Overview
This lecture explains the concept of the market (or positioning) map, a tool used to visually compare how businesses position their brands using two key dimensions.
Market/Positioning Map Concept
- A positioning map visually shows where brands or businesses compete based on two chosen dimensions.
- Common dimensions include price (low to high) and quality (basic to premium), but can also be volume, necessity vs. luxury, etc.
- The map is usually two-dimensional, with each axis representing one of the selected dimensions.
Example: Health and Fitness Club Market
- Example axes: horizontal (price: low to high), vertical (range of services: narrow to broad).
- Virgin Active and David Lloyd are positioned in the high price, broad range quadrant.
- Nuffield Health offers a broad range at a lower price, compared to the premium brands.
- Bannatyne’s is mid-market with mid-range pricing and services.
- Fitness First offers a narrow range of services for a relatively high price, a less competitive position.
- Pure Gym and The Gym Group offer a narrow range at low prices and flexible contracts.
Uses and Limitations of Market Mapping
- Market maps help identify gaps in the market where consumer needs may be unmet.
- Useful for competitor analysis and understanding market opportunities, if based on accurate dimensions and reliable research.
- Limitations include reliance on subjective judgment and potentially outdated research.
- The absence of businesses in a market area does not guarantee an opportunity; there may be valid reasons for the gap.
Key Terms & Definitions
- Positioning/Market Map — A two-dimensional diagram used to compare how brands or products are positioned relative to each other on selected criteria.
- Dimension (in mapping) — An attribute (e.g., price, quality, range of services) used as an axis on the map.
- Competitor Analysis — The process of comparing businesses to identify competitive positions and market opportunities.
Action Items / Next Steps
- Try creating a market map for a market of your choice using two relevant dimensions.
- Consider researching your selected market to choose meaningful axes for analysis.