What does "market positioning" refer to in business strategy?

Market positioning in business strategy refers to the process of establishing a brand or product's image relative to competitors in the marketplace. This involves defining how a product is perceived by customers in comparison to similar offerings from other companies. The goal is to create a unique identity in the minds of consumers that distinguishes the product or brand from its competitors.

Effective market positioning helps consumers understand what makes a product valuable and aligns the product’s features and benefits with consumer needs and preferences. This strategy is crucial in a competitive market because it influences customer perceptions and can drive their purchasing decisions, thus enhancing brand loyalty.

In contrast, the other options focus on different aspects of business strategy. Determining the selling price is more about pricing strategy and does not specifically involve brand perception relative to competitors. Targeting specific customer demographics relates to market segmentation, which is about dividing potential customers into groups, not necessarily positioning the brand. Creating new products to fill market gaps speaks to innovation or product development rather than how a product is positioned among existing market players. Therefore, option B accurately captures the essence of market positioning in business strategy.