Services Marketing

Chapter 7 : Positioning and Differentiation of Services

Definition and Concept
Positioning Strategies
Value Chain in Services
Differentiation
Role of Positioning in Marketing Strategy

Steps in Developing a Positioning strategy

Determining Levels of Positioning
Identification of Attributes
Location of Attributes on Positioning Map
Evaluating Positioning Options
Implementing the Position

Chapter Summary

After the logical step of segmenting and targeting the market, a company should position itself in the minds of customers for its unique attributes, as compared to its competitors. Positioning a service is difficult as compared to products because services are intangible in nature. However, a company should identify a competitive position for itself in the market, by differentiating itself from the competitors.

Further, a company should add value to its services by improving either its primary activities which consist of inbound logistics, operations, outbound logistics, marketing and sales, and service or its support activities which include the procurement processes, infrastructure of a firm, its human resource management, and the technology development.

These interdependent and interrelated activities, together contribute to the margin that the company aims to earn. This concept of a value chain has helped organizations identify their core and non-core activities so that some of them can be outsourced. The firm's strengths help the firm gain either a cost advantage or a differential advantage over its competitors.

To gain a competitive advantage, a company should differentiate itself from its competitors based on the attributes that are important, distinct, communicable, superior, preemptive, affordable and profitable to the customers. Further, companies should understand the importance of positioning in developing a marketing strategy and its influence on the profit margins of a particular company.

This understanding will help a firm in framing a suitable positioning strategy. As part of the positioning strategy, a company should first determine the levels of positioning it wants to occupy in the market, identify the attributes that are important to the target market, and locate these attributes on the positioning map in relation to its customers.

Further, it should evaluate the positioning options available and decide if it wants to position itself against its competitor, or occupy a unique position in the market, or reposition itself. Last, it should opt for a good implementation strategy that clearly communicates the desired position to its customers.

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