Definition & Concept : Positioning & Differentiation is the third logical step after the (1) Market Segmentation,

(2) Market Targeting, (commonly known as STP segmenting, targeting & positioning). In short : 1. Segmenting is dividing the whole market into uniform, manageable & profitable units, 2. Targeting is choosing a single or a few of these units & focusing on them, 3. Positioning is occupying a relative position in the minds of customers with respect to other service providers/competitors. Differentiation is slightly different but very close to positioning making the service offered something distinct or with some distinctive advantage from other offerings. 4. Definitions : The following definitions are very close and both are complementary and supplementary to each other. a. Positioning is defined as the process of establishing and maintaining a distinctive place in the market for an organisation and/or its products/services offerings. This is the creating of a distinct place in the minds of a customer, or the perception of a customer w.r.t. other companies or their products/services. b. Differentiation is defined as a company seeking to serve and creation of a different advantage or a competitive edge, that will enable the firm to serve the target market more effectively than the competitor. Positioning Strategies : According to Michael Porter, there are three basic positioning alternatives, like (1) as a product / service differentiator, (2) as a low cost leader, and (3) as a niche market offerer. He suggested that the marketer should be specialist for a few strategies rather than a generalist for several strategies. The strategies can be based on several attributes as : 1. Attribute Positioning : Based on a single attribute or feature of a service, like Malayala Manorama- no.1 in circulation, Allahabad Bank- the oldest bank, etc. 2. Benefit Positioning : Based on some benefit the customer derives using a particular service, like some new generation private banks offering ATMs & internet banking, etc. 3. Use/Application Positioning : Positioning as the best for a particular service application, like SBI offering education loans, etc. 4. User Positioning : Based on the requirements of some specific target groups, like India positioning itself as the destination of tourists seeking inner peace of mind, etc. 5. Competitor Positioning : This service is positioned primarily against a particular competitor, like IIPM positioning itself against IIMs dare to think beyond IIMs. 6. Category Positioning : Positioning as a leader of a particular category, so that it becomes synonymous with that service, like Xerox means photocopying, Essel Word means family holiday entertainment, etc.
7. Quality/Price Positioning : On the basis of quality standard at a particular price, like Oberoi hotels offer high class service at a high price range, other budget hotels offering decent minimum comfortable stay & service with all modern amenities (but not luxury) for affordable prices, etc. Marketers should be careful about their positioning strategies to prevent certain situations : 1. Some brands are over-positioned when the segment is too narrow for the offer and many potential customers fail to notice,

2. Some brands are under-positioned when the customers fail to notice any distinctive edge, 3. Some brands communicate conflicting features / benefits to create a confusion, 4. Some brands offer irrelevant or redundant features / benefits, 5. Some brands offer promises which the customer doubt whether the marketer can deliver.

Differentiation : According to the definition, differentiation is providing a special or competitive advantage to the service over that of the competitors, in any attributes, price, quality, benefit, features, delivery, etc. The customers must feel that the service offered by the company is something special or superior to others, and thereby perceive the service & the company as a favourable & respectable image in their mind. For this all the elements of the marketing mix play a role. Effective differentiation should have the following criteria : 1. Important : Customers in the target group attach some value & importance to the services offered by the company, 2. Distinctive : Customers feel that the services offered by the company has some speciality, advantage, difference, uniqueness, etc. as compared to that of the competitors, 3. Superior : Customers feel that the services offered by the company is superior to the rest in all respect, 4. Communicable : The ease with which the company communicates with the customers regarding their service offer, 5. Pre-emptive : The differentiation is such that it cant be easily copied or duplicated or equalled, 6. Affordable : Customers should be able to pay for the difference willingly,
7. Profitable : The company should maintain its profitability or profits in offering the difference, or in other words it should be profitable. Role of Positioning in Marketing Strategy : Positioning of products is easier than services positioning, because of intangible nature of the services. So the marketer has to be careful to apply the right marketing mix the additional Ps in proper context. Steps in Developing A Positioning Strategy : First the marketing research should be done to ascertain the target market, current positioning the competitors relative positioning. Then the following strategies may be adopted :1. Determining levels of positioning : The company should decide at what level its going to position its services. It can choose single level or multiple level, like LICI. 2. Identification of Attributes : The company should decide the service attributes for target market segment, like : a. Class : Like hotels offering swimming, sauna bath, health club, Joga, etc. b. Uses : Attaching a major benefit to the original service, like investment option to insurance schemes. c. Price : Delivered value to price ratio should be high, like MBA in IIMs, XLRI, XIMB, etc. d. Users : Meant primarily for a narrow group, like Disneyland for children & fun loving young people. e. Rational & Emotional Benefits : Some times customers choose to be rational, and some other times emotional, and sometimes both. 3. Location of Attributes on positioning map : This a highly graphical representation of the positioning by different service providers on the basis of one or a few or several attributes. This can be done separately for each segment. Then the marketer can decide where to position its services. 4. Evaluating positions options : Ries & Trout have given some ideas for services positioning :

a. Strengthening present position with competitors : Here the company simply enhances the major attributes, like efficiency, etc., of the services offered by it, without having a direct conflict with the market leader and without trying to change the positioning b. Identifying an unoccupied market position : Here the company tries to position its services where there is no competition or where the market is not tapped. c. Repositioning the competitors : Doing something drastic or changing several major services features, customer relationship, brand image, company policies to try to gain a separate positioning in the target segment 5. Implementing the position : This simply the implementation of the marketing mix : a. The Service : The types of services aimed at the target segments, b. The Price : Accurately & differently prices for different types of services, c. The Location : The service delivery places, d. The Promotion : The promotional messages & activities, Ads, etc. should clarify the image of the services & the company, e. The People : The class & quality of the service personnel offering a perception in the minds of a customer, f. The Process : he actual process, technological advancements, refined methods of services delivery.