Positioning Strategies for Service Providers

Topics: Marketing, Marketing mix, Strategic management Pages: 7 (1536 words) Published: February 20, 2004
Positioning Strategies for Service Providers

by Kai F. Mahnert

The following article is concerned with the importance of positioning strategies to a service provider and the associated steps in selecting and supporting such a strategy through the effective management of marketing resources and the development of a competitive advantage through superior quality management. The article is structured into two major sections dealing with a) the selection and b) the support of a firm's positional strategy.

Positioning - A Definition

Positioning is the process of identifying a service provider's various customer publics and targeting these publics with an appropriate mix of positioning strategies. It involves the creation of an image in the consumer's mind of the service provider and the services offered by the provider, thus adding tangible features to the intangible service in the form of individual perceptual qualities.

Positioning gives a service provider the opportunity for differentiation which, particularly in the service industry, is a key element for the development of a competitive advantage over other providers. Quality considerations to support a firm's positioning, once it has been established, are of considerable importance, as any chosen positioning strategy will give rise to customer expectations, which should at the very least be met, if not exceeded.

Selection of a Positioning Strategy

In the following section we will have a look at the steps involved in developing a positioning strategy for a service and the associated quality considerations. There are three major steps in the development of a positioning strategy:





Market segmentation is the process of breaking up the market into smaller, more homogeneous groups in order to facilitate a more direct marketing within these groups. Segmentation has become increasingly important in the last two decades, with the market place becoming more diverse and an increasing number of heterogeneous groups emerging. In order to not waste valuable resources firms now have to be aware of who their customers are and how these customers' needs and wants can best and most efficiently be satisfied.

Segmentation is arguably the most important step in the positioning process, as the accurate segmentation of the market place will provide the firm with a blueprint of their customers, while an improperly carried out segmentation can result in



iii.Confused Positioning

iv.Doubtful Positioning

Segmentation variables are numerous, but can generally be summarised into four major categories:





Segmentation enables the firm to chose whether to concentrate on one particular customer group, or to serve several market segments simultaneously. This depends very much on the firm's ability to differentiate its services in order to satisfy the differing needs in the various segments.


Targeting is the process of deciding on one or more of the market segments identified in the segmentation. In order to successfully target a segment, the firm has to be aware of its own strengths and weaknesses, those of the competition and the characteristics of the target segment. A measure will be applied to all identified segments in order to find those most attractive and feasible to the service provider. In doing so, the firm has to bear in mind certain criteria. These are generally the growth and profit potential of the segment in question, its size and the competitive situation. Furthermore, segments can be described in terms of:





When these measures are applied to the various segments, the firm will be able to identify those segments that offer the best competitive position, opportunity for...
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