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Ch3 Market Positioning, Advantages & Disadvantages, Business Benefits…
Ch3 Market Positioning
Market Positioning
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Value Proposition An innovation, service or feature intended to make a company or product attractive to customers.
Used by businesses to decide on how to compete in chosen segments.
The Marketing (Positioning) map Illustrates the range of "positions" that a product can take in a market based on two dimensions that are important to customers
Some possible 'dimensions' of a market map
- Low price & High price
- Low volume & High volume
- Necessity & Luxury
- Light & Heavy
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Product Differentiation
What is it? When customers perceive a distinct difference between your product and the alternatives provided by competitors.
Purpose of Product Differentiation
Protect & Build a Brand
- Build intangible value
- Strengthen customer loyalty
Add more Value
- Strong differentiation should allow a higher price
- Higher profit margins
Positioning vis a vis Competition
- Source of competitive advantage
- Ideally hard to copy
*Product Differentiation by Offering a USP
USP = something that sets a product apart from its competitors in the eyes of customers, both new and existing.
- A source of competitive advantage.
- Helps make demand more price inelastic.
- Should lead to higher profits.
Requirements for Effective Product Differentiation
- Deliver things that are important to customers
- Distinctive, compared with the competition
- Communicated and visible to customers
- Not easily copied by competitors
- Affordable by target customers
- Profitable
Example of Highly Differentiated Products
Fairy Liquid
60% Market Share in the UK Trusted household brand for 120 years
Key Point of Differentiation: "It lasts longer"
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Key Elements of this topic
- Market Positioning
- Market Mapping & Maps
- Positioning & Competitive advantage (USP)
- Product Differentiation
- Adding Value
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