Market positioning

- Concerned with the perception consumers have about products.

- Consumers place products into categories that define their 'position' in relation to those of competititors so businesses use different approaches to shape consumer perceptions and achieve their desired position:

• Benefits offered by the product: quality, safety...
• Unique selling point
• Characteritics/ qualities offered by the product
• Origin of the product
• The classification name of the product

- As markets change in response to shifting consumer demand, some businesses find they need to reposition their products meaning they have to change their target market, features of the product or the image of the product.

- Positioning of a brand and sales of a product is influenced by customer perceptions so, if a business wants to find out where its brand is positioned, it might carry out market research.

- A business which wishes to launch a new brand might also find it helpful to find out which characteristics it should have. E.g. price.

- Results of market research can be displayed on market or perceptual maps but these have their limitations:

- Only two product qualities can be analysed at a time.

- Not relevant for corporate brands.

- Information required to plot the maps can be expensive to obtain: primary research needed.

- Used by businesses to gain a competitive edge over their rivals in highly competitive markets by producing goods with different qualities so that they stand out.

- Sometimes the differences are perceived by customers based of their view of the product but there is no real difference. 

- Its purposes are:

• Flexible pricing: if business seen as superior they can charge higher prices.
• Recognition: consumers usually find products more appealing if they stans out from the pack.
• Extend product range: if businesses can differentiate its products they may be able to serve more than one market segment.
• Brand development: a business which can differentiate its products for a long time can develop a strong brand.
• Overcome competition: by creating differences a business can attract new customers, win larger market share and with an increase in sales it might be able to lower costs and raise profits.

- Providing 'extra' features for the customer that go beyond their standard expectations to add value to the products.

• Bundling: putting together a 'package' of benefits or services that make up the whole product.
• Customer service: friendly and proffesional staff with a good knowledge of the product will make customers comfortable.
• Speed of respone: reducing waiting times or eliminating completely.
• Packaging: presenting products in attractive wrappings.
• Frequent buyer offers: rewarding customers for repeated purchases.
• Customisation

BENEFITS:

- Possibility to charge higher prices

- Product differentiation and gaining a competitive edge

- Business focus more closely on its target market segment