4362ch13 Sp10


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4362ch13 Sp10

  1. 1. Marketing Strategies for Services (Chap. 13)<br />Marketing strategy is the process of adjusting controllable marketing factors to cope with or exploit uncontrollable environmental forces. <br />External trends from uncontrollable forces carry great significance for service organizations.<br />
  2. 2. Competing for the Future<br />Finding unmet and unarticulated customer needs and filling them (Figure 13.1, pp. 205). Good at finding the future first.<br />“I skate to where the puck is going to be, not where it has been.” -- Wayne Gretzky<br />
  3. 3. Competing for the Future<br />Inventing the Future:<br />FedEx – overnight package delivery.<br />Ted Turner (CNN) – pace of news technology was an opportunity to create the first 24-hour television news channel.<br />Robert Earl (Hard Rock Café) – global popularity of rock music was an opportunity to create a theme-based restaurant.<br />
  4. 4. Competing for the Future<br />Four Strategic Choices<br />Today’s Business: serve existing customers with articulated (distinct) needs.<br />Unserved Opportunities: identify new customers with articulated needs; market expansion strategy. Expansion of Starbucks from US to other countries.<br />
  5. 5. Competing for the Future<br />Four Strategic Choices (cont.)<br />Unarticulated Opportunities: find new needs of existing customers; product expansion strategy. Addition of downloadable television programs to the iTunes website (http://www.apple.com/itunes/<br />Unarticulated and Unserved Opportunities: simultaneously pursue new customers with new products; diversification strategy. Gold’s Gym introduced in Russia.<br />
  6. 6. Scanning the Environment<br />Environmental scanning: process of carefully monitoring external environments for changes that pose threats or opportunities to the service organization.<br />Difference between threat and opportunity is a matter of perspective. EX: success of A&P grocery store during the Great Depression of the 1930s<br />
  7. 7. External Environment<br />Economic and Competitive: increase in globalization of service markets – global banks, hotels, restaurants, retailers, etc.<br /> Change in employment, price of gas, household income<br />
  8. 8. External Environment<br />Legal: changes, or expected changes in laws that affect service business.<br />Taxes, government regulation, health care, etc.<br />
  9. 9. External Environment<br />Social, Cultural, and Demographic: changes, or expected changes in – people’s worldviews including life, marriage, family, morality, and relationships;<br />Different age groups; dual-income families<br />
  10. 10. External Environment<br />Technology: arguably the strongest force shaping the external environment of services<br />Internet, financial transactions, medical care, communications, entertainment and recreational services<br />
  11. 11. Strategic Adjustments to Environmental Conditions (See Figure 13.3)<br />Reactive strategy: slow response to environmental changes.<br />Proactive strategy: rapid response to environmental changes.<br />Hyperactive strategy: hasty response to environmental changes. Rushing prematurely into new markets or products without proper planning.<br />
  12. 12. Strategic Adjustments to Environment<br />Defensive strategies: rapid responses used to protect the organization from environmental threats.<br />Microsoft repositioned its software products and services to be more compatible with the Internet<br />
  13. 13. Strategic Adjustments to Environment<br />Offensive strategies: rapid responses employed to capture opportunities.<br />FedEx, CNN, Hard Rock Café<br />There are several auto repair shops in a three block area. One of the shop owners decides to extend his operating hours until 10:00pm Monday-Thursday and provide a pick-up and delivery service, and guarantee all repairs for six months.<br />
  14. 14. Planning the ServicesMarketing Strategy<br />Planning the strategy – Determination of the service&apos;s objectives and manner in which they will be accomplished .<br />Identify opportunities and threats by environmental scanning; gather information from surveys, employees feedback, competitive analysis, etc.<br />Ex: Based on trends in social / cultural environment and employee feedback, UCA plans to offer child care facility on campus<br />
  15. 15. Planning the ServicesMarketing Strategy<br />Designing the strategy – Carefully specify the central marketing problem or opportunity it faces.<br />What are the different ways UCA can develop the child care center? Where should this be housed? Who would benefit from this service? Benchmarking: how did other universities develop this service?<br />What are the human resources and operations requirements?<br />
  16. 16. Planning the ServicesMarketing Strategy<br />Implementing the strategy – Developing a detailed timetable and itemized budget .<br />What are the costs of implementation? Need to check expenditures for deviations from the budget.<br />
  17. 17. Planning the ServicesMarketing Strategy<br />Controlling the strategy - Continuous assessment and modification of the success of strategies.<br />Corrective tactics may be needed such as hire more child care staff, or offer service to the general public.<br />
  18. 18. Positioning andService Segmentation<br />Positioning is how marketers attempt to create favorable customer perceptions of their product in relation to all other products. <br />Firms compete for a &quot;share of mind&quot;<br />Consider the relative positions of these organizations:<br />First Security vs. Centennial Bank<br />Southwest Airlines vs. American Airlines<br />UCA vs. UALR<br />
  19. 19. Positioning andService Segmentation<br />Market segmentation is the division of a heterogeneous market into homogeneous segments.<br />Understanding commonalities of a particular segment allows service firm to better serve the customer.<br />Selected segments become target markets for the organization’s positioning efforts.<br />
  20. 20. Marketing Mix Strategy<br />Services Marketing Approach: should reflect the market segment and position the organization seeks and manifests itself in the core product and supplementary services the organization offers; also determines the resources needed to create and deliver the service.<br />Premium hotel vs. no-frills lodging<br />
  21. 21. Service Strategies forCompetitive Advantage<br />Surpass Your Competition – The term sur/ petition was coined by Edward de Bono (1992) to describe his concept of surpassing the normal kinds of competition by surpassing competitors. <br />Dramatize Your Performance – The most effective service organizations learn to stage their performances.<br />Build Relationships – Strong customer relationships can lead to customer loyalty.<br />
  22. 22. Service Strategies forCompetitive Advantage (cont’d)<br />Harness Technology – Modern communication and transportation technologies allow service organizations to operate in multiple countries but maintain close contact with employees and customers. <br />Jazz Your Delivery – Like great jazz musicians, great service organizations are great improvisers.<br />