Lecture 07 Lovelock

8/8/2019 Lecture 07 Lovelock

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Chapter 3

Positioning Services inCompetitive Markets


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Search for Competitive Advantage in ServicesRequires Differentiation and Focus

Intensifying competition in service sector threatens firmswith no distinctive competence and undifferentiatedofferings

Slowing market growth in mature service industries meansthat only way for a firm to grow is to take share fromcompetitors

Rather than attempting to compete in an entire market, firmmust focus efforts on those customers it can serve best

Must decide how many service offerings with whatdistinctive (and desired) characteristics


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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 areimportant to target customers

GEORGE S. DAY


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Basic Focus Strategies for Services (Fig. 3.1)

BREADTH OF SERVICE OFFERINGS

NUMBEROF MARKETSSERVED

Narrow

Many

Few

Wide

ServiceFocused

Unfocused(Everything

for everyone)

MarketFocused

Fully Focused(Service andmarket focused)

Source: Robert Johnston


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Four Principles of Positioning Strategy

1. Must establish position for firm or product in minds ofcustomers

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


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Uses of Positioning inMarketing Management (Table 3.1)

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


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Possible Dimensions for DevelopingPositioning Strategies

Product attributes

Price/quality relationships

Reference to competitors (usually shortcomings)

Usage occasions

User characteristics

Product class


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Developing aMarket Positioning Strategy (Fig. 3.3)

- Size

- Composition

- Location

- Trends

Marketing

Action

Plan

MARKET

ANALYSIS

INTERNAL

ANALYSIS

- Resources

- Reputation

- Constraints

- Values

COMPETITIVE

ANALYSIS

- Strengths

- Weaknesses

- Current

Positioning

Define, Analyze

Market Segments

Select

Target Segments

To Serve

Articulate

Desired Position

in Market

Select Benefits

to Emphasizeto Customers

Analyze

Possibilities for

Differentiation

Source: Adapted from Michael R. Pearce


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Positioning of Hotels in Belleville:Price vs. Service Level (Fig. 3.4)

Expensive

Shangri-LaHigh

ServiceModerateService

Grand

Regency

Sheraton

Italia

CastleAlexander IV

Airport Plaza

PALACE

Atlantic

Less Expensive


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Positioning of Hotels in Belleville:Location vs. Physical Luxury (Fig. 3.5)

High Luxury

Shopping District

and Convention Centre

Shangri-La

Moderate Luxury

Financial

District

Inner

Suburbs

GrandRegency

Sheraton

ItaliaCastle

Alexander IV

Airport Plaza

PALACE

Atlantic


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Positioning after New Hotel Construction:Price vs. Service Level (Fig. 3.6)

Expensive

Shangri-LaHigh

ServiceModerateService

HeritageMandarin

New Grand

MarriottContinental

Regency

SheratonItalia

Alexander IV

Airport Plaza

PALACE

Atlantic

No action?

Action?

Less Expensive

Castle


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Positioning after New Hotel Construction:Location vs. Physical Luxury (Fig. 3.7)

High Luxury

Shangri-La

FinancialDistrict

InnerSuburbs

Heritage

Mandarin

New Grand

MarriottContinental

RegencySheraton

ItaliaAlexander IV

Airport Plaza

PALACE

Atlantic

No action?

Action?

Moderate Luxury

Castle

Shopping Districtand Convention Centre


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Positioning Maps Help Managers toVisualize Strategy

Positioning maps display relative performance of competingfirms on key attributes

Research provides inputs to development of positioning maps

Challenge is to ensure that

attributes employed in maps are important to target segmentsperformance of individual firms on each attribute accurately

reflects perceptions of customers in target segments

Predictions can be made of how positions may change in thelight of new developments in the future

Simple graphic representations are often easier for managers tograsp than tables of data or paragraphs of prose

Charts and maps can facilitate a visual awakening to threatsand opportunities and suggest alternative strategic directions

Lecture 07 Lovelock

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Transcript of Lecture 07 Lovelock