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Positioning Services in
Competitive Markets
Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 7 - 1
Overview of Chapter 7
Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 7 - 2
Focus Underlies the Search for
Competitive Advantage
Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 7 - 3
Standing Apart from the Competition
George S. Day
Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 7 - 4
Basic Focus Strategies for Services
(Fig 7.1)
Narrow Wide
Unfocused
Service
Many Focused
(Everything
for everyone)
NUMBER OF
MARKETS
SERVED Fully Focused
(Service and Market
Few market Focused
focused)
Source: Robert Johnston “Achieving Focus in Service Organizations,” The Service Industries Journal, Vol. 16, January 1996, pp. 10–20
Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 7 - 5
Risks and Opportunities of a
Fully Focused Strategy
Opportunities
Developing recognized expertise in a well-defined niche may
provide protection against would-be competitors
Allows firms to charge premium prices
Risks
Market may be too small to generate needed volume of business
Demand for a service may be displaced by generic competition from
alternative products
Purchasers in chosen segment may be susceptible to economic
downturn
Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 7 - 6
Market Segmentation Forms the
Basis for Focused Strategies
Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 7 - 7
Market Segmentation
Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 7 - 8
Identifying and Selecting
Target Segments
Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 7 - 9
Service Attributes and Levels
Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 7 - 10
Developing Right Service Concept for a
Specific Segment
Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 7 - 11
Important versus Determinant Attributes
Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 7 - 12
Establishing Service Levels and Tiers
Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 7 - 13
Examples of Service Tiering in
Different Industries (Table 7.1)
Car Rental Class of vehicle Vehicle size (from subcompact to full size);
degree of luxury; special vehicle types
(minivan, SUV, convertible)
Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 7 - 14
Positioning Distinguishes a Brand
from Its Competitors
Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 7 - 15
Four Principles of Positioning Strategy
Jack Trout
Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 7 - 16
Principles of Positioning
What does our firm currently stand for in the minds of current and
prospective customers?
What is value proposition and target segment for each of our current
service offerings?
Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 7 - 17
Product Positioning versus Copy Positioning
Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 7 - 18
Slogans Used by Companies
Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 7 - 19
Positioning as a Diagnostic Tool (1)
Table 7.2
Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 7 - 20
Positioning as a Diagnostic Tool (2)
Table 7.2
Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 7 - 21
Role of Positioning in
Marketing Strategy
Positioning links market analysis and competitive analysis to
internal corporate analysis
Positioning strategy can take place at different levels
Multi-site, multi-product business: Positioning may be established for
entire organization, given service outlet or specific service outlet
Consistency among services offered at same location because the
image of one may spill over to others
Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 7 - 23
Anticipating Competitive Response
Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 7 - 24
Positioning Maps
Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 7 - 25
Using Positioning Maps to Plot
Competitive Strategy
Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 7 - 26
Positioning of Hotels in Belleville:
Price versus Service Level (Fig 7.4)
Expensive
Grand
Regency
PALACE
Shangri-La
High Moderate
Service Atlantic Service
Sheraton
Italia
Castle
Alexander IV
Airport Plaza
Less Expensive
Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 7 - 27
Positioning after New Construction:
Price versus Service Level (Fig 7.6)
Expensive
Mandarin
New Grand Heritage
Marriott
Continental
Action?
Regency PALACE
Shangri-La
High No action? Moderate
Service Service
Atlantic
Sheraton
Italia
Castle
Alexander IV
Less Expensive Airport Plaza
Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 7 - 28
Positioning of Hotels in Belleville:
Location versus Physical Luxury (Fig 7.5)
High Luxury
Regency
Grand
Shangri-La
Sheraton
PALACE
Financial Shopping District Inner
District and Convention Center Suburbs
Castle Italia
Alexander IV
Atlantic
Airport
Plaza
Moderate Luxury
Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 7 - 29
Positioning After New Construction:
Location versus Physical Luxury (Fig 7.7)
High Luxury
Mandarin
New Grand
Continental Heritage
Marriott Regency
Sheraton Shangri-La
Action?
PALACE
Castle Italia
Alexander IV
Atlantic
Airport Plaza
Moderate Luxury
Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 7 - 30
Positioning Maps Help Managers to
Visualize Strategy
Positioning maps display relative performance of competing
firms on key attributes
Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 7 - 31
Changing Competitive Positioning
Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 7 - 32
Repositioning
Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 7 - 34
Summary for Chapter 7: Positioning
Services in Competitive Markets (1)
Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 7 - 35
Summary for Chapter 7: Positioning
Services in Competitive Markets (2)
Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 7 - 36
Summary for Chapter 7: Positioning
Services in Competitive Markets (3)
Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 7 - 37
Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 7 - 38
Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 7 - 39