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8/8/2019 Lecture 07 Lovelock
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Chapter 3
Positioning Services inCompetitive Markets
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Search for Competitive Advantage in ServicesRequires Differentiation and Focus
Intensifying competition in service sector threatens firmswith no distinctive competence and undifferentiatedofferings
Slowing market growth in mature service industries meansthat only way for a firm to grow is to take share fromcompetitors
Rather than attempting to compete in an entire market, firmmust focus efforts on those customers it can serve best
Must decide how many service offerings with whatdistinctive (and desired) characteristics
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Standing Apart from the Competition
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 areimportant to target customers
GEORGE S. DAY
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Basic Focus Strategies for Services (Fig. 3.1)
BREADTH OF SERVICE OFFERINGS
NUMBEROF MARKETSSERVED
Narrow
Many
Few
Wide
ServiceFocused
Unfocused(Everything
for everyone)
MarketFocused
Fully Focused(Service andmarket focused)
Source: Robert Johnston
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Four Principles of Positioning Strategy
1. Must establish position for firm or product in minds ofcustomers
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
Jack Trout
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Uses of Positioning inMarketing Management (Table 3.1)
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
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Possible Dimensions for DevelopingPositioning Strategies
Product attributes
Price/quality relationships
Reference to competitors (usually shortcomings)
Usage occasions
User characteristics
Product class
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Developing aMarket Positioning Strategy (Fig. 3.3)
- Size
- Composition
- Location
- Trends
Marketing
Action
Plan
MARKET
ANALYSIS
INTERNAL
ANALYSIS
- Resources
- Reputation
- Constraints
- Values
COMPETITIVE
ANALYSIS
- Strengths
- Weaknesses
- Current
Positioning
Define, Analyze
Market Segments
Select
Target Segments
To Serve
Articulate
Desired Position
in Market
Select Benefits
to Emphasizeto Customers
Analyze
Possibilities for
Differentiation
Source: Adapted from Michael R. Pearce
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Positioning of Hotels in Belleville:Price vs. Service Level (Fig. 3.4)
Expensive
Shangri-LaHigh
ServiceModerateService
Grand
Regency
Sheraton
Italia
CastleAlexander IV
Airport Plaza
PALACE
Atlantic
Less Expensive
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Positioning of Hotels in Belleville:Location vs. Physical Luxury (Fig. 3.5)
High Luxury
Shopping District
and Convention Centre
Shangri-La
Moderate Luxury
Financial
District
Inner
Suburbs
GrandRegency
Sheraton
ItaliaCastle
Alexander IV
Airport Plaza
PALACE
Atlantic
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Positioning after New Hotel Construction:Price vs. Service Level (Fig. 3.6)
Expensive
Shangri-LaHigh
ServiceModerateService
HeritageMandarin
New Grand
MarriottContinental
Regency
SheratonItalia
Alexander IV
Airport Plaza
PALACE
Atlantic
No action?
Action?
Less Expensive
Castle
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Positioning after New Hotel Construction:Location vs. Physical Luxury (Fig. 3.7)
High Luxury
Shangri-La
FinancialDistrict
InnerSuburbs
Heritage
Mandarin
New Grand
MarriottContinental
RegencySheraton
ItaliaAlexander IV
Airport Plaza
PALACE
Atlantic
No action?
Action?
Moderate Luxury
Castle
Shopping Districtand Convention Centre
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Positioning Maps Help Managers toVisualize Strategy
Positioning maps display relative performance of competingfirms on key attributes
Research provides inputs to development of positioning maps
Challenge is to ensure that
attributes employed in maps are important to target segmentsperformance of individual firms on each attribute accurately
reflects perceptions of customers in target segments
Predictions can be made of how positions may change in thelight of new developments in the future
Simple graphic representations are often easier for managers tograsp than tables of data or paragraphs of prose
Charts and maps can facilitate a visual awakening to threatsand opportunities and suggest alternative strategic directions
Recommended