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
• The process of increasing the worth of resources by modifying them. It is the difference between the cost and selling price.

  Added value
• 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
• 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 competitors by customers


  distinctive and defensible
• • 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