Positioning Services in

Competitive Markets

Search for Competitive Advantage in Services Requires Differentiation and Focus

Intensifying competition in service sector threatens

firms with no distinctive competence and undifferentiated offerings Slowing market growth in mature service industries means that only way for a firm to grow is to take share from competitors Rather than attempting to compete in an entire market, firm must focus efforts on those customers it can serve best Must decide how many service offerings with what distinctive (and desired) characteristics

Basic Focus Strategies for Services

BREADTH OF SERVICE OFFERINGS

Narrow
Service Focused

Wide
Unfocused (Everything for everyone)

Many
NUMBER OF MARKETS SERVED

Few

Fully Focused (Service and market focused)

Market Focused

Source: Robert Johnston

Four Principles of Positioning Strategy

1. Must establish position for firm or product in minds of customers 2. Position should be distinctive, providing one simple, consistent message 3. Position must set firm/product apart from competitors 4. Firm cannot be all things to all people--must focus

Uses of Positioning in Marketing Management

Understand relationships between products and

markets

compare to competition on specific attributes evaluate products ability to meet consumer

needs/expectations predict demand at specific prices/performance levels

Identify market opportunities
introduce new products redesign existing products eliminate non-performing products

Make marketing mix decisions, respond to

competition

distribution/service delivery pricing communication

Possible Dimensions for Developing Positioning Strategies

Product attributes

Price/quality relationships
Reference to competitors (usually shortcomings) Usage occasions

User characteristics
Product class

Service attributes and levels

The purpose for using the service

Who makes decision

The timing(time of day/week/season) Whether the individual is using the service alone

or with a group The competition of that group Eg-Hotel

 Important Vs Determinant Attributes

Establishing Service Levels and Tiers

Industry
Airlines

Tiers
Classes

Key service Attributes

Seat Pitch,Width,meal,be verage service, check-in speed ,baggage Architecture, landscaping, room size, decor,

Lodging

Star or diamond

Developing a Market Positioning Strategy

MARKET ANALYSIS
- Size - Composition - Location - Trends Define, Analyze Market Segments

Select Target Segments To Serve

INTERNAL ANALYSIS

- Resources - Reputation - Constraints - Values

Articulate Desired Position in Market Select Benefits to Emphasize to Customers

Marketing Action Plan

COMPETITIVE ANALYSIS

- Strengths - Weaknesses - Current Positioning

Analyze Possibilities for Differentiation

Source: Adapted from Michael R. Pearce

Positioning of Hotels in Belleville: Price vs. Service Level

Expensive

Grand

Regency

PALACE

Shangri-La
High Service Sheraton Atlantic Moderate Service

Italia Castle Less Expensive

Positioning of Hotels in Belleville: Location vs. Physical Luxury

High Luxury

Grand Sheraton PALACE

Financial District Shopping District and Convention Centre

Regency

Shangri-La

Inner Suburbs

Castle Atlantic

Italia

Alexander IV

Airport Plaza Moderate Luxury

Positioning after New Hotel Construction: Price vs. Service Level

Mandarin New Grand Heritage Marriott Continental Expensive

Action? Regency High Service

PALACE
Shangri-La No action? Atlantic Sheraton Italia Castle Alexander IV Airport Plaza Moderate Service

Less Expensive

Positioning after New Hotel Construction: Location vs. Physical Luxury (Fig. 3.7)
High Luxury Mandarin

New Grand
Continental Action? PALACE Financial District No action? Shopping District and Convention Centre Italia Alexander IV Atlantic Airport Plaza Inner Suburbs Heritage Marriott Sheraton Shangri-La Regency

Castle

Moderate Luxury

Positioning Maps Help Managers to Visualize Strategy

Positioning maps display relative performance of competing firms

on key attributes
Research provides inputs to development of positioning maps
Challenge is to ensure that attributes employed in maps are important to target segments performance of individual firms on each attribute accurately

reflects perceptions of customers in target segments

Predictions can be made of how positions may change in the

light of new developments in the future

Simple graphic representations are often easier for managers to

grasp than tables of data or paragraphs of prose

Charts and maps can facilitate a visual awakening to threats

and opportunities and suggest alternative strategic directions