Beruflich Dokumente
Kultur Dokumente
Frequently heard statements like value for money, our people are the key, or convenience are
of little descriptive or differentiating value for developing competitive strategy.
Without knowing which product features are of the specific interest to customers, its hard for
managers to develop an appropriate competitive strategy for their firm and its products, and harder
still to evaluate a products subsequent performance in the marketplace.
The search for competitive advantage.
To be successful, business must identify and promote itself as the best provider of attributes that are
important to target customers.
Need for focus in competitive strategy.
In most instances buyers are individuals and corporations, too widely scattered, too varied for the
needs, purchasing behavior, and consumption pattern. Different service firms vary widely in their
abilities to serve different types of customers. Hence, rather then trying to compete in an entire
market, perhaps against superior competitors, each firm should adopt a strategy of market
segmentation, identifying those parts, or segments, that it can serve best.
Individual based customization (e.g. dentist, architect services; or even a bank developing a
sophisticated loan package for a corporate client).
Partial customization achieving economies of scale by offering standardized core products
(sometimes tailored with supplementary elements).
Identifying and selecting target segments.
A target segment is one that a firm has selected from among those in the broader market.
Frequently, target segments are defined on the basis of several variables.
E.g., a department store in a particular city might target residents of the metropolitan area
(geographic segmentation) who had incomes within certain range (demographic), valued personal
service from a knowledgeable staff and were not highly price sensitive (both reflecting
segmentation according to expressed attitudes and behavioral intentions).
Because competing retailers in the city would probably be targeting the same customers, the
department store would have to position itself in ways that created a distinctive appeal; appropriate
characteristics to highlight might include a wide range of merchandise categories, breadth of
selection within each product category, availability of supplementary services as advice and home
delivery.
The segment selection should be done considering both sales and profit potential but also with
reference to the firms ability to match or exceed competing offerings directed at the same segment.
In order to select target segments and to design effective positioning strategies, managers need
insights into how the various components (or attributes) of a service are valued by current and
prospective customers within different market segments. E.g.,
- 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 products meet customer requirements?
1
Can an existing product be redesigned so that it better meets consumer needs and is superior to
competing offerings?
What are the characteristics of our current service offerings (core products and their
accompanying supplementary service elements)?
In each instance, how do our service offerings differ from those of the competition?
How well do customers in different market segments perceive each of our service offerings as
meeting their needs?
What changes do we need to make to our offerings in order to strengthen our competitive
position within the market segment(s) of interest to our firm?
Competition content may be rather diverse (e.g., museums and other alternative forms of education,
entertainment, and recreation). To succeed, any institution needs a clear sense of mission and
distinctive position that sets it apart from the competition in ways that appeal to prospective clients.
Repositioning is redefining both service characteristics and target markets; sometimes up to
complete withdrawal. (Bankers Trust sold its retail branch to National Westminster Bank and
concentrated solely on corporate financial services and private banking, simultaneously using media
advertising to clarify its more narrowly focused expertise to prospective corporate clients).
Copy positioning vs. product positioning.
In competitive marketplace, a position reflects how consumers perceive the products (or
organizations) performance on specific attributes relative to that of one or more competitors.
Customers brand choices reflect which brands are even known and remembered and then, how
each of these brands is positioned within each consumers mind.
Perceptual positionings in consumers minds condition real decisions. (People make decisions based
on their individual perceptions of reality, rather than on an experts definition of that reality).
Copy positioning from packaged goods behavior using AD, promotion, and publicity to create
images and associations. (E.g., Western cowboy in Marlboro mean of adding glamour and
differentiating; it has nothing to do with qualities of tobacco). Slogans also add a differentiated feel
to the product.
Services, however, compete on more than just imagery or vague promises.
This entails decisions on substantive attributes that are known from research to be important to
customers, relating to product performance, price, and availability.
To improve products appeal to a specific target segment, it may be necessary to change its
performance on certain attributes, to reduce price, or to alter the times and locations when it is
available or the forms of delivery that are offered.
In such instances, the primary task of communication AD, personal sales, PR is to ensure that
prospective customers accurately perceive the position of the service on dimensions that are
important to them in making choice decisions.
Additional excitement and interest may be created by evoking certain images and associations in
AD, but these are likely to play only a secondary role in customer choice decisions unless
competing services are perceived virtually identical on performance, price, and availability.
Positionings role in marketing strategy.
Positioning links market analysis and competitive analysis to internal corporate analysis.
From these three, a position statement can be developed that enables the service organization to
answer the questions:
- What is our product (or service concept);
- What do we want to become;
- What actions must an organization take to get there?
3
Positioning may vary for products, outlets, or may be set for the entire organization. However,
overall coherency between different positioning strategies must be present.
Failing to implement positioning (especially for difficult to evaluate intangible services) may result
in one of several undesirable outcomes:
- The organization (or one of its products) is pushed into a position where it faces head-on
competition from stronger competitors;
- The organization (product) is pushed into a position which nobody else wants because there is
little customer demand there;
- The organizations (products) position is so fuzzy that nobody knows what its distinctive
competency really is;
- The organization (product) has no position at all in the marketplace because nobody has ever
heard of it.
Listing. Principal uses of positioning in marketing management
1. Provide useful diagnostic tool for defining and understanding the relationships between
products and markets:
- How does the product compare with competitive offerings on specific attributes?
- How well does product performance meet consumer needs and expectations on specific
performance criteria?
- What is the predicted consumption level for a product with a given set of performance
characteristics offered at a given price?
2.
a.
b.
c.
-
3.
a.
b.
c.
-
Making other marketing mix decisions to pre-empt, or respond to, competitive moves:
Distribution strategies:
Where to offer the product (locations, types of outlet)?
When to make the product available?
Pricing strategies:
How much to charge?
What billing and payment procedures to employ?
Communication strategies
What target audience(s) are most easily convinced that the product offers a competitive
advantage on attributes that are important to them?
What message(s)? Which attributes should be emphasized and which competitors if any
should be mentioned as the basis for comparison on those attributes?
Which communication channels personal selling versus different advertising media? (Selected
not only for their ability to convey the chosen message(s) to the target audience(s), but also for
their ability to reinforce the desired image of the product).
Correlation b/w price and service is clear (higher service hotels are relatively more expensive).
Analysis demonstrates 3 clusters: top with 4-star Regency and 5-star Grand; middle: Palace is
clustered with 4 other hotels; low: 3 other 4-star hotels.
Interesting insight: Palace appears to be charging significantly more (on a relative basis) than its
service level would seem to justify. (Because its occupancy rate is very high, guests are evidently
willing to pay the ongoing rate).
Map 2. Bellevilles principal business hotels: positioning map of location vs. physical luxury.
service and luxury. At the same time, the New Grand would need to raise its own prices to recover
the costs of renovations, new construction, and enhanced service offerings.
Map 3. Bellevilles principal business hotels, following new construction: positioning map of
service level vs. price level.
Assuming no changes by either the Palace or other existing hotels, the impact of the new
competition on the Belleville market clearly posed a significant threat to the Palace, which would
lose its unique location advantage and in future be one of three hotels in the immediate vicinity of
the financial district.
Map 4. Bellevilles principal business hotels after new construction: positioning map of location vs.
physical luxury.
The sales stuff believed that many of the Palaces existing business customers would be attracted to
the Continental and the Mandarin and willing to pay their higher rates in order to obtain the superior
benefits offered. The other two newcomers were seen as more of a threat to the Shangri-La,
Sheraton, and New Grand in the shopping district / convention center cluster. Meantime, the New
Grand and the newcomers would create a high price / high service (and high luxury) cluster at the
8
top end of the market, leaving Regency in what might prove to be distinctive and therefore
defensible space of its own.
DO NOTHING: Palace dropping into new cluster with Sheraton (or even Castle); gradual decline
(w/o renovation) implies a risk of reclassification to 3-star hotel.
DO ACTION: Renovations, service improvements, etc. will cluster Palace with Regency, resulting
in the same service level as cluster with Mandarin, but at somewhat lower price.
Action was selected assuming strategic growth of the number of business travelers. Attention is also
paid to retaining loyalty of frequent guests. AD and selling efforts promoted these improvements,
with frequent guests targeted by personal letters from the general manager.
In subsequent years, occupancy levels and profits held up very well.
Changing perceptions through advertisement.
Story of Long Island Trust, historically leading bank in this large New York suburban area.
Research showed that Long Island Trust was rated below banks like Chase Manhattan, and Citibank
on such key selection criteria as having many branches, offering a full range of services, quality of
service, and having substantial capital. However, Long Island Trust ranked first on helping Long
Island residents and the Long Island economy.
The banks AD agency developed a campaign promoting the Long Island position, playing to its
perceived strengths rather than seeking to improve perceptions on attributes on which it was
perceived less favorably. The tenor of the campaign can be gauged from the following extract from
a print ad:
Why send your money to the city if you live on the Island? It makes sense to keep your
money close to home. Not at a city bank but at Long Island Trust. Where it can work for
Long Island. After all we concentrate on developing Long Island. Not Manhattan Island or
some island off Kuwait.
Other Ads promoted similar themes, such as, The city is a great place to visit, but would you want
a bank there?
15 months later research revealed improvement of the bank on all attributes, reflecting a positive
halo effect.
Halo effects make objective evaluations of attributes difficult. (E.g. negative impression on effect A
makes impressions on other effects somewhat lower automatically).
Instead of quick questionnaires it is recommended to run in-depth interviews with customers in
order to reveal the true picture, but not blurred with halos.