Candidates should be able to: Define market mapping 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 healthy younger customer older customer enjoyable

Market mapping – benefits and drawbacks

It may be through product differentiation or promotion. 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 Kotler It may be through product differentiation or promotion. What is the competitive advantage of Lidl & Aldi? Waitrose? What might this mean for Tesco?

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?

Actual or perceived differences: How might product differentiation be created? Actual or perceived differences:

What is the purpose of product differentiation?

Cost leadership – aim to have the 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

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