Positioning services in competitive markets lovelock ppt

PowerPoint to accompany

Positioning Services in Competitive Markets

Based on: Text Book Chapter 3

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Marketing of Services Lecture 2

Copyright © 2011 Pearson Australia (a division of Pearson Australia Group Pty Ltd) –9781442517011/Lovelock/Services Marketing/5th edition

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Five Reflections from last week

The core service is the benefit the consumer gets from the basic service. What is the core for Airlines; Food outlets?
Supplementary services add value around the core
Supplementary services divide into two categories (Facilitating and Enhancing) with 4 supplementary services in each category
Information Technology drives marketing “Process” as well as Marketing Intelligence
The primary brand in services is the firm itself
Marketing of Services Lecture 3

Copyright © 2011 Pearson Australia (a division of Pearson Australia Group Pty Ltd) –9781442517011/Lovelock/Services Marketing/5th edition

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Objectives

Create and analyse market segments
Define and profile a target market
Create positioning maps to help you to understand how consumers perceive alternative services being offered in a marketplace
Develop a positioning strategy for a service
Marketing of Services Lecture 3

Copyright © 2011 Pearson Australia (a division of Pearson Australia Group Pty Ltd) –9781442517011/Lovelock/Services Marketing/5th edition

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The search for competitive advantage

-George Day

“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””

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Marketing of Services Lecture 3

Copyright © 2011 Pearson Australia (a division of Pearson Australia Group Pty Ltd) –9781442517011/Lovelock/Services Marketing/5th edition

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Competitive strategy:
The need for focus

In marketing terms, ‘focus’ means providing a relatively narrow product mix for a particular market segment — a group of buyers who share common characteristics, needs, purchasing behaviour or consumption patterns

Marketing of Services Lecture 3

Copyright © 2011 Pearson Australia (a division of Pearson Australia Group Pty Ltd) –9781442517011/Lovelock/Services Marketing/5th edition

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Focus strategies for service providers

Number of Services offered

Number of market segments served

E.g. Medical Specialist

E.g. Universities

E.g. Bank’s ATMs

E.g. Council Services

Market Niche

Market Focused

Service Focused

Unfocused

Few Many
Few
Many
Marketing of Services Lecture 3

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Copyright © 2011 Pearson Australia (a division of Pearson Australia Group Pty Ltd) –9781442517011/Lovelock/Services Marketing/5th edition

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Profiling Market Segments:
Business to Consumer (B2C)

Basis of Segmentation Example – Photographic Studio
Geographic 5km radius around the studio
Demographic Parents with children between ages 3 and 6 years
Psychographic Extraverted personalities
Behavioural High incidence of family pictures on display at home
Marketing of Services Lecture 3

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Copyright © 2011 Pearson Australia (a division of Pearson Australia Group Pty Ltd) –9781442517011/Lovelock/Services Marketing/5th edition

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Profiling Market Segments:
Business to Business (B2B)

Basis of Segmentation Example – A New Commercial Bank
Industry type Any industry
Business size Small and Medium Size enterprises (SME)
Location and strategic importance Located in a defined region or country
Purchasing requirements Daily banking plus short term funding requirements
Profitability At least five years of continuous profitability with a proven ROI of at least 20%
Marketing of Services Lecture 3

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Copyright © 2011 Pearson Australia (a division of Pearson Australia Group Pty Ltd) –9781442517011/Lovelock/Services Marketing/5th edition

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Examples of additional segmentation variables to consider in a Services Setting

Residential Builder
Sculptor
Tattoo Artist
Cinema

Hotel

Child Sponsorship

Wedding Planner
Fancy Dress Hire
Life Coach
Herbalist

Acupuncturist

Basis of Segmentation Service Examples
Aesthetic tastes and preferences
Quality and value expectations
Special interests and requirements
Sociocultural differences
Marketing of Services Lecture 3

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Copyright © 2011 Pearson Australia (a division of Pearson Australia Group Pty Ltd) –9781442517011/Lovelock/Services Marketing/5th edition

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Identifying a target market

Several issues should be addressed when identifying a segment to target:
Select target segment(s) according to the firm’s ability to match or exceed competing offerings
Gather research-based insights into how the various service attributes are valued by current and prospective customers
Assess whether the service offering be redesigned in a different way, place or time to better meet customer needs and/or outperform competing offerings?
Target Markets must be:

1. Measurable, 2. Accessible,

3. Sustainable, 4. Actionable

Marketing of Services Lecture 3

Copyright © 2011 Pearson Australia (a division of Pearson Australia Group Pty Ltd) –9781442517011/Lovelock/Services Marketing/5th edition

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Importance Attributes

Importance Attributes are those attributes necessary to meet the basic service requirements in a particular sector
For example, ‘safety’ is an important determinant in air travel
Rain Man
Buyers expect to see evidence of ‘Importance Attributes’ before they give that supplier any further consideration (include that supplier into their evoked set)
‘Importance Attributes’ will get you into the contest but they may not seal the deal
Marketing of Services Lecture 3

Copyright © 2011 Pearson Australia (a division of Pearson Australia Group Pty Ltd) –9781442517011/Lovelock/Services Marketing/5th edition

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Determinant Attributes

Determinant attributes are those attributes that do influence buyers’ choices between competing offerings
‘Determinant Attributes’ are often secondary service attributes but may provide the reason for consumers to choose which supplier to use
For example, in air travel, ‘Determinant Attributes’ include:
Flight scheduling,
On-board entertainment
Food/drinks
Marketing of Services Lecture 3

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Copyright © 2011 Pearson Australia (a division of Pearson Australia Group Pty Ltd) –9781442517011/Lovelock/Services Marketing/5th edition

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Have a go at these examples…

Some attributes are easily quantified, such as price, size of screen, presence of clowns, but others are difficult to quantify such as processing speed and likability of the sales representative

Large Screen

3D viewing

Big Tent

Clowns

Danger

Competitive premiums

Quick claim processing

Price

Location

Novelty value

Animals

Location

International performers

Responsive Service

Liking the salesperson

Service Firm Importance Attributes Determinant Attributes
Imax Theatre
Circus
Insurance company
Marketing of Services Lecture 3

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Copyright © 2011 Pearson Australia (a division of Pearson Australia Group Pty Ltd) –9781442517011/Lovelock/Services Marketing/5th edition

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Positioning

Positioning is the placement of a product or service in the minds of target consumers relative to competing brands
Can we create compelling differences between our service and those of competitors?
Are there weaknesses or vulnerabilities in competing offerings that we can exploit to our advantage?
“The most powerful concept in marketing is owning a word in the prospect’s mind” – Ries and Trout

Marketing of Services Lecture 3

Copyright © 2011 Pearson Australia (a division of Pearson Australia Group Pty Ltd) –9781442517011/Lovelock/Services Marketing/5th edition

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What Drives Successful Positioning?

Points of Parity (POPs) are service attributes or benefits that are seen by consumers as being the same when comparing a brand and its competitors
Points of Contention (POCs) are service attributes or benefits that consumers cannot agree to distinguish between a brand and its competitors
Points of Difference (PODs) are service attributes or benefits that consumers positively associate with a brand over its competitors
Successful service brands match competitors on POPs but assert their advantage through one or more PODs

In order for an attribute to be a POD, it should be:

Relevant
Distinctive
Believable
Marketing of Services Lecture 3

Copyright © 2011 Pearson Australia (a division of Pearson Australia Group Pty Ltd) –9781442517011/Lovelock/Services Marketing/5th edition

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Strong positioning in the market:
Six Questions you should ask….

Where in the market should we compete?
Who is our competitive set (direct, generic and indirect)?
Who is our target market(s)?
What is our service concept?
What are our Points of Difference?
What value do we offer relative to competitors?
Marketing of Services Lecture 3

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Copyright © 2011 Pearson Australia (a division of Pearson Australia Group Pty Ltd) –9781442517011/Lovelock/Services Marketing/5th edition

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Four advantages of a strong, strategic positioning statement (slogan)

It forces a company to evaluate those attributes and benefits inherent in their sector and how much value each brings to the customer

Helps consumers get a mental ‘fix’ on the service offering

Avoids head-on competition with stronger competitors

Reinforces a point of focus and consistency for the service provider

Marketing of Services Lecture 3

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Copyright © 2011 Pearson Australia (a division of Pearson Australia Group Pty Ltd) –9781442517011/Lovelock/Services Marketing/5th edition

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How may the following service providers position themselves?

Quick?
Decisive?
Timely?
Qualified?
Skilled?
Inexpensive?
Careful?
Gentle?
Should a female dentist take a different positioning?

Friendly?

Unique?

Qualified?

Skilled?

Inexpensive?

Knowledgeable?

Cleans up after?

Reliable?

Dentist

Plumber

Marketing of Services Lecture 3

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Copyright © 2011 Pearson Australia (a division of Pearson Australia Group Pty Ltd) –9781442517011/Lovelock/Services Marketing/5th edition

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Positioning maps

Positioning maps compare consumer perceptions of one service provider to others in terms of attributes (dimensions) that are key to the decision-making process

The graphic representation is easy to grasp and can be presented for 2 or more dimensions

Positioning is a dynamic process that changes over time and is impacted by the entry of new competitors

Q: How do you determine the key attributes to anchor the perceptual map’s dimensions?

A: consumer Research!

Marketing of Services Lecture 3

Copyright © 2011 Pearson Australia (a division of Pearson Australia Group Pty Ltd) –9781442517011/Lovelock/Services Marketing/5th edition

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Courier services Companies Traditional Positioning map:
Speed of delivery versus Cost

Marketing of Services Lecture 3

Copyright © 2011 Pearson Australia (a division of Pearson Australia Group Pty Ltd) –9781442517011/Lovelock/Services Marketing/5th edition

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Courier Service Companies Revised Positioning map:
Speed of Response versus Reliable fulfilment

Marketing of Services Lecture 3

PowerPoint to accompany

Lecture 3

The End

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Marketing of Services Lecture 3