market positioning
market mapping - is considering some features of a market on a diagram and plotting where different competitors are in relation to these features
examples of those dimensions might be:
high price vs low prices
basic quality vs a higher quality
necessity vs luxury
how might a market map be used?
one way is to identify where there are "gaps in the market" - when customer needs are not being met
the trick with a market map is to ensure that market research confirms whether or not there is actually any demand for a possible "gap in the market" there may be good reason why customers do not want to buy a certain product that might, potentially, fill a gap
competitive advantage - an advantage a business has over its' competitors, allowing it to succeed in the market
product differentiation - how a business differentiates its products; through reputation, service features or value
methods of product differentiation
through reputation
through customer service or after sales service
through value of money or product features
benefits of product differentiation
by being different to rivals its protects sales. for example a cut in the price of honey will not effect the price / sales of marmite as it is a unique spread with a loyal set of consumers
it enables higher prices to protect profit margins. demand is not too price elastic if the product is more unique. therefore if costs go up the firm can increase prices
adding value - is the process of increasing the worth of resources by modifying them to make them worth more in the eyes of consumer
cost advantage: a business has efficient operations in provide low cost value to consumers, ex. Aldi
differentiation advantage: resources are used by a business to create superior value for the consumer, ex. BMW
product differentiation may be perceived, ex. consumers think it is different or actual - it has a genuine difference