Download - Service Marketing Chapter 1
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Services Marketing
Slide 2010 by Lovelock & Wirtz Services Marketing 7/e
Chapter 3 Page 1
Chapter 3: Positioning Services in Competitive Markets
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Services Marketing
Slide 2010 by Lovelock & Wirtz Services Marketing 7/e
Chapter 3 Page 2
Overview of Chapter 3
Focus Strategies for Services
Market Segmentation
Service Attributes and Levels
Positioning Distinguishes a Brand from its Competitors
Developing an Effective Positioning Strategy
Using Positioning Maps to Analyze Competitive Strategy
Changing Competitive Positioning
To succeed in our over-communicated society, a
company must create a position in the prospects mind, a position that takes into consideration not
only a companys own strengths and weaknesses, but those of its competitors as well.
AL REIS and JACK TROUT
The essence of strategy is choosing to
perform activities differently than rivals do.
MICHAEL PORTER
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Services Marketing
Slide 2010 by Lovelock & Wirtz Services Marketing 7/e
Chapter 3 Page 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
National Association for the Education of
Young Children (NAEYC) Accreditation
George S. Day is an educator in
the field of marketing. He is the
Professor of Marketing and co-
Director of the Mack Institute for
Innovation Management at the
Wharton School of the
University of Pennsylvania.
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Services Marketing
Slide 2010 by Lovelock & Wirtz Services Marketing 7/e
Chapter 3 Page 4
Basic Focus Strategies for Services
SKMH Rentokil Initial
Business Support
Services
Lasik Eye Surgery &
Starbucks Coffee Shops Departmental Stores
General Hospitals
Rage Width
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Services Marketing
Slide 2010 by Lovelock & Wirtz Services Marketing 7/e
Chapter 3 Page 5
Considerations for Using Focus Strategies
The essence of marketing is narrowing the focus. You become
stronger when you reduce the scope of your
operations. You cant stand for something if
you chase after everything. ~ Al Reis and Jack Trout (The 22
Immutable Laws of Marketing)
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Services Marketing
Slide 2010 by Lovelock & Wirtz Services Marketing 7/e
Chapter 3 Page 6
Market Segmentation
To be useful, market segments must be:
Requirements for Effective Segmentation
Measurable Accessible Substantial
Differentiable Actionable
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Services Marketing
Slide 2010 by Lovelock & Wirtz Services Marketing 7/e
Chapter 3 Page 7
Service Attributes and Levels
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Services Marketing
Slide 2010 by Lovelock & Wirtz Services Marketing 7/e
Chapter 3 Page 8
Positioning Distinguishes a
Brand from its Competitors
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Services Marketing
Slide 2010 by Lovelock & Wirtz Services Marketing 7/e
Chapter 3 Page 9
Positioning Distinguishes a
Brand from its Competitors
Avoid trap of investing too
heavily in points of differences that are easily copied!
What does our firm stand for in
the minds of current and
potential customers?
What customers do we serve now, and which ones would we like to
target?
What is value proposition for
our current service products,
and market segments?
How does each of our service products differ
from competitors? How well do
target customers perceive our
service products as meeting their
needs?
What changes must we make to strengthen our
competitive position?
Six Considerations for Positioning
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Services Marketing
Slide 2010 by Lovelock & Wirtz Services Marketing 7/e
Chapter 3 Page 10
Differentiation and Positioning
Identifying a set of possible competitive advantages to build a position by providing superior value from:
Choosing a Differentiation and Positioning Strategy
Product differentiation
Service differentiation
Channel differentiation
People differentiation
Image differentiation
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Services Marketing
Slide 2010 by Lovelock & Wirtz Services Marketing 7/e
Chapter 3 Page 11
Developing an Effective
Positioning Strategy
Market, Internal, and Competitive Analyses
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Services Marketing
Slide 2010 by Lovelock & Wirtz Services Marketing 7/e
Chapter 3 Page 12
Differentiation and Positioning
Positioning maps show consumer perceptions of their brands versus competing products on important buying dimensions
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Services Marketing
Slide 2010 by Lovelock & Wirtz Services Marketing 7/e
Chapter 3 Page 13
Using Positioning Maps to Analyze
Competitive Strategy
Expensive
Shangri-La High
Service Moderate Service
Grand
Regency
Sheraton
Italia
Castle Alexander IV
Airport Plaza
PALACE
Atlantic
Less Expensive
Positioning of Hotels in Belleville: Price vs. Service Level
Figure 3.3 Positioning Map
of Bellevilles Principal
Business Hotels: Services
Level versus Price Level
(Before New Competition)
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Services Marketing
Slide 2010 by Lovelock & Wirtz Services Marketing 7/e
Chapter 3 Page 14
Using Positioning Maps to Analyze
Competitive Strategy
High Luxury
High Positioning of Hotels in Belleville: Location vs. Physical Luxury Luxury
Shopping District and Convention Center
Shangri-La
Moderate Luxury
Financial District
Inner Suburbs
Grand Regency
Sheraton
Italia Castle
Alexander IV
Airport Plaza
PALACE
Atlantic
Figure 3.4 Positioning
Map of Bellevilles
Principal Business
Hotels: Location versus
Physical Luxury (Before
New Competition)
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Services Marketing
Slide 2010 by Lovelock & Wirtz Services Marketing 7/e
Chapter 3 Page 15
Using Positioning Maps to Analyze
Competitive Strategy
Expensive
Shangri-La
High Service
Moderate Service
Heritage Mandarin
New Grand
Marriott Continental
Regency
Sheraton
Italia
Alexander IV
Airport Plaza
PALACE
Atlantic
No action?
Action?
Less Expensive
Castle
Positioning After New Construction: Price vs. Service Level
Figure 3.5 Future
Positioning Map of
Bellevilles Principal
Business Hotels: Service
Levels versus Price Levels
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Services Marketing
Slide 2010 by Lovelock & Wirtz Services Marketing 7/e
Chapter 3 Page 16
Using Positioning Maps to Analyze
Competitive Strategy
High Luxury
Shangri-La
Financial District
Inner Suburbs
Heritage
Mandarin
New Grand
Marriott Continental
Regency Sheraton
Italia
Alexander IV
Airport Plaza
PALACE
Atlantic
No action?
Action?
Moderate Luxury
Castle
Shopping District and Convention Center
Positioning After New Construction: Location vs. Physical Luxury
Figure 3.6 Future
Positioning Map of
Bellevilles Principal
Business Hotels: Location
versus Physical Luxury
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Services Marketing
Slide 2010 by Lovelock & Wirtz Services Marketing 7/e
Chapter 3 Page 17
Summary Focus Strategies:
Fully focused Service focused Market focused Unfocused
Market Segmentation buyers share common characteristics, needs, purchasing behavior & consumption patterns
Service attributes determinant attributes are often the ones most important to customers
Positioning links: Market Analysis Internal Analysis Competitive Analysis
Positioning maps are useful for plotting competitive strategy: Identify potential competitive responses Help executives to visualize strategy