Positioning Services

8/11/2019 Positioning Services

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Slide 2004 by Christopher Lovelock and Jochen Wirtz Services Marketing 5/E 3 - 1

Ch apter 3

Positioning Services inCompeti tive M arkets


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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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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 and

market focused)

Source : Rober t Johns to n


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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 focusJack Trout


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Uses of Positioning inMarketing Management (Table 3.1)

Understand relationships between products and marketscompare to competition on specific attributesevaluate products ability to meet consumer needs/expectations predict demand at specific prices/performance levels

Identify market opportunitiesintroduce new productsredesign existing productseliminate non-performing products

Make marketing mix decisions, respond to competitiondistribution/service deliverypricingcommunication


7/13Slide 2004 by Christopher Lovelock and Jochen Wirtz Services Marketing 5/E 3 - 7

Possible Dimensions for DevelopingPositioning Strategies

Product attributes

Price/quality relationships

Reference to competitors (usually shortcomings)

Usage occasions

User characteristics

Product class



Developing aMarket Positioning Strategy (Fig. 3.3)

- Size- Composition- Location- Trends

MarketingAction

Plan

MARKETANALYSIS

INTERNALANALYSIS

- Resources- Reputation- Constraints- Values

COMPETITIVEANALYSIS

- Strengths- Weaknesses- Current

Positioning

Define, AnalyzeMarket Segments

SelectTarget Segments

To Serve

ArticulateDesired Position

in Market

Select Benefits

to Emphasizeto Customers

AnalyzePossibilities forDifferentiation

Source: Ad apted from Michael R. Pearce



Positioning of Hotels in Belleville:Price vs. Service Level (Fig. 3.4)

Expensive

Shangri-LaHigh

Service ModerateService

Grand

Regency

Sheraton

Italia

CastleAlexander IV

Airport Plaza

PALACE

Atlantic

Less Expensive



Positioning of Hotels in Belleville:Location vs. Physical Luxury (Fig. 3.5)

High Luxury

Shopping Districtand Convention Centre

Shangri-La

Moderate Luxury

FinancialDistrict

InnerSuburbs

Grand Regency

Sheraton

ItaliaCastle

Alexander IV

Airport Plaza

PALACE

Atlantic



Positioning after New Hotel Construction:Price vs. Service Level (Fig. 3.6)

Expensive

Shangri-LaHigh

Service ModerateService

HeritageMandarin

New GrandMarriott

Continental

Regency

Sheraton

Italia

Alexander IVAirport Plaza

PALACE

Atlantic

No action?

Action?

Less Expensive

Castle



Positioning after New Hotel Construction:Location vs. Physical Luxury (Fig. 3.7)

High Luxury

Shangri-La

FinancialDistrict

InnerSuburbs

Heritage

MandarinNew Grand

MarriottContinental

RegencySheraton

ItaliaAlexander IV

Airport Plaza

PALACE

Atlantic

No act ion?

Act ion?

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 accuratelyreflects 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

Documents

Positioning Services