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Services Marketing
Notes in order to attain and maintain brand leadership. Commitment to such brand vision
allows companies in tough situations to chart out different strategies (such as either cost
cutting or enhancing value proposition) but will ensure that the brand does not deviate
from its strategic charter. As innovation prepares the brand to adapt to changing
circumstances, brand vision can guide the brand not to stray away from the core brand
promises and dilute the core brand identity.
Iconic brands can effectively regain their brand leadership by implementing this dual
strategy. Starbucks has already begun on this path. It is innovating in reaching its customers
and enhancing efficiency but maintaining consistency in its core brand promise of providing
an enjoyable experience.
The changing global economic environment has challenged many global iconic brands.
This dual pronged strategy can not only help these brand protect their brand leadership
but can also create a sustainable path to ensuring long term competitive advantage.
Question
How did Starbucks use innovation to handle growing competition?
14.1.4 The Ansoff Grid
One other growth model that is useful for marketing strategies of a service firm is the Product-
Market Growth Matrix proposed by Professor Igor Ansoff.
Figure 14.4: Igor Ansoffs Product/Offer-Market Matrix
OLD OFFERS NEW OFFERS
MARKET PRODUCT
PENETRATION DEVELOPMENT
STRATEGY STRATEGY
OLD MARKETS/
Convince its customers Give newer bouquet
OLD CUSTOMERS to consume more of its of offers, satisfying
present offers different needs for its
present customers
MARKET DIVERSIFICATION
DEVELOPMENT STRATEGY
NEW MARKETS/ STRATEGY
NEW CUSTOMERS Service firm continues The service firm
with its old offers but targets entirely new
now to different customers with
customers different offers
Growth becomes an objective for the service firms as it will garner revenues, make it competitive
and strong - and get profits. Growth can be achieved only with greater understanding of the
service firms markets and its offers - and deliberately and methodically utilizing them as
growth drivers. This is the very basis of the Ansoff Model which outlines four growth options
for the service firm.
Thus the Ansoff model takes into account a service firms offers and its customers. It splits the
offers into those which are at present a part of the bouquet of the service firm and those which
are absolutely new; similarly it categorizes the service firms customers as those who are at
present patronizing its services and those who are the newly targeted. Ansoff could elaborate on
four different strategies to be followed by the service firm to grow. They are:
Market Penetration Strategy: Here the service firm concentrates on growing by trying to convince
its present cache of customers into consuming more of its services - by increasing their appetite.
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