1.1.3 Market Positioning

Market Positioning

🔗 Understanding where a product/service should be positioned within a market based on customer perceptions.

🔑 Effective market positioning can:

• Distinguish business products from the competition
• Highlight the business' competitive advantage as customers can compare to the competition
• Effective market positioning may only be beneficial if other factors within the business are good (e.g, customer service) The success of market positioning depends on the quality of other business factors. e.g, customer service

Market Mapping

🔗 Used to place products in a position in the market based on how customers view the product. Based on two qualities customers feel are important 📝 eg, price and quality.

• By looking at what competitors offer, the business can identify a gap in the market, an increased chance of attracting customers
• Make the business more efficient, resources focused on part of the market that isn't overcrowded
• A gap in the market doesn't guarantee success, there may be low demand - more research needed
• Only two variables considered, very simplistic, increases risk, may not be demand if there are other important factors The success of market mapping depends on whether there is enough demand for the product to stimulate sales

Competitive Advantage

🔗 Unique features of a business and its products that are perceived by customers as superior to the competition, helping the business to perform better than its rivals.

📝 Eg. Lower prices than rivals, high product quality, ethical considerations

Adding Value

🔗 The difference between how much it costs to make a product and how much it is sold for when finished

📝 e.g. Businesses can add more value when their product is high quality or has an attractive image as it increases the worth customers place on a product, allowing the business to charge more.

Product Differentiation

🔗 The extent to which consumers perceive a business and its products to be different from its competitors

• Encourage innovation within the business
• Product is unique from competitors, attracts customers
• Costly to innovate products
• Innovations and changes may not be enough to increase sales, opportunity cost as money may be wasted with no successful results The success of product differentiation depends on the ability of new modifications to attract sales, businesses run the risk of no demand.