Four Focus Strategies
It's not usually realistic for a firm to try to appeal to all actual or potential buyers in a market, because customers are too numerous, too widely scattered, and too varied in their needs, purchasing behavior, and consumption patterns. Firms themselves vary widely in their abilities to serve different types of customers. So rather than attempting to compete in an entire market, each company needs to focus its efforts on those customers it can serve best. In marketing terms, focus means providing a relatively narrow product mix for a particular market segment a group of customers who share common characteristics, needs, purchasing behavior, or consumption patterns. Successful implementation of this concept requires firms to identify the strategically important elements in their service operations and concentrate their resources on these factors. The extent of a company's focus can be described on two different dimensions market focus and service focus. Market focus is the extent to which a firm serves few or many markets, while service focus describes the extent to which a firm offers few or many services. These dimensions define the four basic focus strategies shown in Figure. A fully focused organization provides a very limited range of services (perhaps just a single core product) to a narrow and specific market segment. For example, Aspen Travel serves the specific needs of the film production industry. A market-focused company concentrates on a narrow market segment but has a wide range of services. Each Travel fest store serves a limited geographic market; appealing to families and individuals planning vacation trips rather than to business travelers, but offers a broad array of services. Service-focused firms offer a narrow range of services to a fairly broad market. Thus, Capital Prestige Travel specializes in the narrow field of discount cruise sailings, but reaches customers across a broad geographic market through a telephone-based delivery system. Finally, many service providers fall into the unfocused category because they try to serve broad markets and provide a wide range of services. As you can see from Figure, focusing requires a company to identify the market segments that it can serve best with the services it offers. Effective market segmentation should group customers in ways that result in similarity within each segment and dissimilarity between each segment on relevant characteristics.
CREATING AND PROMOTING COMPETITIVE ADVANTAGE
Creating a competitive advantage presents special challenges for service providers, who are often forced to compete with goods and customers' self-service options in addition to other service providers. Since customers seek to satisfy specific needs, they often evaluate reasonable alternatives that offer broadly similar benefits. For example, if your lawn desperately needs mowing, you could buy a lawn mower and do it yourself or you could hire a lawn maintenance service to take care of the chore for you. Customers may make choices between competing alternatives based on their skill levels or physical capabilities and their time availability, as well as on factors like cost comparisons between purchase and use, storage space for purchased products, and anticipated frequency of need. As you can see, direct competition between goods and services is often inevitable in situations where they can provide the same basic benefits. This concept is illustrated in Figure, which shows four possible delivery alternatives for both car travel and word processing. These alternatives are based on choices between ownership or rental of physical goods and self-service or hiring other people to perform the tasks. Of course, many businesses rely on a mixture of both goods and services to satisfy customer needs. "Quasi-manufacturing" operations like fast-food restaurants sell goods supplemented by value-added service. At each site, customers can view a menu describing...
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