Course Code: 19MMT506A

Course Title: Services Marketing

Course Leader:

Prof H N Nagesha
E-mail: hnagesha.ms.mc@msruas.ac.in

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Faculty of Management and Commerce © Ramaiah University of Applied Sciences
 Unit 3
Segmentation, Targeting and Positioning Services in
Competitive Markets
• Market Segmentation and Targeting
• Positioning of Services
• Service Attributes and Levels
• Positioning to distinguish a Brand from Its
Competitors
• Developing an Effective Positioning Strategy
• Positioning Maps
• Repositioning

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 Introduction
• Positioning of Services is concerned with
creating, communicating, and maintaining
distinctive differences
• Differences noticed and valued by those
customers
• Most like to develop a long-term relationship

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Faculty of Management and Commerce © Ramaiah University of Applied Sciences
 Introduction
• Positioning of services normally relates to Price
and Product attributes
• Also to customers convenience, ease of use
• Also to other attributes:
– Distribution systems
– Service schedules
– Locations
– The service’s environment
– Service personnel
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 Achieving Competitive Advantage Through Focus

Breadth of Service Offerings

Wide Narrow

Fully Focused
Few Market Focused (Market and Service
Focussed)
No. of
Markets
Served
Unfocused
Many (Everything for Service Focused
everyone)

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Faculty of Management and Commerce © Ramaiah University of Applied Sciences
 Achieving Competitive Advantage Through Focus

Fully-focused: Organization provides a limited range of

services (perhaps just a single core product) to a narrow
and specific market segment
• Example: Hospital providing Heart surgery only

Market-focused: A company offers a wide range of

services to a narrowly defined target segment

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Faculty of Management and Commerce © Ramaiah University of Applied Sciences
 Achieving Competitive Advantage Through Focus

Service-focused: Firms offer a narrow range of services

to a fairly broad market
• Example: Lasik eye surgery clinics and Starbucks coffee
shops serving a broad customer base with a largely
standardized product
Unfocused: service providers try to serve broad markets
and provide a wide range of services

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 Market Segmentation and Targeting
Capabilities of service firms Services vary widely
to serve different types of customers
Firms have to identify those customers or
segments of the markets that they can serve
best

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Faculty of Management and Commerce © Ramaiah University of Applied Sciences
 Market Segmentation and Targeting
Market segment: A group of customers who share
common characteristics, needs, purchasing
behaviour, or consumption patterns
Segmentation: Will group buyers into segments
/groups
 Geographic, demographic, ….
 Personal service form knowledgeable staff – low or high
 Price sensitivity,..
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 Market Segmentation and Targeting
Target segment: A segment selected by the firm
to serve
Some segments offer better opportunities than
others

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 Service Attributes and Levels
• Service Attributes are specific to the given
service and are to be identified
• Choosing a restaurant for lunch:
– On vacation with friends or family
– Meeting with a prospective business client
– Going for a quick meal with a coworker

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 Service Attributes and Levels
Establishing Service Levels:
• Some service attributes are easily quantified
• Example: Price, Punctuality of transport services
• Some service attributes are qualitative - subject to
individual interpretation
• Example: the quality of personal service or a hotel’s
degree of luxury

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Faculty of Management and Commerce © Ramaiah University of Applied Sciences
 Positioning of Services
Elements of a
Key Concepts
Positioning Strategy
Segmentation • Segmenting service markets
• Service attributes and service levels relevant for
segmentation
– Important versus determinant attributes
– Establishing service levels
Targeting Targeting service markets through four focus strategies:
– Fully focused
– Market focused
– Service focused
– Unfocused
Positioning • Positioning services in competitive markets
• Using positioning maps to plot competitive strategy
• Developing an effective positioning strategy

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 Positioning of Services
• Positioning distinguishes a brand from its competitors
• Essence of Positioning are (Jack Trout):
– A company must establish a position in the minds of its targeted
customers
– The position should be singular, providing one simple and
consistent message
– The position must set a company apart from its competitors
– A company cannot be all things to all people—it must focus its
efforts

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 Developing an Effective Positioning Strategy
• Positioning involves decisions on attributes important to
customers
• Positioning links market analysis and competitive
analysis to internal corporate analysis
• To improve a product’s appeal to a specific target
segment, it may be necessary to change product
features and its available times and locations, or to
change the forms of delivery offered

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 Developing an Effective Positioning Strategy

• Position statement is developed for a firm to

enable them to answer the questions:
1. What is our product (or service concept)?
2. What do we want it to become?
3. What actions must we take to get there?

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 Developing an Effective Positioning Strategy

• Developing a positioning strategy can take place

at several different levels
• A position might be established for the entire
organization, for a given service outlet, or for a
specific service offered at that outlet

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Faculty of Management and Commerce © Ramaiah University of Applied Sciences
 Developing an Effective Positioning Strategy

• Consistency between the positioning of different

services offered at the same location is must
• Hospital having excellent reputation for warm
and competent obstetrical services, may
enhance perceptions of its services in
gynecology and pediatrics.

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 Developing an Effective Positioning Strategy

• Positioning links market analysis and competitor

analysis to internal corporate analysis

1. Market analysis: addresses factors such as:

– The overall level and trend of demand
– The geographic location of this demand - demand
increasing or decreasing

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Faculty of Management and Commerce © Ramaiah University of Applied Sciences
 Developing an Effective Positioning Strategy

2. Internal corporate analysis: To identify –

– The organization’s resources - financial, human
resources and know-how, and physical assets
– Limitations or constraints
– Goals -profitability, growth, professional preferences,..
– How its values shape the way it does business

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Faculty of Management and Commerce © Ramaiah University of Applied Sciences
 Developing an Effective Positioning Strategy

3. Competitors Analysis:
• To assess competitors’ strengths and weaknesses
• To suggest opportunities for differentiation

• Competitor analysis and Internal analysis

combined will suggest viable opportunities for
differentiation and competitive advantage

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 Developing an Effective Positioning Strategy

Position Statement:
• The outcome of integrating three forms of analysis
is a statement
• Articulates the desired position of the organization
in the marketplace
• Marketers can develop a specific plan of action

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 Developing an Effective Positioning Strategy
Define and analyse
• Size
market segments
Market • Composition
Analysis • Location
• Trends Select target segments to
serve

• Resources
Internal • Reputation Articulate desired Marketing
Analysis • Constraints position in the market Action Plan
• Values
Select benefits to
emphasize to customers
• Strengths
Competitor • Weaknesses
Analysis • Current
Analyse possibilities for
positioning differentiation

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 Positioning Maps
• Tools to visualize competitive positioning
• Depict developments over time, and develop
scenarios of potential competitor responses
• Also known as perceptual mapping
• Represent consumers’ perceptions of alternative
products graphically
• Usually confined to two attributes
• 3-D models used to portray three attributes
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 Positioning Maps – Hotel Industry
• Customers choose based on:
– Degree of luxury and comfort in physical amenities
– Other physical spaces - reception area, meeting
rooms, business center, restaurants, a swimming pool,
and exercise facilities
– Quality and range of services offered by hotel staff
– Ambiance of the hotel
– Quietness, safety, cleanliness, and special rewards
programs for frequent guests
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 Positioning Maps – Hotel Industry - Palace
• Located on the edge of the booming financial district
• Elegant old hotel, extensively renovated and modernized a
few years earlier
• Very profitable in recent years and boasted an above
average occupancy rate
• Strong appeal to business travelers and sold out on
weekdays
• Not favored by tourists or conference delegates

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 Positioning Maps – Hotel Industry - Palace
• Four attributes were selected for study
1. Room price
2. Level of personal service
3. Level of physical luxury
4. Location

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 Positioning Maps – Hotel Industry

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 Positioning Maps – Hotel Industry - Palace
• Hotels that offer higher levels of service are
relatively more expensive - shaded bar
– Top End: 4-star Regency is close to five-star Grand
– Middle: Palace is clustered with 4 other hotels
– Lower end: another cluster of three hotels

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 Positioning Maps

Chocolate Bar Market Car Market

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 Positioning Maps
• Maps demonstrates competitive situations visually
• Graphic representations are much easier to grasp
Compared to tables of data/ paragraphs
• Maps facilitate “visual awakening”
• Enable senior managers to compare their business
with that of competitors

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 Changing Competitive Positioning
Repositioning:
• Markets are constantly changing
• Firms have to make significant changes in their
position
• Changing Perceptions through Advertising
• Successful service firms are imitated by their
competitors

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 References

– Lovelock, Wirtz and Chatterji (2013), Services

Marketing - People, Technology and strategy, 7th
Edition, Pearson Education

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 Disclaimer

• All data and content provided in this presentation

are taken from the reference books, internet –
websites and links, for informational purposes only.

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