Page 147 - DMGT510_SERVICES_MARKETING

Services Marketing

Notes Stage 3: Decide on a Competitive Strategy

After the perceptual map has been drawn, the decision to be taken is either of the two:
To compete head-on

Get away from the competition

Different players take different positions in the grid. Some are competing head-on while others
prefer to be alone. A new entrant decides on the segment to compete in and if there is a cluster,
as with Shopper’s Stop, Crossroads/Pyramid, Globus and West Side, then they have to compete
head-on. The other choice could be the lower quadrants where there is an absence of competition.

Getting Away from the Competition

This seemingly attractive strategy might land a service marketer in a trap. There may never be
any profitable returns or growth from such positioning. Stocking a wide range of goods at low
prices might lead to financial failure. If the competition-free slot has high service with low price,
then it is destined to be a financial failure with no profits in sight; and if the slot has high price
with low service, bad PR and bad word-of-mouth publicity will doom the service and would
result in competitive failure. There will not be any revenue coming in at all.

Head-on Competition

Here the market is crowded, but there is an assurance that it is a tried and tested sector. If the
intensity of rivalry increases, then margins are bound to get squeezed. If the market is not
growing, it might only start a price-war.

Stage 4: Design Product Attributes and Associated Imagery

To help the targeted customer identify the services and their benefits, the marketer designs
service product features and associated images are designed. They will include brand name
(‘Unfixed Deposits’ of Citibank, ‘Magnum’ of SBI), slogan (‘state-of-the-heart banking’ of Global
Trust Bank), advertising themes (delightful and emotional bonding of boy and dog for Hutch),
price levels (different prices for Apollo, Hinduja and municipal hospitals), and distribution
outlets (Reliance Web World, BPL Gallery, ICICI Centres etc). Thus with marketing mixes, the
service marketer is able to position his offer in the minds of the consumer.

Stage 5: Sustain a Competitive Advantage

A service marketer gets a decisive competitive advantage if he is able to set his offer apart from
those of the rest of the competition - in the eyes of the target customer. Success will breed
imitators, and the service marketer will then have to spend time and resources toward them off.
But this competitive advantage has to be sustained, and can only be done by keeping in touch
with the customer and knowing his needs.

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