SERVICE POSITIONING AND DESIGN

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• SERVICE POSITIONING AND DESIGN

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LEARNING OBJECTIVES

• AFTER READING THIS CHAPTER, YOU SHOULD BE ABLE
  TO
• DESCRIBE THE FOUR DIFFERENT FOCUS APPROACHES
• EXPLAIN THE ELEMENTS OF SERVICE STRATEGY
• DEFINE THE CONCEPTS OF COMPETITIVE POSITIONING
  AND REPOSITIONING
• USE PERCEPTUAL MAPS TO SHOW A COMPANYS
  COMPETITIVE POSITION
• DISCUSS SIX CATEGORIES OF NEW SERVICES AND
  PROVIDE EXAMPLES OF EACH

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THE NEED FOR FOCUS

• COMPETITION IS INTENSIFYING
• CULTIVATING AND COMMUNICATING MEANINGFUL
  DIFFERENCES IS INCREASING IMPORTANT FOR LONG-TERM
  PROFITABILITY
• COMPETIVIVE STRATEGIES CAN TAKE DIFFERENT ROUTES,
  OR MAY REQUIRE DIFFERENT FOCUSES
• FOCUS IS DEFINED AS
• THE PROVISION OF A RELATIVELY NARROW PRODUCT MIX
  FOR A PARTICULAR MARKET SEGMENT

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FOUR FOCUS STRATEGIES
Breadth of Service Offerings Narrow
Wide
Number of Markets Served
Service Focused
Unfocused
Many
Fully Focused (Service and Market Focused)
Market Focused
Few
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DEFINING A SERVICE STRATEGY
Determine the most important service attributes
for meeting and exceeding customers expectations.
Determine the important service attributes on
which competitors are most vulnerable.
Determine existing and potential service
capabilities of our company. Assess service
competencies and incompetence's, resource
strengths and weaknesses, service reputation,
belief system, and reason for being.
Develop a service strategy that addresses
important, enduring customer needs, exploits
competitor vulnerabilities, and fits our
companys capabilities and potential.
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Service positioning

• Positioning involves establishing a distinctive
  place in the minds of customers relative to
  competing products

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Trout's Four Principles of Positioning
A company must establish a position in the minds
of its targeted customers
The position should be singular, providing one
simple and consistent message
The position must set a company apart from its
competitors
A company cannot be all things to all people-- it
must focus its effort
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Key Consideration for Positioning Strategies

• Consumer Related factors --
• purpose of using the service
• who makes the decision
• timing of use
• used by an individual or with/in a group
• groups composition.
• Importance versus determinance
• Copy versus product/service positioning
• Anticipated competitive response.
• Evolution of position.

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Some Key questions determining Positioning
Strategies

• What does our firm stand for in Consumers mind?
• What customers do we now serve?
• Whom would we like to serve in future?
• What are the characteristics (core and
  supplementary elements) of our current offering?
• How do we differ from our competition?
• As per consumer perception, how do our offerings
  meet their needs?
• What changes do we need to make to our offering
  to further strengthen our competitive position?

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Types of Positioning Strategies

• Attributes -- Burger Kings Have it Your Way
• Price/Quality -- Supercuts provides good haircuts
  at reasonable price
• Competitors -- Youd better take your VISA card,
  because they dont take American Express
• Usage Occasions -- Ski resorts offer downhill and
  cross-country skiing in the winter, and mountain
  biking in the summer.
• User -- Travelocitys online ticketing service is
  for technologically savvy travelers
• Product Class -- Leasing a car long-term rather
  than purchasing

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Service Repositioning

• Repositioning involves changing the position a
  firm holds in a consumers mind relative to
  competing services
• Principle Uses of Positioning in Marketing
  Management
• A diagnostic tool for defining and understanding
  the relationships between product and markets
• Identify market opportunities
• Introducing new products
• Redesigning(repositioning) existing products
• Eliminate products that dont satisfy customers
  needs or face excessive competition
• Making other marketing mix decisions to preempt,
  or respond to, competitive moves
• Distribution Strategies
• Pricing Strategies
• Communication Strategies

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Some key tasks for positioning strategy

• Market analysis - Size, location, trend
• Internal Corporate analysis - financial, labor,
  know-how etc.
• Competitive analysis - reaction anticipated etc.

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Perceptual Maps As Positioning Tools

• help identify most critical attributes of
  competing services from the customers
  perspective.
• Provide a visual picture of a services unique
  characteristics
• Identify the nature of competitive threats and
  opportunities
• highlight gaps between customer and management
  perceptions about competing services.
• Common attributes include
• Price, Quality, Type or Frequency of Use, Unique
  Benefits of the service.
• Usually two-dimensional models -- can be three
  dimensional or can comprise of a series of two
  dimensional charts
• Separate maps need to be drawn for different
  market segments

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Examples of Using Perceptual Maps to Evaluate
Positioning Strategies

• Bellevilles Principal Business Hotels
  Positioning Map of Service VS Price Level

Expensive
Grand
grand
Regency
Regency
Palace
Shangri-La
Moderate Service
High Service
Atlantic
Sheraton
Castle
Italia
Alexander IV
Less Expensive
Airport Plaza
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Examples of Using Perceptual Maps to Evaluate
Positioning Strategies

• Bellevilles Principal Business Hotels
  Positioning Map Location VS Physical Luxuries

High Luxury
Regency
Grand
Shangri-La
Sheraton
Palace
Shopping Center and Convention Center
Financial District
Inner Suburbs
Alexander IV
Castle
Air port Plaza
Atlantic
Moderate Luxury
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Examples Continued

• Bellevilles Principal Business Hotels Following
  New Construction, Service VS. Price Level

Mandann
New Grand
Heritage
Expensive
Marriott
New Continental
Palace
Shangri-La
Regency
Moderate Service
High Service
Atlantic
Sheraton
Castle
Italia
Alexander IV
Less Expensive
Airport Plaza
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Examples Continued

• Bellevilles Principal Business HotelsAfter New
  Construction Positioning Map Location VS Physical
  Luxury

Deluxe
Mandann
Heritage
Regency
Marriott
Continental
New Grand
Shangri-La
Grand
Action?
Sheraton
Palace
Shopping Center and Convention Center
No action?
Financial District
Inner Suburbs
Italia
Castle
Alexander IV
Air port Plaza
Atlantic
Basic
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New Service Development
Major Innovations
Product Line Extensions
Product Improvements
Startup Business
Style Changes
New Products
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TECHNOGRAPHICS

• TECHNOGRAPHICS is a new segmentation variable.
• Reflects the customers willingness and ability
  to use the latest technology
• Companies are finding traditional segmentation
  variables are limited.
• Based on how people actually use technology in
  their homes, and work.
• Forester's ten TECHNOGRAPHICAL categories
  range from FAST FORWARDS to SIDELINED
  CITIZENS.

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HOW TECH CUSTOMERS STACK UP
LESS AFFLUENT
MORE AFFLUENT
CAREER
FAMILY
ENTERTAINMENT
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