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MKW3301 Services Marketing: Lecture 2b Positioning Services

1. Positioning involves differentiating services from competitors by emphasizing attributes that are valued by target customers. It creates awareness and desire among customers. 2. There are different positioning strategies such as fully focused, market focused, and unfocused strategies that involve varying degrees of specialization in markets and services. 3. Developing the right service concept involves understanding which attributes are important and determinant for customers in different segments. Positioning maps can analyze competitive positioning and advantages based on attributes like service level and price.

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43 views

MKW3301 Services Marketing: Lecture 2b Positioning Services

1. Positioning involves differentiating services from competitors by emphasizing attributes that are valued by target customers. It creates awareness and desire among customers. 2. There are different positioning strategies such as fully focused, market focused, and unfocused strategies that involve varying degrees of specialization in markets and services. 3. Developing the right service concept involves understanding which attributes are important and determinant for customers in different segments. Positioning maps can analyze competitive positioning and advantages based on attributes like service level and price.

Uploaded by

Syed Lubaab Rahman
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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MKW3301

Services Marketing

Lecture 2b
Positioning Services
Focus underlies the search for
competitive advantage
• Intensifying competition makes it important to differentiate
products
• In mature markets, only way to grow may be to take a share
from competitors
• Brand positioning helps create awareness, generate interest
and desire among potential customers and increase adoption
of service products
• Emphasize competitive advantage on those attributes that will
be valued by customers in target segment(s)
What is positioning?

• Standing apart from competitors


• Creating, communicating, and maintaining distinctive differences
that will be noticed and valued by those customers with whom the
firm would most like to develop a long-term relationship
• “A business must set itself apart from its competition. To be
successful it must identify and promote itself as the best provider of
attributes that are important to target customers.” George S. Day
What is positioning?
• Standing apart from competitors
• Creating, communicating, and maintaining distinctive differences that will be
noticed and valued by those customers with whom the firm would most like to
develop a long-term relationship
• “A business must set itself apart from its competition. To be successful it must
identify and promote itself as the best provider of attributes that are important to
target customers.” George S. Day
• Managers need to think systematically about all facets of the service offerings and
emphasize competitive advantage on those attributes that will be valued by
customers in their target segment(s)
Fully focused strategy
Limited range of services to a narrow and specific market

• Opportunities • Risks
• Developing recognized • Market is too small to generate
expertise in a well- needed volume
defined niche may
• Demand may be displaced by
provide protection
generic competition from
against would-be
alternative products
competitors
• Purchasers in chosen segment
• Allows firms to charge
may be susceptible to economic
premium prices
downturn
Market focused strategy
• Narrow market segment with a wide range of services
• Need to make sure firms have operational capability to do and
deliver each of the difference services selected.
• Need to understand customer purchasing practices and preferences
• E.g. Rentokil

• Service focussed strategy


Narrow range of services to a fairly broad market
• As new segments are added, firms needs to develop knowledge and
skills in serving each segment.
• E.g. Lasik eye surgery
Unfocused strategy
• Broad market with wide range of services

• Everything for everyone

• Many service providers fall into this category

• Danger – becoming a ‘jack of all trades and master of none’


Developing the right service concept for a
specific segment

• Once a target market is selected, firms need to provide their


market with the right service concept
• Use research to identify and prioritize which attributes of a given
service are important to specific market segments
• Individuals may set different priorities according to:
• Purpose of using the service
• Who makes decision
• Timing of use
• Whether service is used alone or with a group
• Composition of that group
Important versus determinant attributes
• Customers usually choose between alternative service
offerings based on perceived differences between them

• Attributes that distinguish competing services from one


another are not necessarily the most important ones

• Determinant attributes determine buyers’ choices between


competing alternatives
• Service characteristics that are important to purchasers
• Customers see significant differences between competing
alternatives on these attributes
Establishing service levels
• Make decisions of service levels – level of performance firm plans to
offer on each attribute
• Easily quantified attributes are easier to understand – e.g., vehicle speed,
price, on time arrival
• Qualitative attributes subject to individual interpretation – e.g., physical
comfort, noise levels

• Can often segment customers according to willingness to trade off


price versus service level:
 Price insensitive customers willing to pay relatively high price for high levels
of service
 Price-sensitive customers look for inexpensive service with relatively low
performance
Principles of positioning strategy
• Competitive positioning strategy is based on establishing and
maintaining a distinctive place in the market for an
organisation/ or its individual product offerings

• Remember the four principles of positioning strategies:


• Must establish position for firm or product in minds of customers
• Position should be distinctive, providing one simple, consistent
message
• Position must set firm/product apart from competitors
• A company cannot be all things to all people – must focus its efforts
Developing an effective positioning strategy

• Positioning involves decisions on attributes important to


customers
• Positioning strategy can take place at several different levels,
depending on the nature of the business in question.
• Given the intangible and experiential nature of services, an
explicit positioning strategy is valuable to help prospective
customers to get a ‘mental fix’ on what to expect
Four elements of a good positioning strategy
• Target audience
• Who do you want to serve?

• Frame of reference
• What category are you in?

• Point of difference
• What is your most compelling benefit that others don’t have?

• Reason to believe
• What is your proof?
Using positioning maps to analyse
competitive strategy
• Great tool to visualize competitive positioning and map
developments of time
• Useful way to represent consumer perceptions of alternative
products graphically
• Typically confined to two attributes, but 3-D models can be
used to portray positions on three attributes simultaneously
• Information about a product can be obtained from market
data, derived from ratings by representative consumers, or
both
Using positioning maps to analyse
competitive advantage
Positioning of Belleville Hotels: Service level vs. price ( Fig. 3.14)
Using positioning maps to analyse
competitive advantage
• When plotting positioning maps, what determines the axes for services?

Determinant attributes determine buyers’ choices between competing


alternatives

• Service characteristics that are important to purchasers

• Customers see significant differences between competing alternatives on these


attributes
Or

Customers costs = the bundle of costs customers expect to incur in evaluating,


obtaining, using and disposing of the offering (monetary, time, energy, mental)
Service repositioning
• Firms may have to make significant change in existing
position
• Revising service characteristics; redefining target market segments;
abandoning certain products; withdrawing from certain market segments

• Improving negative brand perceptions may require extensive


redesign of core product

• Repositioning introduces new dimensions into positioning


equation that other firms cannot immediately match
Lecture summary
• The importance of focus
• Service positioning strategies
• Positioning and repositioning maps

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