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8/7/2019 Differentiation Among Services
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DIFFERENTIATION
AMONG SERVICES
PRESENTED BY:
GROUP 2
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Service (Product) differentiation is a business
level strategy intended to:
increase the perceived value of firms products
(or services) compared
to competitors products (or services).
create a customer preference for firms products
/ services.
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EVOLUTION OF
DIFFERENTIATED MARKETING undifferentiated marketing: the organization
has only one product and it aimed the product at
the whole market
Differentiated Marketing: the organization
introduced variation in the product models.
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Five Dimensions of Differentiation
Product
Services that accompany marketing, sales and
after sales services.
Personnel that interact with the customer
Channel.
Image.
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Features of Differentiation
Quality Performance
Conformance
Durability Reliability
Reparability
Style
Design
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Features of Service Differentiation
Ordering ease
Delivery
Installation
Customer training
Customer consulting
Miscellaneous services
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Boston Consulting Group's
differentiation opportunities matrix: Four types of industries identified by BCG matrix
are:
Volume industry
Stalemated industry
Fragmented industry
Specialized industry
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Image
Safety
Furthering a cause
Reliability in use
Nostalgia
Belonging
Cleanliness Quality
Service
Accuracy
Bases of Differentiation
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VRIO Criteria
Value
Rarity
Imitability
Organize
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Steps in Differentiation
First step :determine who the real buyer is
Second step :identify the direct and indirectimpact on its buyers value chain
Third step: rank the buyers purchasing criteria
Fourth step :identify the existing sources of
uniqueness
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Fifth step :study the cost implications
Sixth step: choose the configuration of value
activities
Seventh step :check the sustainability factor
Last step :cost reduction in the activities
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LITERATURE REVIEW
Philip Kotleridentified three major tasks for a servicemarketer, one of them -competitive differentiation
Because of the intangible nature of services, it is difficultto differentiate service offer from competitors
Most innovations of service industries are capable ofbeing copied
A firm needs to differentiate its offer from that ofcompetitors by providing something unique that isvaluable to the buyer
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Michael Porter,in his works, has said that it is
rather difficult to understand competitiveadvantage by looking a firm as a whole.
He argued that a firms strength ultimately fall
into one of two headings, cost advantage and
differentiation
He said that differentiation grows out of the firmsvalue chain
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INDUSTRIAL IMPLICATIONINDUSTRIAL IMPLICATION
SERVICE DIFFERENTIATION IN TELECOM
INDUSTRY
AIRTEL
Airtel attempts to achieve a competitive advantage by
creating a service that is perceived as unique
Airtel is more focused on the elite people. Airtel offers the facility to take or renew car insurance
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electricity bill payment;
mobile to mobile top up,
fund transfer payment transfer,
payment and purchase of airline as well as train
reservation ticket
better network coverage
network reliability,
charging customers for only what they use, instead of
features like free phone calls.
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Airtel offers the most expansive roaming network.
a customer-focused differentiation strategy when
implemented with a clear vision benefits the company in
many ways including price premium, brand loyalty and
sometimes often reduced prices.
In order to effectively maintain a differentiation strategy,
the firm have a very strong skills in R&D, product
engineering, change management, marketing,
advertising, and HRM
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The key factors that indicate service quality in
telecom sectors
- System coverage
- Call blockage
- Voice quality
- Dropped call rate
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CONCLUSIONCONCLUSION
Service differentiation creates customer preferences.
Preferences allow firms to make above normal profits.
Almost anything can be a base of differentiation.
Bases of service differentiation that meet the VRIOcriteria may generate competitive advantage.
A service differentiation strategy is only as good as itsimplementation.
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THANK YOU!