Positioning Services in Competitive Markets Outline

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SERVICE MARKETING

CHAPTER 3 : Positioning Services in Competitive Markets
Overview of Chapter 3
Achieve Competitive Advantage through Focus
Market Segmentation Forms the Basis for Focused Strategies •Service Attributes and Levels
Developing an Effective Positioning Strategy
Using Positioning Maps to Analyze Competitive Strategy

Achieve Competitive Advantage Through Focus

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 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)

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 are to target customers (and do it at a profit)

-George S. Day
Basic Focus Strategies for Services
(Fig. 3.2)

Considerations for Using the Focus Strategies
1.Fully focused
-Limited range of services to narrow and specific market
2.Opportunities
-Developing recognized expertise in a well-defined niche may provide protection against would-be competitors -Allows firms to charge premium prices
3.Risks
-Market may be too small to generate needed volume of business -Demand for a service may be displaced by generic competition from alternative products -Purchasers in chosen segment may be susceptible to economic downturn 4.Market focused

-Narrow market segment with wide range of services
-Need to make sure firms have operational capability to deliver each of the different services selected -Need to understand customer purchasing practices and preferences 5.Service focused
-Narrow range of services to fairly broad market
-As new segments are added, firm needs to develop knowledge and skills in serving each segment 6.Unfocused
-Broad markets with wide range of services
-Many service providers fall into this category
-Danger – become a “jack of all trades and master of none”

Market Segmentation Forms the basis for Focused Strategies
Market Segmentation
-Firms vary widely in ability to serve different types of customers -Adopt strategy of market segmentation, identifying those parts of market can serve best -A market segment is composed of a group of buyers sharing common: Characteristics

Needs
Purchasing behavior
Consumption patterns
-Within segments, they are as similar as possible. Between segments, they are as dissimilar as possible

Identifying and Selecting Target Segments
-A target segment is one that a firm has selected from among those in the broader market and may be defined on the basis of multiple variables -Must analyze market to determine which segments offer better opportunities -Target segments should be selected with reference to

-Firm’s ability to match or exceed competing offerings directed at the same segment -Not just sales potential
-Some ‘underserved’ segments can be huge, especially poor consumers in emerging economies, e.g. low-income group in Philippines

Service Attributes and Levels
Developing Right Service Concept for a Specific Segment
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 vs. Determinant Attributes
oConsumers usually choose between alternative service offerings based on perceived differences between them oAttributes that distinguish competing services from one another are not necessarily the...
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