the market into smaller groups with similar characteristics and needs.
• Segments can be targeted specifically with the right marketing mix.
• Businesses may produce one product for one segment, a range of products for different segments, or products for all consumers.

Ways to Segment a Market

• Geographic, demographic (age, gender, income, social class, ethnicity, religion), psychographic (attitudes, opinions, lifestyles), and behavioral (usage rate, loyalty, time of consumption) segmentation.

Benefits of Market Segmentation

• Increased revenue, increased customer loyalty, and avoidance of wasted promotional resources.

Developing a Competitive Advantage

• Product design, product quality, promotion, customer service, delivery times, economies of scale, flexibility, ethical stance, focusing on a segment, product differentiation, adding value.

Product Differentiation

• Distinguishing a product from competitors by making it sufficiently different.
• Can result in higher prices, increased brand recognition, and increased sales.

Adding Value

• The difference between the selling price and the cost of brought-in materials and components.
• Value\,added = Selling\,Price - Cost\,of\,Materials
• Value added money can contribute towards other business costs such as advertising and energy use.

Achieving Added Value

• Packaging, bundling, customizing, and customer service.
• Can lead to higher prices and a competitive advantage.