Positioning a Service

In the year 1972, the positioning philosophy was evolved after a number of articles were written by Al Ries and Jack Trout titled “The Positioned Era” for trade publication Advertising Age. In fact, a book titled “The Battle of your Mind” was written by them to highlight the success and failure of positioning.

Service positioning can be seen as “a reason provided by the marketers to the customers regarding why they shall buy their services.” It aims to project the image of product or service in a manner that facilitates the customers to perceive the value of service different from competitors’ value of services.

In simple words, the main focus of the positioning is to influence the perceptual process of consumers related to a certain product or service. As per the studies on consumer behavior, the values of services are perceived by the customers compared to marketing stimulation.

As there are a number of marketing stimulations, the selective response may not be possible from the customer via 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

Positioning involves the fulfillment of many objectives. The marketer can generate a successful positioning strategy only if the various required tasks for positioning a product or service are done properly. These tasks are as follows:

Steps in Developing a Positioning Strategy

1) Competitor’s Identification: The company has to be very careful in the way in which it defines the competition. The definition of the competitor has to be broad. It need not only be limited to companies that are making the same type of products/services as the company.

It should actually include all companies, which are the likely competitors of the company. A company should analyze this, keeping the customers in mind and the way they use the products/services.

2) Determining how Competitors are Perceived and Evaluated: After the definition of the competitor, the next task is to map the perception of the customers with regard to these competitors and products/services. One needs to understand the various features/ attributes that are considered important by the customers.

These have to be analyzed through marketing research techniques. The customers indicate their preference via focus groups and other survey methods, which helps the company understand their perceptions.

3) Determining the Competitor’s Position: Once the various attributes and their importance to customers are understood, the next step is to rate each competitor on these attributes. This helps us to understand how each competitor is positioned with respect to the attribute.

This also helps to understand the relative positioning of the competitors, i.e., which competitors are similar and which are not so similar in terms of an attribute.

4) Analyzing Customer’s Preferences: By the process of segmentation, it is possible to classify the customers into various segments based on age, income, psychographics, education, etc. These various segments have different motivations to purchase and also have different ratings for the attributes that have been identified.

Marketers generate the ideal preference for each segment, which is nothing but the ideal product or brand that the customers seek among all available alternatives, including those that are not available.

Once the ideal product/service is recognized, it is very easy for marketers to recognize the ideals for different segments. It also helps to identify segments that are similar in terms of ideal points.

5) Making the Positioning Decision: The next task involved in positioning is about making a positioning decision. It is not easy for marketers to make clear and accurate positioning decisions. Even market research is not so helpful in determining the positioning. Therefore, some subjective decisions are taken by marketers by keeping in mind the following questions:

  1. Whether the segmentation is suitable or not?
  2. Whether enough resources are available for communication or not?
  3. What is the level of competition?
  4. Whether the present positioning strategy is productive or not?

6) Monitoring the Position: Once the positioning strategy is generated, the company needs to check how successful the strategy is in the marketplace. These are typically noted through tracking studies.

These studies check the change in the image of the company over a period of time. The perceptions of consumers are noted without any lag time. The competitive impact of the positioning strategy is also noted.

Ways of Positioning Services

A suitable method can be selected by the service marketers for the below-mentioned positioning methods depending upon the information gathered while marketing and psychological positioning:

Ways of Positioning Services

1) Positioning by Attributes, Features, or Customer Benefits: This strategy involves multiple products attributes or uses that the brand can offer to its customers, other than the competitors.

For example, a movie theatre publicizing that it offers the best movie experience is an attribute positioning.

2) Positioning by Price Value: In order to capitalize on the offerings effectively, the ‘value for money’ positioning can be used. Price is not commonly used for positioning in case of international scenario as the lower price can be perceived as lower quality. Price value can be exemplified by Malaysia tourism’s positioning statement, which says, “Malaysia gives more natural value.”

3) Positioning by Use or Application: In this strategy, a service is positioned on the basis of its usage or applicability.

For example, Hotel Inter-Continental at New Delhi uses ‘the meeting place’ positioning, facilitates all the meeting solutions at one step, has consistent standards, gives importance to each detail, and provides customized services.

4) Positioning According to Users or Class of Users: This mainly focuses on the consumer segments with the help of service offerings.

For example, executive class, the frequent fliers, and the tourists are mainly targeted by the airlines. While adventure travelers for trekking and religious travelers for pilgrimage places, domestic tourists, vacations for hill stations and enjoyment, corporate bodies for business conferences, etc. are the main target customer groups for the holiday resorts.

5) Position with Respect to Product Class: The functional benefits, along with symbolic and emotional benefits, can also be used for positioning the services. This kind of positioning is mainly used for offerings that have some unique experiences.

For example, the positioning of holding a convention in Thailand is done as “smooth as silk where the sky is the limit” by Thailand Tourism.

6) Positioning against Competition: Here, the positioning of service is done in reference to the market’s prevailing competition. This positioning is set as a favorable substitute against the established brand.

For example, Visa Cards uses the positioning itself by highlighting the places where its cards are accepted in comparison with the cards of American Express.

7) Positioning by Endorsement: In this type of positioning, celebrities or other product successes are used.

For example, Sachin Tendulkar endorsed the HDFC international debit card.

8) Positioning by Quality Dimensions: The positioning of service can also be facilitated by RATER (Reliability, Assurance, Tangibility, Empathy, and Responsiveness). In order to effectively position their offerings, one or more quality dimensions can be selected by the service organizations.

For example, Insurance services use this approach.

9) Positioning by Service Evidence: The different types of extended service mix elements which are used by the marketers are described as below:

  1. Positioning by People: In this, service mainly includes the employee and other customers. The attitude, appearance, and behavior of the customer contact staff will be the main factors in creating service positioning in the customers’ minds. Apart from the customer contact employee, the customer base of the service firm plays a significant role in affecting consumers.
  2. Positioning by Physical Evidence: A customer who has bought a service may go bare hands, but he must have something in his head, which can affect him. These are the memories and experiences, and the service provider’s main duty to make these memories and experiences as memorable as possible. Different types of physical evidence such as visiting cards, advertisements, brochures, and so on are utilized by the marketers to provide some kind of physical evidence to create a positive image of the service firm. For example, when using the element people, the example can be a peep into a restaurant through the window glass; one will be able to perceive the quality of service by observing the type of customers and employees serving them.
  3. Positioning by Process: There are mainly two factors that can define positioning viz. Divergence and Complexity. The total number of steps which is required for the delivery of the service is termed as complexity, while the latitude or variability of these steps is termed as divergence. Both of these factors have a significant role in the development of positioning and repositioning of the service firm.

10) Positioning by Availability: In this kind of positioning strategy, the marketer’s main focus remains on the ‘availability of the service.’ Thus, the marketers fetch the services to the customers at least possible time, particularly within the time frame decided by the customer. Pizza Hut is a typical example of this.

11) Positioning by Comparison: The main factor for the positioning of the services, in this case, remains the ‘comparison.’ In this case, the marketers try to provide the different types of advantages of their services against the competitors who are providing the similar types of services.

For example, LIC compares itself with private insurances, IIPM compares itself with IIM.

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