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Utsav Mahendra : Positioning Services in Competitive Markets

Positioning Services in Competitive Markets

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Utsav Mahendra : Positioning Services in Competitive Markets

  1. 1. Chapter 3Positioning Services in Competitive Markets
  2. 2. 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
  3. 3. Standing Apart from the CompetitionA business must set itself apart from itscompetition. To be successful it must identify and promoteitself as the best provider of attributes that are important to target customers GEORGE S. DAY
  4. 4. Basic Focus Strategies for Services (Fig. 3.1) BREADTH OF SERVICE OFFERINGS Narrow Wide Unfocused Service (Everything Many Focused for everyone) NUMBER OF MARKETS SERVED Fully Focused Market (Service and Focused Few market focused)Source: Robert Johnston
  5. 5. Four Principles of Positioning Strategy1. Must establish position for firm or product in minds of customers2. Position should be distinctive, providing one simple, consistent message3. Position must set firm/product apart from competitors4. Firm cannot be all things to all people--must focus Jack Trout
  6. 6. Uses of Positioning in Marketing Management (Table 3.1)• Understand relationships between products and markets – compare to competition on specific attributes – evaluate product’s 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
  7. 7. Possible Dimensions for Developing Positioning Strategies• Product attributes• Price/quality relationships• Reference to competitors (usually shortcomings)• Usage occasions• User characteristics• Product class
  8. 8. Developing a Market Positioning Strategy (Fig. 3.3) - Size Define, Analyze MARKET - Composition ANALYSIS Market Segments - Location - Trends Select Target Segments To Serve INTERNAL - Resources Marketing - Reputation Articulate ANALYSIS Desired Position Action - Constraints in Market Plan - Values Select Benefits to Emphasize to Customers - StrengthsCOMPETITIVE - Weaknesses Analyze ANALYSIS - Current Possibilities for Positioning Differentiation Source: Adapted from Michael R. Pearce
  9. 9. Positioning of Hotels in Belleville: Price vs. Service Level (Fig. 3.4) Expensive Grand Regency PALACE Shangri-La High Moderate Service Atlantic Service Sheraton Italia Castle Alexander IV Airport Plaza Less Expensive
  10. 10. Positioning of Hotels in Belleville: Location vs. Physical Luxury (Fig. 3.5) High Luxury Regency Grand Shangri-La Sheraton PALACEFinancial Shopping District Inner District and Convention Centre Suburbs Castle Italia Alexander IV Atlantic Airport Plaza Moderate Luxury
  11. 11. Positioning after New Hotel Construction: Price vs. Service Level (Fig. 3.6) Expensive MandarinNew Grand Heritage Marriott Continental Action? Regency PALACE Shangri-La High No action? ModerateService Service Atlantic Sheraton Italia Castle Alexander IV Less Expensive Airport Plaza
  12. 12. Positioning after New HotelConstruction: Location vs. Physical Luxury (Fig. 3.7) High Luxury Mandarin New Grand Continental Heritage Marriott Regency Sheraton Shangri-La Action? PALACEFinancial No action? Shopping District Inner District and Convention Centre Suburbs Castle Italia Alexander IV Atlantic Airport Plaza Moderate Luxury
  13. 13. 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

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