Market Positioning, Competitive Advantage, Differentiation and Adding Value

Market positioning is the view that consumers have about what, in relation to those of competitors? (3) Business size and scale Image Return on investment Value for money Quality Promotional strategy Investment strategy Firms will plan marketing activities to shape consumer perceptions and therefore achieve a desired position in the minds of consumers. How do they achieve this? (5) Emphasise how well they look after their staff Emphasise the efficiency of their production processes Emphasise the benefits offered by the product Highlight the USP Emphasise the attributes of the market Emphasise the attributes of the product Emphasise the origin of the product How undifferentiated the product is The classification of the product As some markets change in response to shifting consumer demand, some businesses may need to reposition their products. How can this be achieved? (3) Changing the organisational structure Changing the remuneration packages for staff Changing the location of the firm Changing the ownership structure Changing the target market Changing the product features Changing the product range Market Mapping A market or perceptual map typically involves a two-dimensional diagram that shows two of the attributes or characteristics of a brand and those of rival brands in a market.If a business wants to find out where its brand is positioned in the market, it might carry out market research. This will help it to understand how customers see the brand in relation to others in the market.A business might also want to launch a new brand. Having decided on a target market, market research might show what characteristics the brand must have to succeed in that market. The results of market research can be displayed on perceptual maps.There are, however, some limitations with regards to market mapping.1) The maps are only two-dimensional, which means that only two attributes can be analysed on the same map.2) They can be more useful for individual brands rather than a corporate brand image.3) The information needed to plot the maps can be expensive to obtain, requiring the use of primary market research.4) There may be a difference between the consumers’ perception of the brand’s benefits and the actual benefits. An advantage that enables a business to perform better than its rivals in the market, is known as what? Differentiation Competitive advantage Adding Value Unique selling point How businesses develop competitive advantage Sort the following descriptions into their correct groups (one per group): Product Design Make it superior to others i.e. with more features Product Quality A premium product can command a premium price, however costs may be higher Promotion Creative, persuasive advertising can change peoples’ perceptions Customer Service Some businesses pay less attention to the product and rely on how they interact with customers, in order to gain an edge Delivery Times Short lead times can give you an advantage Economies of Scale Efficient firms can produce at lower cost and thereby charge lower prices Flexibility Adaptable and customisable products are attractive to some customers and can give an advantage Ethical Stance By treating suppliers and workers fairly, as well as minimising negative impacts on the environment Focusing on a Particular Market Segment Especially if that group of people is not being currently catered for by other firms An attempt by a business to distinguish its product from those of competitors, is known as what? Competitive advantage Promotion Design mix Product differentiation Differences can be real or what? Perceived Fake Indefensible Copied Purpose of product differentiation Match each purpose with its most appropriate description Flexible pricing Clear physical differences or perceived value might mean you can charge more Recognition Consumers often find products more appealing if they stand out from the pack, other consumers just like to be different Extend product range If the business can differentiate it may be able to serve more than one segment in the same industry, e.g. cruise ships offer differently priced cabins, itineraries and facilities Brand development A business that can differentiate its product successfully for a sustained period of time can develop a strong position in the minds of consumers Overcome competition By creating real or perceived differences businesses can attract new customers and win larger market shares, then hopefully be able to lower costs and raise profits The extra features that may be offered by a business when selling a product, such as high quality customer service, which helps to exceed customer expectations, are known as what? Promotional activities Market positioning Differentiation Added value Adding value to products and services Match each method of adding value with its correct example: Bundling e.g. package holidays Customer service e.g. moments of truth, after-sales care Speed of response to customers e.g. reduce or eliminate waiting times Packaging e.g. gift-wrapping, customised bags etc. Frequent buyer offers e.g. reward loyalty, preferential pricing, free products Customisation changing or adapting product designs to meet the needs of individual customers e.g. embedding a customer’s logo or brand in the product Benefits of adding value for businesses 1) It may be possible to charge a higher price Although businesses may want to disguise the higher price so that the value-added element appear free, e.g. getting ‘free’ holiday insurance when a package is purchased.2) Can be used to differentiate a product and gain competitive edgeE.g. some customers may prefer to shop with retailers that offer high-quality customer service.3) It may help a business protect itself from competitors charging lower prices in a bid to steal customers4) Enables them to focus more closely on its target market segment.For example, by meeting the needs of customers more effectively.