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Basic Focus Strategies for Services (Fig. 3.2)
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MKT 346: Marketing of ServicesDr. Houston
Chapter 3:Positioning ServicesIn Competitive Markets
Focus Underlies the Search for Competitive Advantage
Competition is intense
Differentiation is critical
Brand positioning helps: create awareness
generate interest and desire
What service attributes do your target customers value?
Basic Focus Strategies for Services (Fig. 3.2)
Fully focusedLimited range of servicesNarrow and specific market
Considerations for Using Focus Strategies: Fully Focused
Narrow market segment
Wide range of services
Make sure you have the operational capacity!
Understand customer preferences
Know customer purchasing practices
Considerations for Using Focus Strategies: Market Focused
Narrow range of services
Fairly broad market
Need knowledge and skills for each segment
Considerations for Using Focus Strategies: Service Focused
Broad market
Wide range of services
Many service providers fall into this category
“Jack of all trades and master of none”
Not recommended!
Considerations for Using Focus Strategies: Unfocused
Market Segmentation
Identify markets you can serve best
Market segment is group of buyers with common:CharacteristicsNeedsPurchasing behaviorConsumption patterns
Similar within segments
Dissimilar between segments
Identifying and Selecting Target Market Segment
Identify market segments with most opportunities
Select one (or more) target market segment to serve
Target segments should be selected with reference to:
Company’s ability to match or exceed competing offerings directed at the same segment
Not just profit potential
Developing Right Service Concept for a Specific Segment
Use research to identify and prioritize the attributes of a given service that are important to specific market segments
Individuals may set different priorities according to:Purpose of using the serviceWho makes decisionTiming of useWhether service is used alone or with a groupComposition of that group
Important vs. Determinant Attributes
How do consumers choose between alternative services?
Perceived differencesNot necessarily the most important ones
Determinant attributesDetermine consumers’ choices between competing
alternativesService characteristics that are important to
purchasers
Establishing Service Levels
Level of performance firm plans to offer on each attributeQuantitative attributes
Qualitative attributes
Can often segment customers according to willingness to give up some level of service for a lower pricePrice-insensitive customers
Price-sensitive customers
Four Principles of Positioning Strategy
Must establish position for firm or product in minds of target customers
Provide one simple, consistent message
Position must be unique from competitors
A company cannot be all things to all people - must focus its efforts
Source: “Positioning: The Battle for your Mind” by Jack Trout
Six Questions for Developing anEffective Positioning Strategy
1. What does our firm currently stand for in the minds of current and potential customers?
2. What customers do we serve now, and which ones would we like to target in future?
3. What is value proposition for each of our current service products, and what market segments is each one targeted at?
4. How does each of our service products differ from competitors’?
5. How well do customers in chosen target segments perceive our service products as meeting their needs?
6. What changes must we make to our offerings to strengthen our competitive position?
Market, Internal and Competitive Analyses (Fig. 3.11)
Developing an Effective Positioning Strategy
Using Positioning (Perceptual) Maps to Analyze Competitive Strategy
Helps to visualize competitive positioning
“Pictures speak louder than words”
Useful way to represent consumer perceptions
Typically confined to two attributes, but can be 3-D
Perceptual data can be obtained from:
market data
representative consumer ratings
MKT 346 Key Concepts: Chapter 3
Focus underlies search for competitive advantage Four focus strategies: service focused, fully focused, market
focused, unfocused Market segmentation Service attributes: determinant attributes Determinant attributes are often the ones most important to
customers Four principles of positioning strategy: target market,
simplicity, uniqueness, total company effort Developing a marketing positioning strategy: market analysis,
internal analysis, competitor analysis Positioning maps: useful for plotting and visualizing
competitive strategy