Developing a Service Product Positioning Strategy

What is Positioning

Positioning is the process of establishing and maintaining a distinctive place in a market for an organization and/or its service product offerings.  This process is facilitated by asking the following questions:

  • What is our service concept?
  • How does it differ from competitors’ offerings?
  • How well does it meet the needs of customers in different market segments?
  • How do we sit in the minds of current and/or prospective customers?
  • What changes do we need to make to our service offering, e. the service product, its place and means of delivery, in order to strengthen our competitive position within the minds of our target market segments?

Types of Positioning

distinction between copy positioning and service product positioning, that is the distinction between what is said or communicated through advertising and promotional activity, and what is perceived by a customer through actual experience of/with the service, its personnel, place and means of delivery.

It is important that students understand how and why Positioning plays a pivotal part in marketing strategy:

  1.  Because it is the means by which an organization differentiates itself from competitors; and
  2. Also because it secures in the minds of its target markets a predisposition towards it and what it has to offer.

Steps in Developing a Positioning Strategy

A competitive positioning strategy is formulated in the light of

  • Market analysis
  • Competitive analysis
  • Internal analysis

Market analysis serves to determine the location, nature, dynamics, characteristics, patterns and trends of demand, and to identify where to compete most advantageously.

Competitive analysis serves to identify respective strengths, weaknesses, vulnerabilities and opportunities, and to illumine how best to compete against these.

Internal analysis provides an understanding of what is required in order to compete effectively.

The simplest form of perceptual positioning map is 2-dimensional and displays consumer perceptions of competing alternatives on two attributes simultaneously.  Each attribute is rated along an axis anchored at either end by opposite adjectives (e.g. fast/slow) or by a range of numeric data such as prices or execution times.

Managerial benefits of positioning maps

Positioning maps serve to compare competing service providers on attributes important to customers and determinant of their patronage.  Therefore, they also serve to highlight gaps or opportunities for new positions to be created and new and additional markets targeted, and situations where there might be a need to alter, improve upon, or withdraw from an extant position.

Positioning maps also serve to highlight competitive strengths, weaknesses and vulnerabilities. Effective and successful positioning begins with astute market and competitive analysis and is predicated upon a thorough and insightful understanding of the nature, characteristics, interests and motivations of target markets.

In the light of this one must then discern positioning gaps and opportunities and devise the means of exploiting or capitalizing upon these most effectively.

Concluding Notes

This article concludes with a practical example of how a re-positioning strategy was formulated for a hotel.  It demonstrates how target market segments are created and defined, the use of positioning maps and what can be concluded from them.

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