1.1.3. – Market positioning– syllabus Candidates should be able to: Define market mapping Assess the factors influencing the competitive advantage of a.

1.1.3. – Market positioning– syllabus

Candidates should be able to:•Define market mapping•Assess the factors influencing the competitive advantage of a product or service•Describe the purpose of product differentiation•Evaluate how firms might add value to products/services

Market positioning and mapping – definition

Market positioning is concerned with the perceptions _________ have about products, e.g. factors such as quality, USP, status and value for money. Consumers often position a product or firm in relation to its ______________

Market mapping is used when launching a new product or service in order to decide _______ to position the brand in relation to customer perceptions and the positioning of competitors.

Market mapping – two stages

1. Identify two pairs of key features of consumers and their perceptions within a market – these will relate to tastes, features of the product etc. (this is subjective and up to the business to decide, may use market research)2. Place every brand/company in a grid – this will show where the competition is concentrated and where there might be ‘gaps’ in the market

Market mapping – fast food example

1. The key features could be young versus older consumers and enjoyable versus healthy!

2. Place every brand/company in a grid – this will show where the competition is concentrated and where there might be ‘gaps’ in the market. McD, BK, fish & chips, M&S sandwiches, Subway

younger customer older customer

healthy

enjoyable

Market mapping – benefits and drawbacks

Competitive advantage - definition

“Competitive advantage is a company’s ability to perform in one or more ways that competitors cannot or will not match” Philip KotlerIt may be through product differentiation or promotion.What is the competitive advantage of Lidl & Aldi? Waitrose? What might this mean for Tesco?

Product differentiation?

What is product differentiation?

E.g.

How many substitutes will there be for a highly differentiated product?

The differentiation is referred to as the USP, what does this stand for?

How might product differentiation be created?

Actual or perceived differences:

What is the purpose of product differentiation?

Michael Porter’s methods of gaining competitive advantage

Cost leadership – aim to have the

Differentiation – aim to offer a

Focus – aim to meet the needs of a

Adding value

• Adding value is the value of the process of transforming the materials (inputs) into products and services (outputs)

• How is it measured?

• E.g. what is the figure in catering?

• When a business adds value, the value of the finished product is ___________ than the sum of all the values of the inputs

How can a business add value and what are the benefits?