What a market map is: two axes and one dot for every rival

1. A market map is a grid: one feature runs left to right along the horizontal axis, a second runs bottom to top along the vertical axis, and a line drawn through the middle of each splits the grid into four quarters.
2. Each axis needs an opposite at either end, so that any product can be placed somewhere between them.
   1. Price: low price at the left-hand end of the horizontal axis, high price at the right-hand end.
   2. Quality: basic at the bottom of the vertical axis, premium at the top.
   3. Any other pair customers care about: traditional against modern, plain against heavily branded, or narrow range against wide range.
3. You then mark each competing product as a labelled dot, placed by where customers think it sits on those two features, not by where the owner would like it to sit.

Reading the map: clusters show competition, empty space suggests a gap

1. A cluster, meaning several dots bunched close together, marks the part of the market where competition is fiercest.
2. Launching into a cluster means taking customers away from rivals those customers already know, which usually forces a lower price or heavier spending on promotion, so the profit on each sale is squeezed.
3. An empty space is a possible gap in the market, because no product on the grid currently offers that combination of the two features.
4. A business that moves into an empty space has no direct rival beside it, so it can set its own price rather than match one, and it becomes the obvious choice for anyone who wants that combination.

What a business does with the map

1. The finished map supports three decisions.
   1. Position a new product: aim the price, packaging and promotion at an empty space, so the product is different from the day it launches rather than a copy of something already selling.
   2. Identify who the real rivals are: the nearest dots are the firms competing for the same customers, which is often a shorter list than every business in the industry.
   3. Check its own dot: a business sitting on top of a larger competitor is fighting a firm with a better-known name and deeper pockets, so it may reposition to a quieter part of the grid.
2. PureGym sits at low monthly membership with 24-hour access and no staffed reception, which keeps it clear of gyms selling on service and facilities, so it wins members on price instead of competing on something rivals already do better.

Limits of the map: an empty space is a question, not an answer

1. A space may be empty because nobody wants that combination, which is why high price with basic quality is bare on almost every map ever drawn.
2. The grid shows only the two features you chose, so a product that wins on service, delivery speed or brand image can look identical to a rival on your axes while feeling completely different to a shopper.
3. Where you plot a rival is partly opinion, because words such as premium have no measurement, so two people mapping the same market can produce two different maps.
4. The map carries no numbers, so a gap has to be tested with market research before any money is spent, because the grid cannot tell you how many customers sit in that space or what they would pay.