How To Position and Differentiate in the Market? GRADUATE PROJECT COURSE BMKT 695 HOW TO DIFFERENTIATE AND POSITION IN THE SERVICE MARKET? Submitted to the Lebanese International University The School of Business In Fulfillment of the Requirements for the Degree of (Master in Marketing) By HADIL BOU OMAR ID N o .50830348 Tripoli, Lebanon 1
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How To Position and Differentiate in the Market?
GRADUATE PROJECT
COURSE BMKT 695
HOW TO DIFFERENTIATE AND POSITION IN THE SERVICE MARKET?
Submitted to the Lebanese International University
The School of Business
In Fulfillment of the
Requirements for the Degree of
(Master in Marketing)
By
HADIL BOU OMAR
ID No.50830348
Tripoli, Lebanon
Supervised by Advisor
Dr. Sam El Nemer
Spring 2013-2014
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How To Position and Differentiate in the Market?
DEDICATIONS
I would like to dedicate this work to Almighty God for the blessings and strength.
To my husband, son and family for their support.
Without your counsel I could not have completed this process.
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How To Position and Differentiate in the Market?
ACKNOWLEDGEMENTS
First I would like to take the greatest pleasure in conveying deep thanks to those who helped
make the completion of this work possible. To Dr. Sam El Nemer for his guidance, thorough
instructions, and kind support over my graduate project, his constructive criticism was very
much appreciated. My honest cannot thank him enough.
There are people who have been instrumental to me and whose contribution I truly
appreciate. I would like to thank my family for their love and support during my study period.
I owe special thanks for my instructors, friends, and every close person who encouraged me
to make this project possible.
I'm also grateful for the love and support of my husband, and most importantly I thank the
Almighty God for the life and good health he gave me throughout the writing of this thesis.
Last but not least I owe special thanks for that who has always given me overwhelming
encouragement. My gratitude to you goes beyond what words express.
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How To Position and Differentiate in the Market?
ABSTRACT
This study aims to investigate the theoretical framework of positioning and differentiation
strategies; (how a company can create a unique and distinctive image for a brand relative to
competition and how brand should be perceived as different from competitors by consumers.)
The project also attempt to investigate and relates the topics on the level of market
differentiation, focusing on (price/quality differentiation), and how a company can gain a
competitive advantage over competitors.
I used both quantitative and qualitative research approaches in my study and relied mainly on
primary data.
I made use of STP model and other studies to explain that phenomenon, and applied the T-
Test to evaluate the hypothesized relationships. Further we qualitatively analyzed aspects of
the data hinging on explanatory aspects of our research.
The results among other things revealed that other laser clinics service quality (especially
responsiveness and empathy), technologies and innovation, promotional strategies and
advertising campaigns plus low prices are important instigators of customer satisfaction and
loyalty, which in return the company position is being affected.
Finally the findings of this study agreed to a large extent with the theoretical principles and
empirical results espoused in the literature review. The analyses of the results have confirmed
all the stated hypotheses
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How To Position and Differentiate in the Market?
TABLE OF CONTENT
PART I: THE THEORETICAL FRAMEWORK 8
CHAPTER 1: INTRODUCING THE GRADUATE PROJECT 91. INTRODUCTION 9
2. OVERVIEW OF THE SECTOR/DOMAIN/ORGANIZATIONS 15
CHAPTER 2: LITERATURE REVIEW1. MAIN TOPIC (Positioning) 192. SUBTOPIC 1 (Differentiating strategies) 313. SUBTOPIC 2 (Model of positioning) 40
PART II: THE PRACTICAL FRAMEWORK 43
CHAPTER 3: RESEARCH METHODOLOGY 441. DATA COLLECTION METHOD 442. STUDY LIMITATIONS 62
CHAPTER 4: FINDINGS AND RESULTS 701. DATA ANALYSIS METHOD 702. FACT FINDING RESULTS 106
PART III: GRADUATE PROJECT CONCLUSIONS AND RECOMMENDATION 111
Figure 4.1: Bar chart…………………………………………..……………….……93
Figure 4.2: Bar chart…………………………………………………………..….....98
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How To Position and Differentiate in the Market?
PART I
THE THEORETICAL FRAMEWORK
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How To Position and Differentiate in the Market?
CHAPTER 1: INTRODUCING THE GRADUATE PROJECT
In this chapter there will be an introduction for the reader to the structure of the thesis,
background of the study, definition of the problem, purpose of the study, and definition of key
concepts of the conceptual framework.
1. INTRODUCTION
1.1 Introduction of the project:
This project will investigate the theoretical framework of positioning and
differentiation strategies; (how a company can create a unique and distinctive
image for a brand relative to competition, and how brand should be perceived as
different from competitors by consumers.)
The project also attempt to investigate and relates the topics on the level of
market differentiation, focusing on (price/quality differentiation), and how a
company can gain a competitive advantage over competitors.
Figure 1.1: Positioning Model
Source: Donnelly, J. H. (2002).
1.2 Introduction of the company:
Silkor a (laser medical center) operating in Lebanon and Middle East. Silkor is
an industry pioneer and a leading chain of laser hair removal; it addresses customer
needs with the most advanced, proven, non-invasive medical and aesthetic
technology. Silkor enhances the personal well-being, confidence and self-esteem of
its customers in a safe and professional environment.
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How To Position and Differentiate in the Market?
1.3 Research problem.
Positioning is about how you differentiate your business in the mind of your
Prospects. (Kotler, 1995)
Differentiating a business is a competitive business strategy; where firm attempt to
gain competitive advantage by increasing the perceived value of their
products/services relative to the perceived value of other firms.
The challenges begin by finding ways to differentiate:
Create value for buyers.
Not being easily copied or matched by rivals.
Service markets face several problems in positioning, because service is intangible
image, so a specific image should be linked with a specific brand name.
It is more difficult to perceive service quality, because services are intangible and
variable and they are simultaneously produced and consumed.
Consumers usually rely on extrinsic cues to evaluate a service quality, because
quality services vary from day to day, from persons to persons and from customer to
customer.
The framework for researching service quality stems from the premise that a
consumer evaluation of quality is a function of the magnitude and direction of gap
between expectation and perception.
High prices of a service could also be a problem for differentiating a business,
because how consumer perceives a price, has a strong influence on both purchase
intention and satisfaction
Figure 1.2: Differentiation model.
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How To Position and Differentiate in the Market?
Source: Kotler, P. & Armstrong, G. (2008).
So the main problems of this research would be:
Service differentiation is hard since service is intangible and may vary from
person to other.
Positioning a service is more difficult than positioning a product because of
the need to communicate vague and intangible benefits.
Even companies who cultivate long-term relationships and provide extra
service cannot count on customer loyalty, since customer count on best
services with affordable prices.
The influence of competition on customers can form a discipline of new
decision behaviors.
Services perceived prices may affect customer perception and satisfaction.
The use of price/quality differentiation fosters a calculative behavior, where
customers continually look for the best deal, which lead to customer churn
and increased acquisition cost.
Competitions cutting into the service market share affect consumer choices
and perceptions.
1.4 Objectives of the graduate project:
Given the explanatory nature of some aspects of this projects objectives,
I will provide you with detailed information, a focused qualitative research
(Theoretical framework) Would be used to explore and understand the concept of
differentiation and Positioning strategies, so the overall objective is to "understand
the essence of positioning and differentiating a service".
This has been broken into sub- objectives, which reflects the research questions.
The most important part of research is to define the research question. By defining
the research question I will be able to specify and quote the research objectives,
hypothesis to be tested, information needs, and the appropriate research design. This
study attempts to answer the following:
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How To Position and Differentiate in the Market?
Research questions:
Research Question 1: What are the main competitive factors that affect consumer choices in
the Laser Beauty Industry?
Research Question 2: What should Silkor do to differentiate itself from competition?
Research Question 3: How can Silkor maintain market leadership in customer’s minds over
the long run?
These research questions use concept statements and appeal ratings to assess qualities of
positioning distance, or differentiation power.
The main research question is divided in to several sub-research questions that correspond.
How does competition cut into the company market share affect the company
position?
How does differentiation help the company achieve a competitive advantage?
How does meaningful and believable position build customers loyalty?
How does understanding customer needs and perceiving competition, lead to
effective positioning?
How do errors and mistakes affect positioning of a company?
Why positioning a service is much harder than positioning a product?
How can price/quality differentiation affect a company position?
Why it is essential for a firm to stay in touch with the market and reposition
itself before it suffers in terms of image and revenue?
How positive influencing growth and capturing new customers promote
loyalty to a brand?
Why ineffective differentiation can leave the business buried in the middle or
at the bottom of the pack?
What are the primary market differentiation strategies that help the firm
overcome the competition?
How does the relationship between communicating and monitoring position
anticipate competitor's moves?
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How To Position and Differentiate in the Market?
The following research questions are answered with the qualitative study done through the
literature review.
The research will be carried out to refine the objectives and provide detail for the next stage
that gives a useful indication about the company (Silkor), by conducting a quantitative
research (practical framework). I propose to carry out a questionnaire conducted on Silkor
customer as an effective way for contacting relevant respondents.
The overarching goal of this thesis is to determine and explain the concept of differentiating
and positioning a company service, and the ways by which a firm can stay ahead of the
competition.
For the purpose there will be more focus on understanding, how customers perceive a
company position, and how he differentiates it from competitor position.
The following research objectives are to explain in detail what the study is expected to
achieve:
To understand the essence of competitive positioning.
To discover strategies used in effective positioning.
To determine position techniques that companies use to stay ahead with
competitors.
To identify the positioning errors made by firms.
To allow in-depth exploration of Mechanisms related to how well the
company products and Services are perceived by Customers, and how the firm
can achieve a competitive advantage over the Competition.
To list the ways a company can reach and win a market.
To uncover the method used to reposition a business.
To identify why position a service is harder than positioning manufacturing
products.
To list the primary market differentiation strategies.
To understand the nature and terminology of differentiation.
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How To Position and Differentiate in the Market?
1.5 Research Hypothesis
Null hypotheses:
(H01): Competitive price and customer loyalty are independent.
(H02): Competitive promotional strategies and advertising campaign are independent with
customer loyalty.
(H03): Competitive high quality services and customer's loyalty and satisfaction are
independent.
(H04): Competitive new technologies and innovation, and customers choices and decisions
are independent.
Alternative Hypotheses:
HA1: When Silkor direct competitors reduce their price, customers will be drawn away from
Silkor.
HA2: When Silkor direct competitors launch promotional strategies and advertising
campaigns, customers will be drawn away from Silkor.
HA3: High quality services relates positively in affecting Silkor customers loyalty and
satisfaction.
HA4: Laser medical centers new technologies and innovations are affecting customer's
perceived choices and decisions.
Figure 1.3: The project hypotheses.
H1: competitive technologies
H2: competitors low prices
H3 : competitors promotions
H4 : competitors high quality
services
Affecting customer choices and decisions
Silkor position is affected
Silkor must differentiate itself from competition
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How To Position and Differentiate in the Market?
2. OVERVIEW OF THE SECTOR/DOMAIN/ORGANIZATIONS
Silkor (Laser medical center)
2.1. Company Profile and History
Established in Beirut Lebanon in 1997, Silkor is an industry pioneer and the Middle
East and North Africa (MENA) region's leading chain of laser hair removal, laser medico-
aesthetic and skin care services. The company specializes in treatments that promote
smoother, more radiant skin, for both men and women.
Treatments are performed by highly skilled dermatologists and medical practitioners and take
place in a relaxed comforting atmosphere.
Silkor addresses customer needs with the most advanced, proven, non-invasive medical and
aesthetic technology. Silkor enhances the personal wellbeing, confidence and self-esteem of
its customers in a safe and professional environment
The name Silkor is a play on words combining the English "Silk" with the French
"Corps"(body). This encapsulates the Silkor mission - to provide the smoothest and least
intrusive luxury laser medico-aesthetic and skin care treatments.
In June 2009, a peaceful Lebanese general election took place, bringing back a pro-western
government. Lebanon's economy was booming, it was during that time that brother and sister,
Oscar and Lara Tarakjian, reflected on the remarkable 12 years history of Silkor, their
successful hair removal company based in Beirut, the capital of Lebanon with branches
around the Middle East. Although Silkor had established itself as the brand leader in the
region, the duo felt that they had many challenges ahead of them. One main challenge was
related to growth. They wondered how they are going to leverage their strong brand while
expanding geographically and extending their product line. They also wondered how they
would expand without diluting their quality competitive advantage or the entrepreneurial
spirit which characterized Silkor’s culture. (Silkor.com, 2014)
2.2. Main Products & Services
Laser Treatments
Medical Services
Skin Care Therapy
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How To Position and Differentiate in the Market?
2.3. Vision & Mission
Vision: To establish Silkor as the trusted regional leader in high quality, technology-driven,
personalized laser medical and skin treatment.
Mission and Statement of Purpose: Silkor enhances the personal well-being, confidence
and self-esteem of its customers in a safe and professional environment.
Values: It is Silkor’s people who make Silkor what it is and who believe that putting the
company values into practice creates long-term benefits for all stakeholders. Silkor values
include:
• Customer service excellence
• Teamwork in a Silkor family environment
• Entrepreneurial spirit and a passion to win
• Constant innovation in high-end services
• Excellence in operational execution
Slogan: "Baby skin forever"(Silkor.com, 2014)
2.4-Innovation:
Scientific and technological innovations in laser medico-aesthetic treatments are advancing at
the speed of light.
With a dedicated medical advisory team charged with exploring new Technologies, Silkor
continuously evaluates new therapies, equipment and procedures to ensure Best results ‘and
value for its clients.
Thanks to Silkor's size and reputation and its relationships with manufacturers and researchers,
its team is in a position to evaluate new laser medico-aesthetic technologies even before they
come on the market. This puts Silkor in a prime position to stay ahead of the field and provide
the best service and satisfaction for its customers. (Silkor.com, 2014)
2.5-Ambiance:
Silkor centers are the company's trademark. Each occupying approximately 600 square meters,
with an average of 17 treatment rooms and clinics, they are situated in prime locations and are
Characterized by a unique architecture and subtle design features.
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How To Position and Differentiate in the Market?
The soothing graduated colors utilized throughout the facility, along with its peaceful Zen
ambiance, create an oasis of calm for customers arriving at the centers. Management's attention
to detail, its response to customer needs, the successful integration of technical efficiency,
Medical safety and customer comfort make the Silkor experience safe and exhilarating.
(Silkor.com, 2014)
2.6-Innovation:
Scientific and technological innovations in laser medico-aesthetic treatments are advancing at
the Speed of light.
With a dedicated medical advisory team charged with exploring new Technologies, Silkor
continuously evaluates new therapies, equipment and procedures to ensure Best results’ and
value for its clients. Thanks to Silkor's size and reputation and its relationships with
manufacturers and researchers, its team is in a position to evaluate new laser medico-aesthetic
technologies even before they come on the market. This puts Silkor in a prime position to stay
ahead of the field and provide the best service and satisfaction for its customers. (Silkor.com,
2014)
2.7-The overall market:
In 1997 the laser hair removal market size was 2$ million. In 2009 the market was
estimated to be 54 $ million and growing at 15 % per year. Between the mid 90's and 2009
the Lebanese hair removal has grown. Growth than slowed and the market become saturated ,
because the competitors has proliferated and in 2009 , many procedures were available ,
anyone could rent a hair removal machine even in their own home which increase the
ineffective treatments , making facility track record , staff and customer service more critical.
In the other hand location has become more important for customers, as the number of
facilities has mushroomed. Customers were not willing to travel to other are of the town.
In order to differentiate Silkor were open from 9 am to 8 pm. Peak hours were in the evening
not many other facilities stayed opened late as Silkor.
In Lebanon, it has been very difficult for leading hair removal industry players to grow their
businesses successfully by opening in multiple locations. According to Oscar Tarakjian:
"Very few operators have been able to successfully expand beyond the first facility.
Most operators in Lebanon who open a second facility typically hand it over to a daughter or
niece, and end up failing shortly after opening. Even very good single unit operators can’t
manage multiple units because they don’t have trained personnel to provide consistent
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How To Position and Differentiate in the Market?
service, systems in place to control the operations and minimize ‘leakage’ in this cash
business, [unlike the U.S., in Lebanon and the Gulf most customers paid by cash] or the
financial or marketing abilities to compete with existing brands like Silkor". (Silkor.com,
2014)
2.8-Marketing strategy:
From the Silkor early days, billboards and advertising and PR on TV have played a major
role in increasing sales.
billboards remained were an important role in Silkor advertising strategy , Lara explained
"Billboards are there to give comfort to , and reinforce buying decisions of existing
customers, as well as to dissuade new entrants and competitors from head to head
competition".
Lara emphasized the importance of personal references: “Everyone knows us and has seen
our ads, so it’s not like they do a web search and come to us. The Lebanese tend to ask at
least 10 friends and relatives when they want to try something new. In the UAE, it’s different:
people rely more heavily on the web. Since so many people there are foreigners, the web is
their ‘friend and relative.’ (Silkor.com, 2014)
2.9-Pricing:
Silkor prices are the highest in the Lebanese market, although they have not risen
Prices since they started in 1997. The average price per session of laser hair removal
Treatment in Lebanon is $200. The average number of sessions per person is three to five.
Hair removal treatment prices for different body parts are shown below:
• Facial hair $700 to $1,000
• Underarms $500
• Bikini line $750
• Back hair $2,500
• Full legs $4,000
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How To Position and Differentiate in the Market?
CHAPTER 2: LITERATURE REVIEW
In this chapter an introduction of relevant theories for the purpose of the study will take
Place.
Introduction of Chapter
Markets have become highly competitive and turbulent and are constantly changing,
Market conditions move from being simple to complex, from stable to dynamic, and
From tame to hostile (Neu and Brown, 2005). In response to changing market
Conditions, service markets have become more differentiated and innovative.
In order to fill this research, we should first understand the concept and the meaning of
service, from that point Kotler and Keller define service as "An act or performance one party
can offer to another that essentially intangible and does not result in the ownership of
anything.”(Kotler and Keller 2012, pp.356).
Furthermore Kotler explains that service is“…any activity or benefit that one party can offer
to another which is essentially intangible and does not result in the ownership of anything. Its
production may or May not be tied to a physical product.” (Kotler, 1996).
Lovelock and Wirtz give a detailed description that, “Services are economic activities
Offered from one party to another, it employs times based-performance to bring desired
results to recipients for which purchasers have responsibilities. In exchange For money, time,
and effort, services customers expect value from access to goods, Labor, professional skills,
facilities, network and systems. (Lovelock& Wirtz 2010 pp.15)
Figure 2.1: The four categories of services.
Source: Lovelock& Wirtz 2010 P.19
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How To Position and Differentiate in the Market?
Kotler and Keller have also introduced 4 characteristics for services:
1-Intangibility: services cannot be seen, tasted, felt, heard, or smelled before they are bought.
2-Inseparability: services are typically produced and consumed simultaneously.
3-Variability: services are highly variable because its quality depends on who provides them,
when and where, and to whom.
4-Perishability: services cannot be stored.
(Kotler& Keller 2011)
With few exceptions, the general approach for studying a service is totally different From
product market, and due to the Rapid changes in the market conditions, company are trying to
position themselves in a way that differentiate them from competition, and allow the firm to
achieve long-Term Growth, customer loyalty, satisfaction and innovativeness.
So what is positioning? And how can we define it? Kotler say that positioning is the Act of
designing a company offering and image to occupy a distinctive place in the Minds of the
target market. (Kotler1997)
Figure 2.2: Brand positioning.
Source: Kotler &Keller 2011, p.280.
G
F
E D
CB
Brand APrice
Quality
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How To Position and Differentiate in the Market?
Levitt introduced that Positioning is the result of differentiation decisions. It is the act of
designing the Company's offering and identity (that will create a planned image) so that they
occupy a meaningful and distinct competitive position in the target Customer's minds. (Levitt
1980, p.130).
The Ad agency Innis maggiore define Positioning as the process by which a brand (a
Product or service) is marketed with the goal of owning a meaningful and differentiated idea
in the mind of the target market. Innis maggiore Ad agency (2014)
Arnott also said that positioning is the deliberate, proactive, iterative process of
Defining, measuring, modifying and monitoring consumer perceptions of a marketable
object…"(Arnott 1993).
Another definition for Positioning” or “position” refers to a company’s or products Perceived
or desired status in a chosen market space, whether consciously chosen, Crafted, and created,
or not. (Hale marketing communication (2008)).
As a result the main objective of positioning is to allow in-depth exploration of mechanisms
related to how well the company products and Services are perceived by customers, and how
the firm can achieve a competitive advantage over the competition.
Recently, the competition cutting into the firm marketplace is affecting the company
position, so according to the basic principles of marketing, in order for the company to
achieve an effective position, the position should be:
Meaningful to consumers.
Credible/believable.
Unique to your brand.
Durable over time.
Hitesh Bhasin (2012) suggested that Products and services are created to solve Customer
“problems” (to satisfy needs and Wants) and provide benefits.
So for effective positioning, a service must meet the benefit the customer will receive, create
the expectation, and it offers a solution to the customer’s problem. If at All possible, the
solution should be different from and better than the competition solution, especially if the
competitors are already offering a similar solution.
Positioning should be a single-minded concept, an umbrella from which everything in the
organization flows.
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How To Position and Differentiate in the Market?
Effective Positioning also affects policies and procedures, employee attitudes, Customer
relations, complaint handling, and the myriad of other details that combine to make a
different experience. Services companies compete on more than just image, differentiation
and benefits offered, there must be a consistency among the various Offerings and it is the
positioning statement that guides this consistency. There are two tests of effective
positioning:
First, the position must be believable in the customers mind.
Second, the service must deliver that promise on a consistent basis.
Hitesh Bhasin also suggested that even when the principles of positioning are understood,
there are a variety of Impediments to their successful implementation. At times, effective
positioning is undermined by the poor selection of benefits to feature in advertising.
In other Instances, advertising are compromised by the failure to sustain a brand position. .
Once a position is developed, most of the activity is directed toward sustaining it in a
contemporary way. (Hitesh Bhasin, 2012).
From lovelock and Wirtz point of view when competition increases in the service market, it is
more important for the service Companies to differentiate in a ways that are meaningful for
customers. In order for a firm to grow, it has to take share from its competitors, or to expand
into new markets. (Lovelock& Wirtz 2010 p.61)
In developing an effective positioning strategy a position must link both market analysis and
competitive analysis to internal corporate analysis?
The market analysis focus on the overall level of demand and geographic location of
Demand, and look into the size of different market segments, plus it understand customer
needs and how they perceive competition.
The competitor analysis understands competitor’s strength and weaknesses and anticipates
responses to the positioning strategies.
The internal corporate analysis identify the organization resources, goals and values,
Plus it selects limited number of target segments to serve. (Lovelock&Wirtz 2010 p.70).
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How To Position and Differentiate in the Market?
Figure 2.3: Effective positioning strategies.
Source: Lovelock& Wirtz 2010, p.71.
Furthermore Kotler and Keller said that positioning requires that marketers define and
communicate similarities and differences between their brand and its competitors:
1. Determine a frame of reference by identifying the target market and relevant
competition.
2. Identify the optimal points of parity and points of difference brand associations given
that frame of reference
3. Create a brand mantra to summarize the positioning and essence of the brand
(Kotler& Keller 2011, p 280)
In the Principles of positioning strategies, Jack trout suggested that after segmenting the
market, and understanding the attributes of services level, the next step is determining the
best position of a service in the market. The competitive positioning strategy is based on
establishing a distinctive place in the market.
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How To Position and Differentiate in the Market?
The essence of positioning fall into four major principles:
1- A company must establish a position in the mind of target customer.
2- The position must be singular, and provide one simple and consistent message.
3- The position must set a company apart from competition.
4- A company cannot be all things to all people; it must focus its effort.
Understanding the principles of positioning is the key of developing an effective competitive
image. (Jack trout, cited in Lovelock&Wirtz 2010, p 68.)
Figure 2.4: Principles of positioning.
Source: Lovelock& Wirtz, 2010, p.69.
We can see from this figure that the principles of positioning fall under the changes that can
make the company better than competitors, how the services/products are differentiated from
competition, and how the firm stands in the mind of customers.
The position must be well perceived by customers, and must satisfy their needs, but for many
years' companies have done a lot of mistakes and errors to achieve these objectives.
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How To Position and Differentiate in the Market?
Positioning errors, according to Philip Kotler fall into four categories:
1. under positioning: Market only has a vague idea of the product.
2. Over positioning: Only a narrow group of customers identify with the product.
3. Confused positioning: Buyers have a confused image of the product as it claims too many
benefits or it changes the claim too often.
4. Doubtful positioning: Buyers find it difficult to believe the brand’s claims in view of the
product’s features, price, or manufacturer. (Kotler, 1997).
Kotler also introduced six strategies for positioning, by which a company can categorize its
position.
1. Attribute positioning: The message highlights one or two of the attributes.
2. Benefit positioning: The message highlights one or two of the benefits to the customer.
3. Use/application positioning: Claim best for some application.
4. User positioning: Claim the best for a group of users. (Children, women, working
women…)
5. Competitor positioning: Claim that the service/product is better than a competitor.
6. Quality/Price positioning: Claim best value for price. (Kotler, 1997).
The main objective of this research is to examine the fifth categories of positioning, the
competitor positioning, claiming that services and products are better than competitors,
furthermore to identify the quality and price positioning where the company can claim the
best value for price.
Hitesh Bhasin proposed that companies today apply various positioning techniques in market
so that they are Always Ahead in competition.
Some of the techniques used for positioning are, first the perceptual mapping a technique to
represent what people think about products or services.
It is a spatial representation of the perceptions about the brands on the parts of different
individuals.
If you perceive the brands to be similar then you are getting them closer in the perceptual
space, and if you perceive them to be dissimilar then you are putting them apart. In short,
that represents both brands and people.
When the environment is turbulent it changes fast and calls for frequent changes in
positioning.
At times a company can lose its position due to change in technology, consumer attitudes,
and competitive activity both in the economy and amongst creative executives.
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How To Position and Differentiate in the Market?
That is the reason why a company should be in Touch with the market place, and Reposition
itself before it suffers in terms of image and revenue. (Bhasin, 2013) Perceptual maps are
normally used for two purposes:
To identify unknown dimensions that affect customer behavior
To comparatively evaluate competing brands when dimensions are unknown
. (Hitesh Bhasin, 2013).
Figure 2.5: Perceptual map.
Source: ICS, 2012.
The second techniques used is Positioning to specific segments; which involves Sacrifice a
few segments of the market. We cannot afford to give ‘all things to all people.’ Positioning is
to decide who our Competitors are. Then there is a need to develop a Core strategy that runs
as a common Thread through all pieces of planning.
Core strategy basically tells us why customers buy our product and how we shall compete
with others. Different segments need Different core strategies. Core strategy is broader than
USP because it considers both External and internal factors. (Hitesh Bhasin, 2013)
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How To Position and Differentiate in the Market?
After these two techniques the company has to communicate, Communication helps the
marketer to builds up an image of the business.
Image build up is influenced by the effectiveness of the Communication than by the
communication budget. Most of the organization creates Value through this offer.
When discussing about the total marketing budget it is spent on advertising, sales
promotion, sales management and distribution acts basically to enhance the value created by
the offer, and accordingly they delivers the same value to the customer. These are in fact
marketing support activities. By this they are trying to market the offer in an attractive
manner to their marketing intermediaries and customer.
All of us know that a products/service has attributes and features. But these must be related
to Perceived benefits preferences and selection. (Bhasin, 2013)
Philip Kotler said also in the communication process that once the company has developed a
clear positioning Strategy, the company must choose various signs and cues that buyers use
to confirm that the product delivers the Promise made by the company. (Kotler, 1997).
Positioning is not a simple matter, at time a company can lose its position due to the
competitive activity, so in the process of positioning a firm should first identify its
competitor's .This Step is not as simple as it seems to be. Basically there are two types of
competitors:
-Primary competitors belonging to the same product class
-Secondary competitors, those belonging to other category.
Second a firm must determine how the Competitors are Perceived and Evaluated, when the
competitors' services are used by the customers. An appropriate set of Service attributes
should be chosen. (Bhasin, 2013)
The third process for positioning is determining the competitor’s positions by determining
how different brands (including own brand) are positioned with respect to the relevant
attributes selected under the previous step.
At this point it should be clear about what is the image that the customer has about the various brands?
How they are positioned in respect to each other?
Which competitors are perceived as similar and which as different? (Hitesh Bhasin,2013)
Fourth, a company should Analyzing the Customer's habits and behavior in a particular
market Segment.
27
How To Position and Differentiate in the Market?
The following questions need attention while understanding the customer and the market:
How is market segmented? What role does the service play in the customer's life style? What really motivates the customers? And what habits and behavior patterns are relevant?
The segmentation question is critical. There are various approaches to segmentation but
out of all benefit segmentation is relevant here, which focuses upon the benefits or attributes
that a segment believes to be important. In order to specify that benefit segments, it is useful
to highlight the role of ‘ideal object’ as a tool. (Hitesh Bhasin, 2013)
The above four steps provide a useful backgrounds and are necessary to be conducted
before taking any decision about positioning.
After these four exercises, the following guidelines can be offered to reach a positioning
decision:
An economic analysis should guide the decision.
Positioning usually implies a segmentation commitment.
If the advertising is working, the advertiser should stick to it.
Do not try to be something, you are not.
In making a decision on position strategy, symbols or set of symbols must be
considered. (Hitesh Bhasin,2013)
Finally, an image objective, like an advertising objective should be measurable. It is
necessary to monitor the position overtime, for that a variety of techniques that can be
employed it can be on the basis of some test and interviews which will help to monitor any
kind of change in the image.
Thus, the first four steps in the positioning process provide a useful background.
The fifth one only is taken to make the position decision. The final step is to evaluate and
measure and follow up. (Bhasin 2013).
While every company’s situation is unique, we know from long experience that there are
common criteria for a company’s success in reaching and winning a market.
Positioning strategy, by its very nature, involves your value relative to your competition.
What do you do or offer that’s better (or not as competitive) as others who offer similar
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How To Position and Differentiate in the Market?
products and services? When these differences are identified, supported with proof points,
and properly merchandised your prospects will have an accurate and compelling basis to
compare your company to others.
However, there is always more to understanding your offerings that defining them in light of
competitive offers.
Companies can easily make the mistake of “over positioning” their products and services.
As there are three dimensions to establishing value propositions – what it is you do, why it’s
relevant and how it’s different–How to position and differentiate companies, marketers and
sales teams can spend too much attention on differentiations before assuring the first two
dimensions are understood. Your customers are typically most interested in getting their
problems solved. If it’s not clear how you’re going to do that, comparing yourself to your
competition (even subtly) won’t matter.
Now in comparing yourself to your competition, you have to map the development and the
movement of the competition overtime.
A useful technique to do that, is through the position map, an effective tool to visualize
competitive positioning and map the development overtime.
It is also a useful way to represent consumer perception of alternative products, the
information about a product/service can be obtained from market data, derived from ratings
by representative consumers. (Lovelock & Wirtz 2010, p.73)
On a ‘positioning map’, products and services are mapped together which allows them to be
compared and contrasted in relation to Each other.
This is the main strength of this tool. Marketers decide upon a competitive position, which
enables them to distinguish their own products from the offerings of their competition.
The marketer would draw out the map and decide upon a label for each axis. They could be
price (variable one) and quality (variable two), or Comfort (variable one) and price (variable
two). The individual products are then mapped out next to each other any gaps could be
regarded as possible areas for new products. (marketing91, 2013)
Figure 2.6: Position map
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How To Position and Differentiate in the Market?
Source: Ling's cars, 2007.
As discussed earlier, the existing research looks closely, about how a service company can
position itself against the competition.
With times a company can lose its position due to change in technology, consumer attitudes,
and competitive activity both in the economy and amongst creative executives.
That is the reason why a company should be in Touch with the market place, and reposition
itself before it suffers in terms of image and revenue.
In repositioning firm may have to make change in existing position, such as:
Revising service characteristics.
Redefining target market segments.
Abandoning certain products.
Withdrawing from certain market segments.
In improving negative brand perceptions, the company should redesign the core product.
Repositioning introduces new dimensions into positioning equation that other firms cannot
immediately match. (Lovelock & Wirtz 2010 p.75).
Repositioning is the process of creating a new or modified brand, company, or product
position. (Kotler 2009).
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How To Position and Differentiate in the Market?
The rationale behind the present study is the challenges that a firm could face in trying to
position themselves against the competition, in the other hand more difficulties are facing
Service Company, because positioning a service is much harder than positioning a product,
and as discussed earlier service characteristics are totally different from the manufacturing
products.
For many years the dichotomy between service and physical goods still remains.
The growing acceptance is that there are several overlaps between services and products
(Levitt, 1981), has over the years prompted concern about the issue of varying positioning
strategies for services (Rathmell, 1974; Arnott& Easingwood, 1994).
It is important to know that although the concept of positioning is equally pertinent to both
products and services (Cowell, 1989), the latter possess characteristics such as intangibility,
inseparability, perishability, heterogeneity (Bateson, 1995) and non-Standardization (Berry,
1983) which make positioning of services more difficult and challenging than positioning
physical goods (Ennew et al., 1993).
This assertion is evidence in the work of Assael (1985) who states that:
“…Positioning a service is more difficult than positioning a product because of the need to
communicate vague and intangible benefits.”
The above is supported by de Chematony and dall'Olmo Riley (1997), who claims that
Service brands are particularly different, in that they rely on employee’s actions and attitudes.
Given that employee’s actions and attitudes are stochastic, and that service characteristics are
different from those of physical goods (Bitner, 1997), it can be inferred that it is more
challenging to embark on positioning strategies in services.
The foregoing is evidence in an earlier work by Lamb and Cravens (1990), who claimed that:
…services marketing differ from goods marketing because services pose different
Marketing problems and opportunities from those faced by goods marketers…
"As positioning means different things to different people, the various terminologies
Are still “several sides of the same coin?” (Arnot 1994).
Most scholars agree that it is more difficult to position services.
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How To Position and Differentiate in the Market?
They also support the idea of “tangibilizing different aspects of a company service to achieve
positioning.
Services require different positioning strategies and tactics from physical goods.
These different positioning strategies for services are based upon 3 qualities.
• Search
• Experience
• Credence
Search Qualities are known as:
Features that consumers can identify before purchasing a product, like:
• Color
• Style
• Price
• Smell
Experience qualities are known as:
Features that can only be understood after purchase or during consumption, like:
• Taste
• Wear ability
• Satisfaction
Credence qualities are known as:
Features that the consumer may find difficult to evaluate even after purchase or consumption.
• Open heart operation
• Brain surgery
• Appendix operation.
It is stated that marketers find difficulties trying to interpret services since they can be
positioned on a variety of dimensions.
Such as:
• Needs they satisfy?
• Benefits delivered
• Specific features
• Time of use
• Who uses it?I
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How To Position and Differentiate in the Market?
“Services are relatively intangible, produced and consumed simultaneously, and often less
standardized than goods. These unique characteristics of services will therefore present
special challenges for services positioning.” Berry (1980)
To try to overcome these special challenges that services provide; it has shown that services
advertisements often contain more:
• Emotional appeal
• Personalized headlines
• Symbolic representation
"Service marketers must have a good understanding of their special competitive situation to
Source: The data collected was for this study, Innovation importance N = 100
According to the majority of the respondents, Silkor services are worse than other clinics
services.
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How To Position and Differentiate in the Market?
Table 4.35:
ycneuqerF tnecreP tnecreP dilaV CumulativePercent
ton ylbaborP 51 51 1.32 1.32
ylbaborP 31 31 02 1.34
ton yletinifeD 31 31 02 1.36
yletinifeD 21 21 5.81 5.18
Might ormight not
21 21 5.81 001
latoT 56 56 001
gnissiM metsyS 53 53
001 001
rehto ot rokliS dnemmocer uoy dluow ylekil woH ?
dilaV
latoT
Source: The data collected was for this study, Recommendations N = 100
Many of customers are not willing to recommend Silkor to others, due to many reasons; some
have claimed that price is the reason, other due to promotion, advertising, quality and
innovation.
Table 4.36:
ycneuqerF tnecreP tnecreP dilaV CumulativePercent
ton ylbaborP 71 71 2.62 2.62
yletinifeD 51 51 1.32 2.94
ylbaborP 21 21 5.81 7.76
Might ormight not
21 21 5.81 2.68
ton yletinifeD 9 9 8.31 001
latoT 56 56 001
gnissiM metsyS 53 53
001 001
dilaV
latoT
secivres rokliS esuer uoy dluow ylekil woH ?
Source: The data collected was for this study, Reuse services N = 100
17 customers are probably not willing to use Silkor services again, 15 are willing to stay at
Silkor, 12 are not sure, and 9 are definitely leaving the company. After analyzing the results,
a cross tabulation is being used in order to show differences in demographics.
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How To Position and Differentiate in the Market?
Summary of the results:
As we can see clearly from the tables above, most of the chosen respondents are females
young, married, and have a high level of education, and with average income between 1000-
2000$.
Most of the respondents have known about Silkor through advertising, and they consider the
price, innovation and quality to be very important factor that affect their choices concerning
the treatments.
They also consider the promotion to be important.
When asking Silkor customers about their overall satisfaction with the company, most said
that they are dissatisfied, and they rank the following factors to be:
- Quality: Dissatisfied.
- Customer service: Neutral.
- Price: Dissatisfied.
- Innovation: Neutral.
- Promotions and advertising: Neutral.
They ranked the overall results of each treatment to have a middle value results. Most of
them declared that they consider Silkor services to have a very high prices, and they
would think of leaving the company if found any other clinics with lower prices. Extra
service is the most attractive promotion offer to customers, and the TV is the most
influence factors in the media. Even though the advertisement of Silkor 'Do not attract
customers, so at the end most of them will probably not recommend Silkor customers to
others, and they will probably not also reuse their services.
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How To Position and Differentiate in the Market?
B-Cross tabulation:
Cross tabulation is a statistical process that summarizes categorical data to create a
contingency table. They are heavily used in survey research, business intelligence,
Engineering and scientific research.
Cross tabulation is one of the most frequently used methods of analysis for questionnaire
data. It enables us to examine the relationship between categorical variables in greater detail
than simple frequencies for individual variables.
In this chapter we will see how SPSS analyze the data associated with cross-Tabulation.
The cross-tab begins with the demographic data (the monthly income).
Table 4.37:Monthly Income cross tab with * According to your experience, how would you rate Silkor Prices? Cross tabulation.
According to your experience, how would you rate Silkor Prices?
TotalFair High Very high Low
Monthly Income 800 Count 0 0 1 0 1
% within Monthly Income
.0% .0% 100.0% .0% 100.0%
% within According to your experience, how would you rate Silkor Prices?
.0% .0% 5.0% .0% 1.5%
% of Total .0% .0% 1.5% .0% 1.5%
900 Count 0 1 0 0 1
% within Monthly Income
.0% 100.0% .0% .0% 100.0%
% within According to your experience, how would you rate Silkor Prices?
.0% 2.9% .0% .0% 1.5%
% of Total .0% 1.5% .0% .0% 1.5%
1000 Count 0 7 11 0 18
% within Monthly Income
.0% 38.9% 61.1% .0% 100.0%
% within According to your experience, how would you rate Silkor Prices?
.0% 20.6% 55.0% .0% 27.7%
% of Total .0% 10.8% 16.9% .0% 27.7%
1200 Count 0 5 2 0 7
% within Monthly Income
.0% 71.4% 28.6% .0% 100.0%
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How To Position and Differentiate in the Market?
% within According to your experience, how would you rate Silkor Prices?
.0% 14.7% 10.0% .0% 10.8%
% of Total .0% 7.7% 3.1% .0% 10.8%
1300 Count 0 0 3 0 3
% within Monthly Income
.0% .0% 100.0% .0% 100.0%
% within According to your experience, how would you rate Silkor Prices?
.0% .0% 15.0% .0% 4.6%
% of Total .0% .0% 4.6% .0% 4.6%
1400 Count 0 1 1 0 2
% within Monthly Income
.0% 50.0% 50.0% .0% 100.0%
% within According to your experience, how would you rate Silkor Prices?
.0% 2.9% 5.0% .0% 3.1%
% of Total .0% 1.5% 1.5% .0% 3.1%
1500 Count 0 7 1 0 8
% within Monthly Income
.0% 87.5% 12.5% .0% 100.0%
% within According to your experience, how would you rate Silkor Prices?
.0% 20.6% 5.0% .0% 12.3%
% of Total .0% 10.8% 1.5% .0% 12.3%
1600 Count 0 2 0 0 2
% within Monthly Income
.0% 100.0% .0% .0% 100.0%
% within According to your experience , how would you rate Silkor Prices?
.0% 5.9% .0% .0% 3.1%
% of Total .0% 3.1% .0% .0% 3.1%
1800 Count 0 1 1 0 2
% within Monthly Income
.0% 50.0% 50.0% .0% 100.0%
% within According to your experience , how would you rate Silkor Prices?
.0% 2.9% 5.0% .0% 3.1%
% of Total .0% 1.5% 1.5% .0% 3.1%
2000 Count 0 8 0 0 8
% within Monthly Income
.0% 100.0% .0% .0% 100.0%
% within According to your experience, how would you rate Silkor Prices?
.0% 23.5% .0% .0% 12.3%
% of Total .0% 12.3% .0% .0% 12.3%
2200 Count 0 1 0 0 1
% within Monthly Income
.0% 100.0% .0% .0% 100.0%
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How To Position and Differentiate in the Market?
% within According to your experience, how would you rate Silkor Prices?
.0% 2.9% .0% .0% 1.5%
% of Total .0% 1.5% .0% .0% 1.5%
2500 Count 0 1 0 0 1
% within Monthly Income
.0% 100.0% .0% .0% 100.0%
% within According to your experience, how would you rate Silkor Prices?
.0% 2.9% .0% .0% 1.5%
% of Total .0% 1.5% .0% .0% 1.5%
3000 Count 4 0 0 0 4
% within Monthly Income
100.0% .0% .0% .0% 100.0%
% within According to your experience , how would you rate Silkor Prices?
40.0% .0% .0% .0% 6.2%
% of Total 6.2% .0% .0% .0% 6.2%
3500 Count 1 0 0 0 1
% within Monthly Income
100.0% .0% .0% .0% 100.0%
% within According to your experience , how would you rate Silkor Prices?
10.0% .0% .0% .0% 1.5%
% of Total 1.5% .0% .0% .0% 1.5%
3600 Count 2 0 0 0 2
% within Monthly Income
100.0% .0% .0% .0% 100.0%
% within According to your experience , how would you rate Silkor Prices?
20.0% .0% .0% .0% 3.1%
% of Total 3.1% .0% .0% .0% 3.1%
3800 Count 1 0 0 0 1
% within Monthly Income
100.0% .0% .0% .0% 100.0%
% within According to your experience, how would you rate Silkor Prices?
10.0% .0% .0% .0% 1.5%
% of Total 1.5% .0% .0% .0% 1.5%
4100 Count 1 0 0 0 1
% within Monthly Income
100.0% .0% .0% .0% 100.0%
% within According to your experience , how would you rate Silkor Prices?
10.0% .0% .0% .0% 1.5%
% of Total 1.5% .0% .0% .0% 1.5%
4500 Count 1 0 0 0 1
% within Monthly Income
100.0% .0% .0% .0% 100.0%
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How To Position and Differentiate in the Market?
% within According to your experience , how would you rate Silkor Prices?
10.0% .0% .0% .0% 1.5%
% of Total 1.5% .0% .0% .0% 1.5%
5000 Count 0 0 0 1 1
% within Monthly Income
.0% .0% .0% 100.0% 100.0%
% within According to your experience, how would you rate Silkor Prices?
.0% .0% .0% 100.0% 1.5%
% of Total .0% .0% .0% 1.5% 1.5%
Total Count10 34 20 1 65
% within Monthly Income
15.4% 52.3% 30.8% 1.5% 100.0%
% within According to your experience, how would you rate Silkor Prices?
100.0% 100.0% 100.0% 100.0% 100.0%
% of Total 15.4% 52.3% 30.8% 1.5% 100.0%
Source: The data collected from SPSS (cross tabulation) N=100
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How To Position and Differentiate in the Market?
Figure 4.1: bar chart for cross tabulation source SPSS.
This bar chart shows exactly that most commonly the customers who have an average income
(1000-2000) said that:
Silkor prices are high to very high, and a small number of people who have a monthly income
between (2000-4500) Said that the prices are fair, and very few who have an income above
4500 said that it is low.
Which make sense, because who have a high income, even if the services prices? are high, it
would be fair for them.
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How To Position and Differentiate in the Market? 94Table 4.38: Table Monthly Income cross tab with * How satisfied are you with the following Factors? ( price) Cross tabulation.
How satisfied are you with the following Factors? ( price)