1.1.3 Market Positioning

• Market mapping


  using a graph to plot competitors and products to understand competitor behaviour and spot gap in the market
• Purposes/benefits of market mapping

  Helps businesses make decisions about new/existing brands and can help reposition the brand

  Identifies gaps and niches in market filled by new products
• Features of market mapping

  evaluating business ideas and products/services, setting out features of a market/product

  consider value of market mapping to start-ups and existing businesses launching a new product like Burberry
• How can companies gain an advantage over their competitors?

  • price
  • adding value
  • innovation
  • quality
  • reputation
  • customer service
  • branding
• Product differentiation can be used as a route to providing a competitive advantage and how they might distinguish their product from their competitors using distinct features, USP marketing

  Example: Green & Black chocolate made with Fair Trade cocoa and sugar
• Added value is the difference between the price that is charged and the total cost of the inputs required to create the product and can be achieved by improving the product/service itself or the marketing of the product
• Cost advantage - business has skilled worked force and efficient operations to provide low cost value to consumers

  Differentiation advantage - deliver benefits that exceed competing products
• Differentiation ways

  • USP
  • quality
  • reputation
  • branding
  • convenience/customer service
• Added value is the difference between price charged to customer and cost required to create and is done by design, production and marketing
• Benefits of adding value

  • charge higher price
  • customer loyalty
• Market positioning refers to the process a business goes through when launching a new product or service
• • Market mapping is a tool for identifying the position of a product within a market
  • A market map refers to a two-dimensional diagram that shows the attributes or characteristics of a product in comparison to rivals’ products
  • Only two criteria can be chosen e.g. price and quality, age and income, etc.
• If there were no spaces left on the market map, it indicates that the market is saturated

  • This means that there are no opportunities to exploit a market niche in the market
  • Competition is likely to be high and profits low
• Usefulness of market mapping

  market gaps can be identified

  comparisons between products of rivals

  offer visual representation of position of product on market
• limitations of market mapping

  gap in market may exist because it is not profitable to fill

  mapping market requires primary research - expensive
• Competitive advantage refers to the features of a business and its products that are perceived as superior to its rivals by customers


  distinctive and defensible
• gain competitive advantage including innovation, reputation (branding), and building strong relationships with stakeholders, adding value, differentiation, market segmentation and price leadership
• • Strong product differentiation helps the firm to develop its competitive advantage
  • The development of product differentiation often helps a firm to create a unique selling point for its product which can be used in marketing
• • Successful product differentiation helps the business to increase demand for its products, increase brand loyalty, and allow the business to charge higher prices
• Marketing and branding adding value

  Building brand identification and customer loyalty to the brand allows the firm to charge a higher price for its products thus increasing the added value
• Functions and features adding value

  Adding unique features allows the firm to charge a higher price for its products thus increasing the added value
• Customer service adding value

  Businesses that ensure they have a good reputation for customer service can charge a higher price for their products thus increasing the added value
• Customisation and packaging adding value

  Allowing customers to design or create their products allows the firm to charge a higher price thus increasing the added value

  Apple products are well known for their superior packaging which creates an exciting opening experience for the customer. This allows the firm to charge a higher price for its products thus increasing the added value