Competitive Marketing

Strategies

Slide ©2004 by Christopher Lovelock and Jochen Wirtz Services Marketing 5/E 15 - 1
 Market Defender Strategies

 Blocking Strategies
-Performance guarantees

-Intensive advertising

-Controlling location or access

-Higher switching costs

-Satisfied customers

 Retaliation Strategies
-Reducing service trail

-Fight aggressively to maintain market share

Slide ©2004 by Christopher Lovelock and Jochen Wirtz Services Marketing 5/E 15 - 2
 Market Defender Strategies

 Adaptation strategies
-Match the new entrant’s offers

-Expand the service package

-Develop a service niche

Slide ©2004 by Christopher Lovelock and Jochen Wirtz Services Marketing 5/E 15 - 3
 Organizing for Service
Leadership

Slide ©2004 by Christopher Lovelock and Jochen Wirtz Services Marketing 5/E 15 - 4
 Customer-Led versus Market-Oriented
Philosophies of Management

 Firms may lose market leader position if listen too closely to

current customers
 Service leadership requires curiosity, risk taking
 Customer-led businesses focus on understanding expressed
desires of customers in currently served markets
 Market-oriented businesses commit to understand current/
latent customer desires plus competitors’ plans, capabilities
 Scan market more broadly, have longer-term focus
 Work closely with lead users (windows to future vs. anchors to
past)
 Combine traditional research with experimentation, observation

 Conclusion: Pursue customer satisfaction, but set limits on

being led by customers, especially during rapid change

Slide ©2004 by Christopher Lovelock and Jochen Wirtz Services Marketing 5/E 15 - 5
 Integrating Three Functional Imperatives

Marketing Human Resources

Imperative Imperative

Customers

Operations
Imperative

Slide ©2004 by Christopher Lovelock and Jochen Wirtz Services Marketing 5/E 15 - 6
 Defining Three Functional Imperatives

 Marketing Imperative
 Target “right” customers and build relationships
 Offer solutions that meet their needs
 Define quality package with competitive advantage

 Operations Imperative
 Create, deliver specified service to target customers
 Adhere to consistent quality standards
 Achieve high productivity to ensure acceptable costs

 Human Resource Imperative

 Recruit and retain the best employees for each job
 Train and motivate them to work well together
 Achieve both productivity and customer satisfaction

Slide ©2004 by Christopher Lovelock and Jochen Wirtz Services Marketing 5/E 15 - 7
 Reducing Intra-Organizational Tension

 Transfers and cross training

 Cross functional taskforces
 New tasks and new people
 Process management teams
 Gain-sharing programs

Slide ©2004 by Christopher Lovelock and Jochen Wirtz Services Marketing 5/E 15 - 8
 The Search for Synergy:
A Top Management Perspective

What do we want?

What do our employees, What do our

intermediaries, and
customers want?
other partners want?

What can we do?

Slide ©2004 by Christopher Lovelock and Jochen Wirtz Services Marketing 5/E 15 - 9
 From Losers to Leaders:
Moving Up the Service Performance Ladder

Service Leaders
 Pioneers of their respective industries like Jan Carlzon of SAS
,Fred Smith of FedEX, Colin Marshal of British Airways,Ray Korc
of McDonald and Herbert Kelleher of South West Airlines.
 Names synonymous with outstanding service, customer delight

Service Professionals
Clear positioning strategy

 Sustained reputation for meeting customer expectations

 Service Non-entities
 Traditional operations mindset
 Rudimentary marketing, often emphasizing price discounts

 Service Losers
 Only survive because of lack of viable alternatives in marketplace

Slide ©2004 by Christopher Lovelock and Jochen Wirtz Services Marketing 5/E 15 - 10
 Achieving Service Leadership by Focusing on
Role of Each Functional Area

 Marketing: move from tactical to innovative and

strategic

 Operations: move from reactive/cost oriented to

focused, innovative, well coordinated with
marketing and HR

 Human Resources: move from tight control of low-

cost workers to quality of employees as strategic
advantage

Slide ©2004 by Christopher Lovelock and Jochen Wirtz Services Marketing 5/E 15 - 11
 Leadership for Change Management Involves
Eight Stages

 Create sense of urgency to develop impetus for change

 Put together strong team to direct process
 Create appropriate vision of where organization must go
 Communicate new vision broadly
 Empower employees to act on vision
 Produce sufficient short term results to create credibility
 Build momentum to tackle tougher problems
 Anchor new behaviors in the organizational culture
Source: John Kotter

Slide ©2004 by Christopher Lovelock and Jochen Wirtz Services Marketing 5/E 15 - 12
 Transformational Leadership May Require
Changing Corporate Culture

 Corporate Culture:
 Shared perceptions regarding what is important
 Shared values about what is right and wrong
 Shared understanding about what works and what doesn’t
 Shared beliefs about why these things are important
 Shared styles of working and relating to others

 Climate for Service--Tangible working environment atop

underlying culture. Influential factors include:
 Shared perceptions concerning practices, procedures and types of
behaviors that get rewarded
 Clarity about mission and values, level of commitment to common
purpose
 Flexibility: freedom to innovate, sense of responsibility, standards

Slide ©2004 by Christopher Lovelock and Jochen Wirtz Services Marketing 5/E 15 - 13