Positioning Services in Competitive Markets

1. Chapter 3
Positioning Services in
Competitive Markets

2. Search for Competitive Advantage in
Services Requires Differentiation and
Focus
• Intensifying competition in service sector
threatens firms with no distinctive competence
and undifferentiated offerings
• 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

3. Standing Apart from the Competition
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

4. Basic Focus Strategies for Services
(Fig. 3.1)
BREADTH OF SERVICE OFFERINGS
Narrow Wide
Unfocused
Service (Everything
Many Focused for everyone)
NUMBER
OF MARKETS
SERVED
Fully Focused
Market
(Service and
Focused
Few market focused)
Source: Robert Johnston

5. 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

6. Uses of Positioning in
Marketing Management (Table 3.1)
• Understand relationships between products and
markets
– compare to competition on specific attributes
– evaluate product’s 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

7. Possible Dimensions for Developing
Positioning Strategies
• Product attributes
• Price/quality relationships
• Reference to competitors (usually
shortcomings)
• Usage occasions
• User characteristics
• Product class

8. Developing a
Market Positioning Strategy (Fig. 3.3)
- Size Define, Analyze
MARKET - Composition
ANALYSIS Market Segments
- Location
- Trends
Select
Target Segments
To Serve
INTERNAL - Resources
Marketing
- Reputation Articulate
ANALYSIS Desired Position Action
- Constraints
in Market Plan
- Values
Select Benefits
to Emphasize
to Customers
- Strengths
COMPETITIVE - Weaknesses Analyze
ANALYSIS - Current Possibilities for
Positioning Differentiation
Source: Adapted from Michael R. Pearce

9. Positioning of Hotels in Belleville:
Price vs. Service Level (Fig. 3.4)
Expensive
Grand
Regency
PALACE
Shangri-La
High Moderate
Service Atlantic Service
Sheraton
Italia
Castle
Alexander IV
Airport Plaza
Less Expensive

10. Positioning of Hotels in Belleville:
Location vs. Physical Luxury (Fig. 3.5)
High Luxury
Regency
Grand
Shangri-La
Sheraton
PALACE
Financial Shopping District Inner
District and Convention Centre Suburbs
Castle Italia
Alexander IV
Atlantic
Airport Plaza
Moderate Luxury

11. Positioning after New Hotel
Construction:
Price vs. Service Level (Fig. 3.6)
Expensive
Mandarin
New Grand Heritage
Marriott
Continental
Action?
Regency PALACE
Shangri-La
High No action? Moderate
Service Service
Atlantic
Sheraton
Italia
Castle
Alexander IV
Less Expensive Airport Plaza

12. Positioning after New Hotel
Construction: Location vs. Physical
Luxury (Fig. 3.7) High Luxury
Mandarin
New Grand
Continental Heritage
Marriott Regency
Sheraton Shangri-La
Action?
PALACE
Financial No action? Shopping District Inner
District and Convention Centre Suburbs
Castle Italia
Alexander IV
Atlantic
Airport Plaza
Moderate Luxury

13. 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