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Positioning a product correctly on the market is essential for all businesses. But how can businesses know exactly where their product stands in comparison to competitors' products? One way of finding this out is through market research. A useful tool for conducting this analysis is a market map.
First, let's take a look at what positioning is, and how we map it.
A positioning map is a visual representation of market positioning. It represents a range of positions a product has or could have in the market.
The positioning map is represented on a scatter plot diagram, and it maps the positioning of competitors in relation to the brand. The market is mapped based on two dimensions (for example, price and quality). A positioning map is useful for spotting gaps in the market and understanding where your competitors have positioned themselves in the market. It is also useful for planning purposes - to figure out where you would ideally want your product or brand to stand in relation to competitors.
A positioning map is not the same as a perceptual map. A perceptual map shows how consumers view your product, whereas a positioning map is not based on consumer perceptions. Positioning maps show where existing products and services are positioned in the market.
A positioning map is useful for understanding competition in a given market. It is, however, important to understand that different types of competitors can compete with your product, even if these competitors position themselves differently on the market.
A company that positions itself in the low-price segment could spot a gap in the market, and in the future create a new brand targeting the high-price and high-quality segment.
This is why positioning maps are important for examining current competition and positioning and identifying gaps in the market.
There are a couple of reasons why a business would use a positioning map:
To analyse competition and competitors' positioning.
As a tool that helps market researchers.
To understand the product positioning aspect of the market mix.
As a tool to help create an effective marketing strategy for new products.
To adjust existing strategies for their current product/brand offering.
Some of the disadvantages of a positioning map are:
You will most likely have to conduct further research to come up with effective strategies.
Just because you have identified a gap in the market does not mean that the product will be successful.
The scale or dimensions that you have used might not be the most effective one for the market or industry you are trying to examine.
Market mapping, also known as perceptual mapping, is a technique that businesses and market researchers use to understand how customers view a certain product or brand.
A perceptual allows managers to understand which brands are their closest competitors and which attributes of their product or brand play the biggest role in differentiating them from competitors. A perceptual map is based on customer perception rather than market and industry data.
To create a perceptual map you need to ask consumers to identify and evaluate important attributes of brands and products. This can be done through surveys, questionnaires, and interviews. From this information, you select the most important attributes. These attributes will make up the two dimensions of your scale. Based on this information you can plot all the different brands or products and identify which areas of the diagram are heavily competitive. You can also observe how close the competitors are to your brand.
Some of the advantages of perceptual mapping:
Provides a visual representation of information.
Clear and easy to interpret when you need to make a quick decision.
Based on quantitative data.
Helps you understand market segments.
Useful for market researchers.
Helps evaluate the performance of marketing campaigns.
Illustrates changes in customer preferences.
Tracks how new product developments are performing in the market.
Some of the limitations of perceptual mapping include:
It represents a very simplistic version of consumer decision making.
It is often time-consuming and expensive to collect this type of data.
There can be differences between the customer's perception of a product and the actual qualities of the product.
Chocolate brands market map (Price-Quality). StudySmarter
The figure above represents a market map for different chocolate brands. You can see that the two dimensions being used to represent the positioning of each brand are price and quality. Ferrero Rocher is placed as the chocolate brand that offers the highest quality product for the highest price (top right quadrant). The Cadbury Chomp bar is placed as the lowest price, lowest quality product (bottom left quadrant). Further, we see that Milky Way and Curly Wurly are competing closely in the low-price and low-quality segment. It also shows a potential gap in the market, in the lower-priced, high-quality segment. This could potentially be an effective way to position your new product - targeting the low-price, high-quality segment.
On the other hand, the same chocolate brand could also be plotted on a market map based on two different dimensions. For example, if the two dimensions being used were 'crunchy' and 'dense', the chocolate brands would be positioned differently, resulting in a completely new market map.
To create a positioning map you need to first decide which product or brand your business would like to compare to its competitors. You then need to decide which dimensions you are going to use for your diagram. For example, you could decide to use price and quality. A positioning map always has to feature two different dimensions. You then have to plot your brand and competitors' brands on the scatter plot diagram; this will become your positioning map. From the positioning map, you can see how your competitors have positioned their brands in relation to your brand.
Market mapping involves creating a visual representation of market positioning. The market map represents the position of a business's product in relation to competitors' product offerings. When you are mapping the market, you are essentially creating a diagram that rates different products that are being sold in the same industry, based on two separate dimensions. The final version of the diagram is known as the market map.
A market map is a visual representation of market positioning. It represents a range of positions a product has or could have in the market. The positioning map is represented on a scatter plot diagram and it maps the positioning of competitors in relation to the brand. The market is mapped based on two dimensions (for example, price and quality). Market mapping is useful for businesses that want to understand their competitive position.
A perceptual map is a visual representation of how customers view a business' product or brand. It allows managers to understand which brands are their closest competitors and which attributes of their product or brand play the biggest role in differentiating them from competitors. A perceptual map is based on customer perceptions of a business' brand rather than market and industry data. To create a perceptual map you need to ask consumers to identify and evaluate important attributes of brands and products. This can be done through surveys, questionnaires, and interviews.
Businesses use market mapping to understand their competitive environment. Market mapping shows how competitors position their products or brands in relation to a business' product or brand. Market mapping can be useful for identifying gaps in the market which is an important part of market research that precedes new product positioning strategies. Market mapping can also help businesses with their marketing strategy, as it is directly linked to the 'product' aspect of the marketing mix.
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