1.1.3 Market Positioning

• Market Positioning

  • Process in which the business decides where they want to position the product in the market with regard to price, quality, branding, and customer perception.
• Market Mapping

  A diagrammatic technique that enables business to display the perception of customers
• Market mapping is a tool for identifying the position of a product within a market.
• Usefulness of market mapping

  • Market gaps can be identified - enables business to launch new products.
  • Compare competitor's products.
  • Simple to construct & offers a visual illustration of position of product in market.
• Limitation of market mapping

  • Gap in market may exist because it is not profitable to fill.
  • May require market research which may be expensive.
  • Only 2 criteria can be chosen - too simplistic.
  • Market is dynamic - market map only provides a specific points in time.
• No space on the map indicates market is saturated.

  No opportunities to exploit a market niche.

  Competition is high & profits is low.
• No gap = impossible to build and maintain a loyal customer base.
• • Competitive advantage refers to the features of a business and its products that are perceived as superior to its rivals by customers.
• Low cost strategy

  • Refers to manufacturing cost not selling cost.
  • Successful in mass & niche markets.
  • Cost leadership in mass & focused cost leadership in niche market.
  • Effective for large companies.
• Differentiation Strategy

  • Successful in mass & niche.
  • Product has to appear better than competitor.
  • Promotion must create desire for product.
  • Operational objectives focusing on R&D.
• • Product differentiation may be tangible (clearly visible) or it may be a perception that is created about the product in the consumer's mind.
• Successful differentiation = increase demand - increase brand loyalty - can charge higher prices.
• Adding value is the difference between the price that is charged to the customer and the cost of inputs required to create the product or service.
• Adding value - marketing & branding

  • brand loyalty = can charge higher prices = increased added value.
• Adding value - convenience 


  Saving customer's time by adding features that make using the product easier = willing to pay more.
• Adding value - Customer service


   good reputation for customer service can charge a higher price for their products.
• Adding value - customisation


  Allowing customers to design/create their products = firm to charge a higher price = increasing the added value.
• Adding value - packaging


  Apple products are well known for their superior packaging, which creates an exciting opening experience for the customer = charge higher prices = added value.