1. 113 Market Positioning AS Edexcel 2015 Business Theme 1 – Marketing and people Ms Haron

3. From the specification
Market mapping
Competitive advantage of a product or service
The purpose of product differentiation
Adding value to products/services

4. Lesson Objectives
To be able to identify how market mapping might be used by a business
To be able to describe how a business could gain competitive advantage
To be able to discuss the purpose of product differentiation
To be able to identify ways that a business can add value to products or services
To be able to answer exam questions based on the topic area

5. Starter
The Mars bar was manufactured in Imagine you were Frank Mars and in teams come up with as many new product ideas for Mars as you can in 3 minutes:
This is not as easy as it sounds, but they may come up with cake bars, ice cream, drinks etc Some ideas on next slide

6. How did Mars spot a gap in the market?

7. From the specification
Market mapping
Competitive advantage of a product or service
The purpose of product differentiation
Adding value to products/services

8. 1. Market mapping
A grid that measures two different aspects of the brands within the market (e.g. young/old compared with luxury/economy)
In order to identify a gap in the market, it may be useful for a business to construct a diagram of where competitors are on two axis (for example price and quality):
Jimmy Choo
Premium Price
Nike
Clarks
Primark
Luxury (a treat)
Functional
Budget Price
Ugg

9. Market Map
High Price
Low
Quality
High Quality
Low Price

10. Create a market map (5 mins)
Create a market map for these clothes shops (add others that you know)
George Dorothy Perkins
Peacocks Chanel
Sports Direct Marks & Spencer
Lipsy Next
Topshop Matalan
Primark Debenhams

11. Market Map: Clothing retail UK
High Price
Dior
Next
Low
Quality
Top Shop
High Quality
Matalan
George
Peacocks
Sports Direct
These are just suggestions
Primark
Low Price

12. From the specification
Market mapping
Competitive advantage of a product or service
The purpose of product differentiation
Adding value to products/services

13. 2. Competitive advantage
An advantage a business has over its competitors, allowing it to generate larger than average turnover for the industry
A way that the business can makes its products or services appear superior to the competition to the target market.
Competitive advantage is achieved by using resources to achieve either:
Cost advantage (Porter) – a business has skilled worked force and efficient operations to provide low cost value to consumers e.g. ASDA, Nissan, Nike, Ryanair
Differentiation advantage (Porter) resources are used by a business to create superior value for the consumer
Porter link is to Website with printable CA information if you want to do this in more detail. The Ryanair link is to an article about Ryanair removing toilets to save on costs.

14. From the specification
Market mapping
Competitive advantage of a product or service
The purpose of product differentiation
Adding value to products/services

15. 3. Product differentiation
Where a business tries to make its product different from the competition in some way
Consumers must be able to perceive this difference and may be willing to pay a premium price for the product.
Bugatti veyron – website here which outlines its features, including 1200 bhp (average car is about 104)
Article of cost of a Veyron here

16. Methods of differentiation
Through reputation (hair salon, restaurant)
Through customer service or after sales service (Marks and Spencer)
Through value for money (ASDA, Lidl, Aldi)
Through product features (Cars, mobile phones)
Link is to trip advisor – what is best restaurant in town> Then put town in and see what Trip advisor suggests. Would customers go based on a resturant being high on the list – probably.

17. From the specification
Market mapping
Competitive advantage of a product or service
The purpose of product differentiation
Adding value to products/services

18. 4. Adding value
Value added is when a business chooses to enhance the quality of a core product by providing extras to improve a customer’s utility/experience
Design – develop new technology/design features to make their product unique (differentiation advantage)
Production – achieving quality and efficiency adds value.
Quality will ensure a higher price can be charged (differentiation advantage)
Efficiency helps cut costs of the input (cost advantage)
Marketing – creating an image that makes the product more desirable, a brand differentiation advantage)

19. Adding value
How can you add value to a potato?

20. Adding value
Production processes add cost at each area but also add value to the raw material:
Cost of a potato is pence but a tube of pringles can cost £1 - £2

21. Benefits of adding value
Added Value: Sectors of Industry
Charge a higher price – increase profit
Protection against competitors offering lower prices
Customer loyalty
Radley have added value to leather, these bags cost £300
Input for handbags
Mr Mercer's notes 21

22. Value is added by: Raw materials
Process e.g. cooking, slicing, canning
Additional ingredients e.g. cake mix
Convenience e.g. In supermarket
Packaging e.g. Handy cake slice in plastic
Raw materials
Finished goods

23. Homework Be more No new HW today
Homework set last Thurs is due this Thursday
Visit this link to further your knowledge on competitive advantage
(this ppt will be on warrenbusiness.weebly.com so you don’t need to copy the link down from this slide)
Be more

24. Revision Video

25. Glossary
Market mapping: Market mapping is about positioning the products/service a business plans to provide
Competitive advantage: An advantage a business has over its competitors, allowing it to generate larger than average turnover for the industry
Product differentiation: How a business differentiates its products; through reputation, service, features or value
Added value: value added is when a business chooses to enhance the quality of a core product by providing extras to improve a customer’s utility/experience