Positioning Services in

Competitive Markets

Based on: Text Book Chapter 3

 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
 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
The search for competitive
advantage

“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 Day
?
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
Focus strategies for service
providers
Number of Services
offered
Few Many

Few Market Market

Niche Focused
Number of E.g. Medical
Specialist
E.g.
Universities
market
segments
served Many
Service Unfocused
Focused E.g. Council
E.g. Bank’s Services
ATMs
Profiling Market Segments:
Business to Consumer (B2C)
Basis of Example – Photographic
Segmentation 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
Profiling Market Segments:
Business to Business (B2B)
Basis of Example – A New
Segmentation Commercial Bank
Industry type Any industry

Business size Small and Medium Size

enterprises (SME)

Location and Located in a defined region or

strategic importance country

Purchasing Daily banking plus short term

requirements funding requirements

Profitability At least five years of continuous

profitability with a proven ROI of
at least 20%
Examples of additional segmentation
variables to consider in a Services Setting
Basis of Segmentation Service Examples
Aesthetic tastes and • Residential Builder
preferences • Sculptor
• Tattoo Artist
Quality and value • Cinema
expectations • Hotel
• Child Sponsorship
Special interests and • Wedding Planner
requirements • Fancy Dress Hire
• Life Coach
Sociocultural differences • Herbalist
• Acupuncturist
 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
 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
 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
Have a go at these examples…
Service Firm Importance Determinant
Attributes Attributes
Imax Theatre • Large Screen • Price
• 3D viewing • Location
• Novelty value
Circus • Big Tent • Animals
• Clowns • Location
• Danger • International
performers
Insurance company • Competitive • Responsive
premiums Service
• Quick claim • Liking the
processing salesperson

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
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
 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
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?
Four advantages of a strong,
strategic positioning statement
(slogan)
1. It forces a company to evaluate
those attributes and benefits
inherent in their sector and how
much value each brings to the
customer
2. Helps consumers get a mental ‘fix’
on the service offering
3. Avoids head-on competition with
stronger competitors
4. Reinforces a point of focus and
consistency for the service provider
How may the following service
providers position themselves?

Plumber
Dentist • Friendly?
 Quick? • Unique?
 Decisive?
• Qualified?
 Timely?
 Qualified? • Skilled?
Should a female dentist
 Skilled? take a different • Inexpensive?
 Inexpensive positioning?
?
• Knowledgeable?
 Careful? • Cleans up after?
 Gentle? • Reliable?
 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 Q: How do you Positioning is a

representation is determine the key dynamic process that
easy to grasp and attributes to anchor changes over time and
can be presented the perceptual map’s is impacted by the
for 2 or more dimensions? entry of new
dimensions competitors

A: consumer
Research!
Courier services Companies Traditional
Positioning map:
Speed of delivery versus Cost
Positioning map:
Speed of Response versus Reliable
fulfilment
Lecture 3

The End