Market Positioning

• what is market positioning?


  refers to the process a business goes through when launching a new product/service
• what is market mapping?

  a tool for identifying the position of a product within a market
• a market map is a two-dimensional diagram that shows the attributes/characteristics of a product in comparison to rivals products
• price + quantity and age + income are the main two characteristics used in a market map
• what happens if there is no space left on market map?

  • indicates market map is saturated (reached its maximum)
  • competition is high
  • profits low
• space on market map indicates existence of market niche
• gap in market map does not represent a worthwhile market as business would find it impossible to build/maintain a loyal customer base
• usefulness of market mapping:

  • market maps can be identified - business can come up with new ideas
  • comparisons can be made between business' products and its rivals
  • market maps are simple to construct + offer a visual illustration of position of product in market
• limitations of market mapping:

  • gap in the market - means its not profitable to fill
  • mapping a market requires primary research - expensive
  • only two criteria can be chosen - too simple
  • markets are often dynamic - market map only provides insight at a specific point in time
• what is product differentiation?


  an attempt by a business to distinguish its products from those of competitors
• successful product differentiation helps business to increase demand for its products, increase brand loyalty, and allow business to charge higher prices
• product differentiation may be tangible (clearly visible) or a perception that is created about product in consumer's mind
• development of product differentiation helps firm to create a unique selling point for products - used in marketing
• strong product differentiation helps firm to develop its competitive advantage
• creating functions/features of product (or firm) - helps to stand out from its competitors
• what is packaging?


  superior packaging create an exciting opening experience for the customer, allowing firm to charge higher price for products - increasing added value
• what is customisation?


  allowing customers to design/create their products allows firms to charge higher prices thus increasing added value
• what is customer service?

  business that ensure that they have a good reputation for customer service can charge higher price for their products thus increasing added value
• what does functions and features mean?

  adding unique features allows firm to charge a higher price for its products thus increasing the added value
• what does marketing and branding mean?

  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
• what characteristics adds value to products/services?

  • convenience
  • product differentiation
  • design
• what is competitive advantage?

  refers to the features of a business and its products that are perceived as superior to its rivals by customers
• competitive advantage is how a firms product is made distinctive and defensible
• what does distinctive?


  means that it is different from the competitors
• what does defensible mean?

  means that the business can prevent competitors from copying it
• sources of competitive advantage:

  • customer service
  • delivery time
  • design
  • quality
  • ethical stance
  • brand image & reputation
  • customer service
  • price
• example of source of business competitive advantage:

  • quality
  • quality
  • delivery time
  • low price
  • reliability
  • ethical stance
  • design
• ways a firm can gain competitive advantage:

  • innovation
  • reputation(branding)
  • building strong relationships with stakeholders
  • adding value
  • differentiation
  • market segmentation
  • price leadership