113 Market Positioning
AS Edexcel 2015 Business
Theme 1 – Marketing and people
Ms Haron
From the specification
1. Market mapping
2. Competitive advantage of a product or
service
3. The purpose of product differentiation
4. Adding value to products/services
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
Starter
• The Mars bar was manufactured in 1932.
Imagine you were Frank Mars and in teams
come up with as many new product ideas for
Mars as you can in 3 minutes:
From the specification
1. Market mapping
2. Competitive advantage of a product or
service
3. The purpose of product differentiation
4. Adding value to products/services
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):
Premium
Price
•Jimmy Choo
•Ugg
•Nike
Functional
Luxury (a
treat)
•Clarks
Budget
Price
•Primark
Market Map
High
Price
Low
High
Quality
Quality
Low Price
Create a market map (5 mins)
• Create a market map for these clothes shops
(add others that you know)
George
Peacocks
Sports Direct
Lipsy
Topshop
Primark
Dorothy Perkins
Chanel
Marks & Spencer
Next
Matalan
Debenhams
Market Map: Clothing retail UK
High
Price
Dior
Top Shop
Low
Quality
Matalan
George
Peacocks
Sports Direct
Primark
Low Price
Next
High
Quality
From the specification
1. Market mapping
2. Competitive advantage of a product or
service
3. The purpose of product differentiation
4. Adding value to products/services
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:
1. 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
2. Differentiation advantage (Porter) resources are used by
a business to create superior value for the consumer
From the specification
1. Market mapping
2. Competitive advantage of a product or
service
3. The purpose of product differentiation
4. Adding value to products/services
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
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)
From the specification
1. Market mapping
2. Competitive advantage of a product or
service
3. The purpose of product differentiation
4. Adding value to products/services
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)
Adding value
• How can you add value to a potato?
Adding value
• Production processes add cost at each area
but also add value to the raw material:
Benefits of adding value
1. Charge a higher price – increase
profit
2. Protection against competitors
offering lower prices
3. Customer loyalty
Input for handbags
Radley have added
value to leather, these
bags cost £300
Value is added by:
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
Finished
goods
Homework
• No new HW today
• Homework set last Thurs is due this Thursday
Be more
• Visit this link to further your knowledge on
competitive advantage
http://www.quickmba.com/strategy/competitiveadvantage/
(this ppt will be on warrenbusiness.weebly.com so
you don’t need to copy the link down from this slide)
Revision Video
Glossary
1. Market mapping: Market mapping is about positioning
the products/service a business plans to provide
2. Competitive advantage: An advantage a business
has over its competitors, allowing it to generate larger than
average turnover for the industry
3. Product differentiation: How a business
differentiates its products; through reputation, service,
features or value
4. 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