Positioning and Differentiation of Services

Positioning is not what you do to a product .It is

what you do to the mind of a prospect.

Differentiation and positioning go hand in

hand.

“Positioning is the process of establishing and

maintaining a distinctive place in the market
for an organization and/or its products”
Positioning Strategies

Three broad positioning strategies (suggested by

Michael Porter)
 Overall cost leadership (lowest cost producer)
 Differentiation (attributes, benefits)
 Focus (on a specific niche segment)
Positioning Strategies
Value Chain in Services

Concept mooted by Michael Porter

An organization carries out Primary and Support

activities which add value and create profit margin

By out sourcing some of the non-core activities

organizations can concentrate on the core activities
and deliver better service to customers
Value Chain Analysis
Differentiation

“Process by which organizations produce and market

goods and services in such a way that makes
customers perceive them as different from those
manufactured by other companies”
Factors to be considered while differentiating
 Importance of the attribute being differentiated
 Distinctive- Attribute offers unique value to customers
 Superior-Natural choice for customers
 Communicable-Difference should be easily
communicated to users
 Preemptive-Can not be copied easily by competitors
 Affordable-Both for customer and service provider
Service “personnel” can also create differentiation
Role of Positioning in Overall Marketing
Strategy for Services

“Positioning is the process of establishing and maintaining a

distinctive place in the market for an organization and/or its
products”

 Positioning of services is more difficult than that of products.

Therefore the need for tangiblizing services
Differentiation through right mix of tangible evidence and intangibles
will provide competitive advantage to service providers.
E.g. Promotion of tourism in India “Incredible India”
The image of an organization, the features of its services and how
different they are from the competitors will be effective only when
customers also perceive them the way the company wants them
to.
Positioning Strategies

Specific positioning strategies

 Attribute positioning ( Thomas Cook-oldest travel
agency)
 Benefit positioning (Any where banking offered by
SBI)
 Application positioning (BSNL is the best for
broad band service )
 User positioning (India as the best IT solution
provider)
 Competitor positioning (ISB Vs IIMs)
Positioning Strategies

Specific positioning strategies

 Category positioning-category leader (IMAX-
Multiplex theatres)
 Price - Indigo
 Customer Experience-Kingfisher Airlines
Positioning Strategies

 Under positioning-Failure of the brand to provide a strong

benefit or reason for the customer to choose (Vividh Bharathi)
 Over positioning-Target segment becomes too narrow and
many potential customers are ignored in the process (World
Space Radio,)
 Confused positioning-Brand communicates two or more
contradictory features/benefits( Lemon Pepsi)
 Irrelevant positioning-Brand offering irrelevant/redundant
features/benefits (Sony Ericson)
 Doubtful positioning-Customers doubt capacity of the brand
to deliver the promised benefit (Country club)
Developing a Positioning Strategy

 Level of positioning-Service, Corporate or Category

level (Airtel)*
 Identification of attributes-Unique features, price,
specific needs, benefits (Rational and emotional)
Market research would help identify customer
preferences and specific attributes based on which
purchase decisions are made
 Attribute Mapping (perceptual mapping)
Objective positioning-Visible attributes of the service
Subjective positioning-Image of the service in customer’s mind
Developing a Positioning Strategy

 Evaluating Positioning Options

 Strengthening present position against competitors
(avoid head on collision with the leader)
 Identifying an unoccupied market position
 Repositioning (to obtain superior position vis-à-vis
competitors by regular repositioning)
Positioning Strategy

Implementing the position

 Service-Unique, innovative
 Price-Effect of price on quality perceptions and
purchase decisions should be understood
 Location-Place/accessibility of service
 Promotion-Position a service provider wants to
occupy should be clearly communicated to
customers
 People/Physical evidence-Can act as
differentiators
 Process-Helps repositioning (Complexity and
Divergence)