Chapter 3: Positioning Services in Competitive Markets

1. Services Marketing, 7e, Global Edition Chapter 3: Positioning Services in CompetitiveMarkets

2. Overview of Chapter 3 1. FocusStrategies for Services 2. Market Segmentation 3. Service Attributes and Levels 4. Positioning Distinguishes a Brand from its Competitors 5. Developing an Effective Positioning Strategy 6. Using Positioning Maps to Analyze Competitive Strategy 7. Changing Competitive (re)Positioning

3. 1. Focused Strategies for Services

4. Standing Apart from the Competition: 藍海策略 “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 在競爭中致勝的唯一方法，就是打消競爭的念頭。 ~ 金偉燦

5. Basic Focus Strategies for Services

6. Considerations for using Focused Strategies 1. Fully focused: Limited range of services to narrow and specific market, e.g., Shouldice Hospital • Risks • Market is too small to generate needed volume • Demand may be displaced by generic competition from alternative products • Purchasers in chosen segment may be susceptible to economic downturn • Opportunities • Developing recognized expertise in a well-defined niche may provide protection against would-be competitors • Allows firms to charge premium prices

7. Considerations for using Focused Strategies 2. Market focused, e.g., Rentokil Initial, IBM(B2B) • Narrow market segment with wide range of services • Need to make sure firms have operational capability to do and deliver each of the different services selected. 3. Service focused, e.g., Starbucks • Narrow range of services to fairly broad market • As new segments are added, firm needs to develop knowledge and skills in serving each segment.

8. Considerations for Using Focus Strategies 4. Unfocused, e.g., Toshiba(142 years), GE • Broad markets with wide range of services,無所不做：家電，半導體，核電廠，個人電廠，醫療設備 • Many service providers fall into this category, 中國 家電廠商崛起 • Danger – becoming a “jack of all trades and master of none”, 資源稀釋 * 2016~ 家電賣給中國 美的集團，個人電廠合併入 VAIO, 醫療設備賣給 Canon(為了東芝的技術,2600項專利) 轉型到:B2B企業零件市場，大量投資在：半導體，核電廠，捨得才能聚焦。

9. 2. Market Segmentation

10. Market Segmentation • Firms vary widely in their abilities to serve different types of customers. （第一不如唯一！行行出狀元!） • A market segment is composed of a group of buyers sharing common characteristics, needs, purchasing behavior, and consumption patterns. （分類:15~35歲女性脖子以上的飾物） • Target segments should be selected with reference to • Firm’s ability to match or exceed competing offerings directed at the same segment. （or 別人的機會） • Not just profit potential.

11. 3. Service Attributes and Levels

12. Developing Right Service Concept for a Specific Segment • Use research to identify and prioritize which attributes of a given service are important to specific market segments • Individuals may set different priorities according to: • Purpose of using the service • Who makes decision • Timing of use • Whether service is used alone or with a group • Composition of that group

13. Important vs. Determinant Attributes • Consumers usually choose between alternative service offerings based on perceived differences between them • Determinant attributes determine buyers’ choices between competing alternatives • service characteristics that are important to purchasers, IPA • Air travel: 1. safety（不能妥協）, 2. price （預算型）, 3. convenience times（起降、轉）? If 班次少，Actually!

14. Establishing Service Levels • Make decisions on service levels – level of performance firm plans to offer on each attribute • Easily quantified attributes are easier to understand – e.g., price, punctuality of transportation services • Qualitative attributes subject to individual interpretation – e.g., hotel's degree of luxury, physical comfort, noise levels • Can often segment customers according to willingness to trade off price vs. service level: • Price-insensitive customers willing to pay relatively high price for high levels of service • Price-sensitive customers look for inexpensive service with relatively low performance(min requirement)

15. 4. Positioning Distinguishes a Brand from its Competitors

16. Four Principles of Positioning Strategy 1. Must establish position for firm or product in minds of customers 2. Position should be distinctive, providing one simple, consistent message 3. Position must set firm/product apart from competitors 4. A company cannot be all things to all people – must focus its efforts

17. A New chain of child-care center: low-cost or differentiation(ROQ)?

18. Nicolas Hayek, 平價、時尚的Swatch 手表Segmentation, Targeting, Positioning

19. 5. Developing an Effective Positioning Strategy

20. Developing an Effective Positioning Strategy • Positioning links market analysis and competitive analysis to internal corporate analysis • 1. Market Analysis • Focus on overall level and trend of demand and geographic locations of demand • Look into size and potential of different market segments • Understand customer needs and preferences and how they perceive the competition

21. Developing an Effective Positioning Strategy • 2. Internal Corporate Analysis • Identify organization’s resources, limitations, goals, and values, 衡外情，量己力:人無我有，人有我優，人優我轉 • Select limited number of target segments to serve • 3. Competitor Analysis • Understand competitors’ strengths and weaknesses • Anticipate responses to potential positioning strategies,

22. Market, Internal, and Competitive Analyses

23. Anticipating Competitive Response • Competitors might pursue same market position • Independently do same positioning analysis and arrive at similar conclusions,台灣的大學及 EMBA SWOT分析結果都相似？ • Threatened by new strategy, take steps to reposition own service • New entrant plays “follow the leader”, benchmarking, copy, 紅海 • Conduct internal corporate analysis for challengers and analyze possible effects of alternative moves • Impact of price cut on demand, market share, and profits • Responses of different segments to changes in service attributes, e.g., - lower price, offer +higher service level on some attributes, 捨，添

24. 6. Using Positioning Maps to Analyze Competitive Strategy

25. Using Positioning Maps to Plot Competitive Strategy • Great tool to visualize competitive positioning and map developments of time • Useful way to represent consumer perceptions of alternative products graphically • Typically confined to two attributes, but 3-D models can be used to portray positions on three attributes simultaneously • Information about a product can be obtained from market data, derived from ratings by representative consumers, or both

26. Positioning of Hotels in Belleville:Price vs. Service Level, 易量化屬性：策略群組成員數(2, 5, 3) Expensive Grand Regency PALACE Shangri-La High Moderate Service Service Atlantic Sheraton Italia Castle Alexander IV Airport Plaza Less Expensive

27. Positioning of Hotels in Belleville:Location vs. Physical Luxury 不易量化屬性：策略群組成員數 (1, 6, 3) High Luxury Regency Grand Shangri-La Sheraton PALACE Financial Shopping District Inner District Suburbs and Convention Center Italia Castle Alexander IV Atlantic Airport Plaza Moderate Luxury

28. Dynamic, (re)Positioning After4 New Construction: Price vs. Service Level,群組成員(2,5,3): (6. 5. 3) or (5, 2, 4, 3) Expensive Mandarin New Grand Heritage Marriott Continental Action? PALACE Regency Shangri-La No action? High Moderate Service Service Atlantic Sheraton Italia Castle Alexander IV Less Expensive Airport Plaza

29. After 4 New Construction: Location vs. Physical Luxury, (1,6,3): (3, 8, 3) or (2, 2, 5, 2, 3) High Luxury Mandarin New Grand Heritage Continental Regency Marriott Sheraton Shangri-La Action? PALACE Financial No action? Inner Shopping District District Suburbs and Convention Center Italia Castle Alexander IV Atlantic Airport Plaza Moderate Luxury

30. Positioning Maps Help Managers toVisualize Strategy • Research provides input • Attributes量化，質化 • Performance of individual firms on each attribute accurately reflects perceptions of customers in target segments • Predictions can be made of how positions may change in light of future developments • Charts and maps can facilitate “visual awakening” to threats and opportunities, suggest alternative strategic directions. "投資高人力服務 Service勝於 奢侈傢俱裝潢 Luxury” Price不輕易動，Location不能變

31. 7. Changing Competitive Positioning

32. Repositioning • Firm may have to make significant change in existing position, dynamic: t-1, t, t+1, t+2 • Revising service characteristics; redefining target market segments; abandoning certain products; withdrawing from certain market segments • Improving negative brand perceptions may require extensive redesign of core product • Repositioning introduces new dimensions into positioning equation that other firms cannot immediately match. * Innovation and change.

33. Summary • Focus Strategies: • Fully focused • Service focused • Market focused • Unfocused • Market Segmentation – buyers share common characteristics • Service attributes– determinant attributes are often the ones most important to customers

34. Summary • 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