Search for Competitive Advantage in Services Requires Differentiation and Focus

Intensifying competition in service sector threatens firms with no distinctive competence and undifferentiated offerings

Positioning Services in Competitive Markets

Slowing market growth in mature service industries means that only way for a firm to grow is to take share from competitors Rather than attempting to compete in an entire market, firm must focus efforts on those customers it can serve best Must decide how many service offerings with what distinctive (and desired) characteristics

Standing Apart from the Competition

Basic Focus Strategies for Services

BREADTH OF SERVICE OFFERINGS

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 important to target customers
GEORGE S. DAY

Narrow
Service Focused

Wide
Unfocused (Everything for everyone)

Many
NUMBER OF MARKETS SERVED

Few

Fully Focused (Service and market focused)

Market Focused

Source: Robert Johnston

Four Principles of Positioning Strategy

1. Must establish position for firm or product in minds of customers 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 focus Jack Trout

Uses of Positioning in Marketing Management

Understand relationships between products and markets
compare to competition on specific attributes evaluate products ability to meet consumer needs/expectations predict demand at specific prices/performance levels

Identify market opportunities

introduce new products redesign existing products eliminate non-performing products

Make marketing mix decisions, respond to competition

distribution/service delivery pricing communication

Possible Dimensions for Developing Positioning Strategies

Product attributes Price/quality relationships Reference to competitors (usually shortcomings) Usage occasions User characteristics Product class

Developing a Market Positioning Strategy

MARKET ANALYSIS
- Size - Composition - Location - Trends Define, Analyze Market Segments

Select Target Segments To Serve

INTERNAL ANALYSIS

- Resources - Reputation - Constraints - Values

Articulate Desired Position in Market Select Benefits to Emphasize to Customers

Marketing Action Plan

COMPETITIVE ANALYSIS

- Strengths - Weaknesses - Current Positioning

Analyze Possibilities for Differentiation

Source: Adapted from Michael R. Pearce

Positioning of Hotels in Belleville: Price vs. Service Level

Expensive

Positioning of Hotels in Belleville: Location vs. Physical Luxury

High Luxury

Grand Grand Regency Sheraton PALACE Shangri-La High Service Sheraton Atlantic Moderate Service
Financial District Shopping District and Convention Centre

Regency Shangri-La

PALACE

Inner Suburbs

Castle Atlantic Castle Alexander IV Airport Plaza

Italia Alexander IV

Italia

Airport Plaza Moderate Luxury

Less Expensive

Positioning Maps Help Managers to Visualize Strategy

Positioning maps display relative performance of competing firms on key attributes Research provides inputs to development of positioning maps Challenge is to ensure that attributes employed in maps are important to target segments performance of individual firms on each attribute accurately reflects perceptions of customers in target segments Predictions can be made of how positions may change in the light of new developments in the future Simple graphic representations are often easier for managers to grasp than tables of data or paragraphs of prose Charts and maps can facilitate a visual awakening to threats and opportunities and suggest alternative strategic directions