Service Marketing Chapter 1

Services Marketing

Slide 2010 by Lovelock & Wirtz Services Marketing 7/e

Chapter 3 Page 1

Chapter 3: Positioning Services in Competitive Markets

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

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.

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

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)

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

Services Marketing

Slide 2010 by Lovelock & Wirtz Services Marketing 7/e

Chapter 3 Page 7

Service Attributes and Levels

Services Marketing

Slide 2010 by Lovelock & Wirtz Services Marketing 7/e

Chapter 3 Page 8

Positioning Distinguishes a

Brand from its Competitors

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

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

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

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

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)

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)

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

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

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