QUELREN A.

MCGOWAN

BSBA 601

SERVICES MARKETING ASSIGNMENT 1

1. Identify the 3 types of competitive advantage in services and discuss each.

A competitive advantage is a set of distinct characteristics that distinguish a company and its
products from the competition in the eyes of the target market. It's what makes you stick to a brand and
why you prefer one product or service over another. Companies can take advantage of three main sorts
of competitive advantages. They are the cost leadership, differentiation leadership, and focus strategy.

The first one is cost leadership. Cost leadership refers to a company's sole focus on pricing in order
to become the market's lowest-cost producer. As a result, it is able to charge the lowest costs in order to
attract customers, giving it a competitive advantage.

This type of competitive advantage is also known as a ‘no-frills’ approach. Because money is the
most important consideration in this strategy, quality and reliability are sometimes overlooked. If this
results in disgruntled customers, it may have a long-term impact on brand image and client loyalty.

The corporation focuses on enhancing operational efficiency, which lowers the cost per unit, under
this strategy. It may, for example, seek to reduce the number of employees, implement new procedures,
and improve the supply chain. The main focus here is not on the product itself, but on how much it costs
to make it. As a result, consumers may see lower prices, but the goods may be of lesser quality.

Second one is differentiation leadership. Businesses compete on the basis of a distinct selling point,
which is known as differentiation leadership. To attract clients, businesses offer a different value
proposition than their competitors. If the price is higher, the unique selling factor will assist in justifying
the higher price.

Companies that follow a differentiation strategy are usually the first to capitalize on new market
trends. Apple, for example, developed the innovative iPhone, which revolutionized the way we consume
information and entertainment. It has established itself as a world leader in the smartphone business,
while bettering its brand image, thanks to its differentiation strategy.

Differentiation can take various forms, including great quality, higher customer service, better
features, and reliability.  It can simply refer to anything other than a product's price that distinguishes it.
As a result, the company may be able to attract customers who are looking for superior product quality
rather than a low price. While a differentiation plan might help a company stand out from the crowd, it
isn't always enough.

The third one is the focus strategy. A focus approach targets a specific portion of the whole market,
whereas cost and differentiation leadership targets the entire market. Stores for left-handed persons,
vegan shoes, and animal-friendly pubs are just a few examples.

This form of marketing approach focuses on a certain market demography with unique needs. In
general, they are small marketplaces where new businesses can enter and profit from the lack of
competition. As a result, small businesses are able to function without having to compete with giant
corporations on pricing.

Companies that use a focus approach obtain a competitive edge by focusing on a specific demand of
the customer rather than their price sensitivity. Because of the market's limited size, it is frequently
neglected, resulting in consumers willing to pay higher costs. At the same time, there is little
competition, which might be classified as a natural monopoly in some situations.

2. Identify the 4 focus strategies in services and discuss each.

Focus refers to offering a limited product mix to a certain market segment, or a set of clients with
similar qualities, demands, purchasing habits, or consumption patterns. Firms must identify the
strategically significant aspects in their service operations and focus their resources on these factors in
order to successfully apply this approach. There are four focus strategies which are fully focused, market
focused, service focused and unfocused.

A fully focused organization provides a very limited range of services (perhaps just a single core
product) to a narrow and specific market segment. For example, Aspen Travel serves the specific needs
of the film production industry.

A market-focused company concentrates on a narrow market segment but has a wide range of
services. Each Travel fest store serves a limited geographic market; appealing to families and individuals
planning vacation trips rather than to business travelers, but offers a broad array of services.

Service-focused firms offer a narrow range of services to a fairly broad market. Thus, Capital Prestige
Travel specializes in the narrow field of discount cruise sailings, but reaches customers across a broad
geographic market through a telephone-based delivery system.

Finally, many service providers fall into the unfocused category because they try to serve broad
markets and provide a wide range of services.

3. Explain the thoughts in this passage.

“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

George is implying that it is critical to have a complete awareness of, and a meaningful reaction
to, the ever-changing traits, demands, and requirements of clients who may be targeted with a specific
service in the future. In the case of services, this entails thinking about how to provide a service that
isn't currently available, giving an unique and interesting alternative to similar services that are already
available, and/or delivering services in new ways and places.