Chapter 3

Positioning
services in
competitive
markets

STUDENT NOTES
Digital Image PowerPoint to accompany:

Slide 1
Learning objectives

3.1 Demonstrate the meaning of positioning strategy in a service

context
3.2 Identify strategies to achieve competitive advantage through the
four focus strategies
3.3 Identify and select target segments
3.4 Distinguish between important and determinant attributes
3.5 Develop an effective positioning strategy using market, internal
and competitor analysis
3.6 Demonstrate how positioning maps help to analyse and respond
to the dynamics of competitive positioning

Slide 2
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

To achieve this the company must analyse

Customers Offering Competitors

to create a positioning strategy

Slide 3
 Competitive strategythe need for focus

In marketing terms, focus means providing a relatively narrow

product mix for a particular market segmenta group of buyers who
share common characteristics, needs, purchasing behaviour or
consumption patterns.

Slide 4
Slide 5
 AAP Image/Crook Publicity

Air Asia clearly positions itself to compete on price (and

minimal service) in the leisure segment

Slide 6
Slide 7
 Defining and profiling market segments B2C

Demographic segmentation
consists of dividing the market into groups based on variables such
as age, gender, family size, family life cycle, income, occupation,
education, religion, race and nationality.

Geographic segmentation
calls for dividing the market into different geographical units such
as nations, regions, states, municipalities, cities or
neighbourhoods.

Psychographic segmentation
buyers are divided into different groups based on socioeconomic
status, lifestyle or personality characteristics.

Behavioural segmentation
divides buyers into groups based on their knowledge of the
product, their attitude towards it, the way they use it and their
responses to it.
Slide 8
 Defining and profiling market segments B2B

Industry type
Respective size
Location and strategic importance of different firms
The nature of the purchasing situation
Anticipated purchasing volume and requirements
The potential for reciprocal purchasing and alliances

Additional segmentation variables

Aesthetic tastes and preferences
Quality and value expectations
Special interests and requirements
Sociocultural differences

Slide 9
 Target market selection

Measurability - the degree to which size and purchasing power of

the segments can be measured.
Accessibility - the degree to which a market segment can be
reached and served.
Sustainability - the degree to which the segments are large or
profitable enough to service
Actionability - the degree to which an effective marketing program
can be designed for attracting and serving segments. Company
resource limitations figure prominently here.

Slide 10
 Understanding target market

What level of quality and performance is required for each attribute?

Are there significant differences between segments in the importance that
customers attach to different attributes?
How well do competing service products meet customer requirements?
Can a service be redesigned, provided in a different way, place or time so that
it meets customer needs more closely and is superior to competing offerings?

Slide 11
 Jeff Greenberg 3 of 6/Alamy

The Singapore Girl in the traditional sarong has over the years become a symbol of the
excellent service quality which has become a hallmark of the Singapore Airlines brand
identity
Slide 12
 Important versus determinant attributes

Importance attributes:
- are met by all competing service providers
- do not necessarily sway the purchase decision in favour of one
service provider as opposed to another

Determinant attributes:
- are those that actually determine buyers choices
- are the attributes by which customers see significant and
compelling

Slide 13
Important versus determinant attributes

Determinant attributes
airlines industry

Food and beverage service on

aircraft
Flight schedules
Punctuality
Nature of ground facilities
Support services
Courtesy of reservations
personnel

Slide 14
Important versus determinant attributes

Most travellers rank safety as

no. 1 consideration in air
travel

Most major airlines are

perceived as equally safe so
although it is important it is
not usually an attribute that
influences consumer choice
between several large
carriers.

Importance attributes are Slide 15

Understanding the concept of positioning
Current and prospective customers
Who do we now serve and who would we like to target for the future?
What does our firm currently stand for in their minds
What do they expect from us and,
How well do we understand and fulfil these expectations?

Offering
What are the attributes and benefits of our current service offerings (core
products and their accompanying supplementary service elements)?
According to customers in different market segments, how well do each of our
service offerings meet their needs?

Competitors
how do our offerings compare with competitive offerings and how do they differ
and how compelling are those differences?
Are there weaknesses or vulnerabilities in competing offerings that we exploit
to our advantage?
How do we strengthen our competitive position in the market segment(s) of
interest to our firm?

Slide 16
 The building blocks of a successful
positioning strategy (and customer value proposition)

Points of difference service attributes or benefits consumers

positively associate with a brand, BUT have a belief that they
could not find these attributes (at least not to the same extent)
in competitive brands.

Slide 17
Slide 18
 Choosing Points of Parity and Points of Difference

Relevance: perceived to be personally relevant and important to consumer

Westin Stamford hotel in Singapore advertised that it was worlds tallest hotel but is this relevant
to tourists? Whereas Cathay pacifics constant reference to levels of in-flight service quality is
relevant to travellers.

Distinctiveness: perceived as distinctive and superior

White Lady Funerals only females and all white uniforms

Believability: perceived as believable and credible

Yamaha in Indonesia may claim it offers best after sales service and can back this with credible
market research over many years.

Slide 19
 An excellent example of distinctive and competitively
differentiated positioning can be found in BreadTalk,
Singapore.

Courtesy of BreadTalk

Slide 20
Slide 21
Slide 22
Positioning Map
A useful way of graphically
representing consumers
perceptions of alternative
offerings with reference to a
range of relevant variables
believed to be important to the
decision-making process

Slide 23
Positioning Map

Slide 24
 Erik Tham/Alamy

As part of the consumer education process on emerging payment technologies,

MasterCard recently launched a television campaign series to promote its contactless
payment technology PayPass, which utilises near field communication (NFC) technology
as part of MasterCards Priceless positioning strategy.
Slide 25