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Positioning Services in Competitive Markets

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Nina Aznan

on 28 April 2014

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Transcript of Positioning Services in Competitive Markets

Positioning Services in Competitive Markets
Positioning strategy in a service context
- positioning strategy is about creating, communicating, and maintaining distinctive differences that will be noticed and valued by customers
- need to identify what makes customers select and remain loyal to one supplier over another
- differentiate products in ways that are meaningful to the customers
- requires managers to understand their target customers' preferences,their conception of value, and the characteristics of their competitors' offerings
- managers need to think systematically about all the facet of the service offering and emphasize competitive advantage on attributes valued by customers
Market segmentation forms the basis for focused strategies
Step 4
Four focus strategies to achieve competitive advantage
Fully Focused
- provides a limited range of services to a narrow and specific market segment
- example : private jet charter services may focus on high-net-worth individuals or corporations
- outcomes : provide protection against would-be competitors and allows a firm to charge premium prices
Market Focused
- offers a wide range of services to a narrowly defined target segment
- sell multiple services to a single buyer
- example : a plant nursery may not only sell plants but might also sell fertilizers and vases to plant lovers
- outcomes : need to be sure that their firms are capable of doing an excellent job of delivering each of the different services selected
- need to understand customers’ purchasing practices and preferences
Service Focused
- offer a narrow range of services to a fairly broad market
- example : an eye hospital who treats patients regarding eye issues
- outcomes : require a broader sales effort and greater investment in marketing communication
- serve broad markets and provide a wide range of services
- example : hypermarkets (Daiso)
- outcomes : jacks of all trades and masters of none
means providing a relatively narrow product mix for a particular market segment
- there are 2 dimensions,
market focus
service focus
market focus
: a firm serves few or many markets
service focus
: a firm offers few or many services
= aggregating of prospective buyers into groups (segments) that have common needs and will respond similarly to a marketing action
- rather than trying to compete in an entire market, firms should segment the market, identify which segment they can serve best
-target segment = one that a firm has selected from among those in the broader market and may be defined on the basis of several variables.
- target segment can be targeted based on many segmentation, such as geographic, demographic, and behavioral intention.
- as there are maybe other firms targeting the same target segment, the department need to create a distinctive appeal.
- in selecting target segment, the managers should not select not only on the basis of their sales and profits potential, but also considering the firm's ability to match or exceed competing offerings directed towards the same segment.
Step 4
Service Attributes and Levels
- firms need to identify which attributes of a given service are important to specific segments and how well the customers perceive competing organizations as performing against these attributes.
- however, every individual may have different priorities for attributes according to:
-the purpose of consuming the service
- who makes the decision
- the timing of use
- whether the customer is using the service alone or with group, and if the latter, the composition of the group
Important attributes
- are those characteristics of a product or service that are important in the minds of consumers for all products or services in a given category
- important attributes for toothpaste might include price, cleaning teeth, and making breath smell better
- customers who are going to buy a toothpaste will be looking for a product that satisfy all these three attributes
Determinant attributes
- are those characteristics of a product or service that actually affect a consumer’s decision to purchase one product or service over another
- in a toothpaste example :teeth whitening, cavity protection
- every product should have at least one determinant attribute, some will have more than one
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