Service Positioning Steps for Businesses

Service Positioning Meaning

The concept of service positioning came to prominence in 1972, following the series of articles written by Al Ries and Jack Trout titled “The positioned Era” for the trade publication Advertising Age. To demonstrate positioning success and failures they wrote a book titled “The Battle of Your Mind”.

Service positioning is the compelling rationale behind why individuals should choose to purchase a particular service. Positioning means projecting the image of the product or service in such a way that the consumer perceives its value distinctively from that of competitive offers. In other words, positioning aims to strategically shape and mould consumers’ perception of a product or service. The studies on consumer behaviour show that consumers do perceive against a marketing stimulation. Since there are many marketing stimulations, a consumer may not respond selectively through a perceptual process.

According to Ries and Trout, “Positioning is defined as not ‘what you do to a product but rather what you do to the mind of the prospect you position the product in the mind of the prospect”.

Steps in Developing a Positioning Strategy

Following these steps is crucial when developing a positioning strategy for services.

Identify the Competitors
Determine the perception and evaluation of competitors
Determine the Competitors’ Positions
Analyse the Customers
Select the Position
Monitor the Position

1) Identify the Competitors

We have already completed this step as a component of the direct marketing program plans, forming the foundation for a more in-depth analysis required to formulate a positioning strategy.

2) Determine the perception and evaluation of competitors

Knowledge of how competitors are perceived and evaluated rests upon two pieces of information:

i) What attributes or benefits do customers use to judge competitive products; and

ii) How satisfactory customers perceive each product to be on each attribute or benefit.

Identifying the essential attributes and benefits that matter to customers is challenging due to the multitude of available options. This determination necessitates marketing research, and most research texts include comprehensive discussions on identifying and evaluating the attributes that customers consider necessary.

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3) Determine the Competitors’ Positions

Knowledge of how competitive products fare on important attributes or benefits is crucial for defining their positioning. Often, this involves mapping products onto dimensions that symbolize the crucial attributes or benefits. General marketers frequently employ perceptual mapping as a technique, which is equally applicable in comprehending competitive positions within a direct marketing context.

4) Analyse the Customers

Customer analysis requires determining what segments exist in a particular market. One way to approach the search for an unserved or under-served market segment is to look for a set of attributes or benefits that customers want, the firm can deliver, and its competitors cannot deliver. Once it is established that the firm’s product can deliver those attributes or benefits, the question becomes – Will customers believe that it can deliver? A competitive product failing to successfully deliver the attributes or benefits is an even more favourable scenario. Frequently a product will be able to establish a distinctive positioning simply by emphasising desired attributes or benefits that no other product has seen fit to emphasise. Remember, this crucial step in developing a positioning strategy is based on understanding what customers want, not what management thinks they want.

5) Select the Position

Assuming that the product or service has some flexibility in its positioning approach, how does the marketer select the position?

The best way is to think in terms of a perceptual map and look for “gaps” in product availability on one or more dimensions, Gaps indicate two possibilities:

i) No product is serving that particular need or set of needs, which means an opportunity exists.

ii) No one (or at least not a sufficiently large group of customers) has that particular set of needs, which means there is no opportunity.

Even if an opportunity exists, questions remain. Management must ask whether his company is capable of serving that particular segment of the market. Whether he have the skills and resources? Is his image appropriate (or can he make it so)?

6) Monitor the Position

Whether the task is to position a product, a service, or an organisation, the positioning strategy needs to permeate all aspects of the marketing effort.

The desired positioning will affect:

i) The creative execution, which must portray in both words and visuals the desired image.

ii) The structure of the offer and the implementation of its various elements.

iii) The types of customer services offered.

iv) The choice of media vehicles, both to reach the chosen target market and to provide an appropriate context for the product as positioned.

The extent to which the positioning of the product in the target market’s minds aligns with management’s desired positioning should be assessed regularly. This ensures that the positioning remains appropriate for the evolving needs of the target market. Marketing research, both qualitative and quantitative, is needed on a planned basis to oversee the positioning that has been achieved and to recommend adjustments in strategy or execution as needed.

Methods of Service Positioning

Service marketers may select an appropriate approach from the following positioning approaches based on information collected during market position and psychological positioning which are as follows:

1) Positioning by Price Value

“Value for money” can be utilised for positioning the offering effectively. In the international environment, price is normally not used for positioning, as the customer may not identify lower prices with lower quality.

2) Positioning by Attributes, Features or Customer Benefits

Marketers, while using this approach, place emphasis on the benefits of the particular features or attributes of the offering.

3) Positioning According to Users or Class of Users

This relates to consumer segments that utilize a service offering. Airlines target the executive class, tourists, and frequent fliers. Holiday resorts target domestic tourists, on vacations for hill stations and enjoyment, adventure travellers for trekking religious travellers for places of pilgrimage corporate bodies for business conferences, etc. For example, the Ashok group positions itself to the corporate world with “Conference venues can help to write corporate history” and promises attention to the minutest detail.

4) Positioning by Use of Application

Service offering is positioned based on the reason for its use. For example, Hotel InterContinental New Delhi positions itself in the meeting market with ‘the meeting place’ and promises one-stop meeting solutions, consistent standards, attention to detail and personalised service.

5) Positioning against Competition

This positioning approach is used to meet the competition and highlight the distinct features of various destinations. This form of positioning has been responsible for many advertising wars in the marketplace. For example, Visa Card competes with American Express by examples of places in the world that do not accept American Express cards and only Visa Cards are accepted.

6) Position concerning Product Class

The positioning could be based on functional benefits as well as emotional and symbolic benefits. This technique is generally used to associate an offering with unique experiences. For example, Thailand’s Tourism position, as holding a convention in Thailand is “smooth as silk where the sky is the limit”.

7) Positioning by Quality Dimensions

RATER (Reliability, Assurance, Tangibility, Empathy, and Responsiveness) is usually used for positioning the services. Service firms choose one or a combination of more than one quality dimension to position their offering.

8) Positioning by Endorsement

It involves the use of celebrities or other product successes. HDFC bank has used Sachin Tendulkar to endorse international debit cards.

9) Positioning by Comparison

In this case, the marketer uses “comparison” as the main factor for positioning a brand. Here marketer enlighten the benefits of their services in comparison with the same type of services provided by their competitors. For example, IIPM with IIM and LIC with other private insurance companies.

10) Positioning by Service Evidence

Marketers use the extended service mix elements, which are as follows:

i) Positioning by Physical Evidence

‘Someone who purchases a service may go away empty-handed but does not go empty-headed. They have memories, and it is the job of the service provider ‘to make these memories stay as pleasant as possible. The service organisations use physical evidence like advertisements, brochures, visiting cards, etc., to solidify the image of the organisation or its offering in the customer’s mind. The quality of paper, graphics, colour schemes of a brochure, building aesthetics, and exteriors all are significant in positioning

ii) Positioning by Process

Positioning is defined in terms of two variables: Complexity and Divergence. Complexity relates to several steps involved in service delivery. Divergence relates to the latitude or variability of those steps. These two variables play an important role in positioning or re-positioning the services.

iii) Positioning by People

Service contact employees and other customers. The service position in the eyes of the customer will be perceived by the appearance, attitude, and behaviour of the customer contact employees. Not only does the customer contact employee influence the customers but also the customer base of the organisation does so.

11) Positioning by Availability

Here the marketer uses ‘availability of service’ as the main weapon for positioning. So the marketer tries to provide very quick services for its customer, especially within the timeframe prescribed by the customer. For example, Pizza Hut.