8- Market Positioning

Introduction:

Marketers divide the market into segments and determine which segments to target. Customer acquisition and retention will be aimed at the designated category. Positioning is the perception of a brand or product that it creates in the mind of a target consumer and reflects the essence of that brand or product in terms of its functional and non-functional benefits as perceived by the consumer. As markets become increasingly crowded and competitive with comparable products, buyers base their purchasing decisions on the product’s image rather than its real attributes.

The appropriate positioning is perhaps more crucial to a brand’s long-term success than its features. Marketers sometimes use alternative pictures for the same product or service in different market segments or reposition the product without changing its physical characteristics. You will discover how marketers place their services in the eyes of their target customers in this unit.

A service blueprint is a detailed description of a service that may be used to implement and maintain it. It involves mapping out a service journey, identifying the processes that make up the service, isolating potential fail spots, and determining the trip’s duration. The blueprint describes the service procedure in simple terms.

Market Positioning:

Positioning is a fight for the consumer’s attention. It is the third and final step of the much-discussed STP process, following segmentation and targeting. For positioning to be successful, customers must be convinced that the service offered is distinctive in terms of features, value, and benefits.

Consequently, the offer must be positioned in their minds so that they can recognise it among the crowd and be convinced that it is the finest offer for them.

Four Principles of Positioning:

The four principles of positioning are:

1. A service firm must position itself in the target segment’s mind.
2. The position should be singular, with one simple, consistent message.
3. The position must set the service firm and the service product apart.
4. A service firm cannot be everything to everyone; it should focus on specific segments.

Positioning and Differentiation of the Service:

• Positioning by Attributes: A service provider positions the service based on some unique feature or attribute. Example: Reliance Communications positions itself as the No.1 network in India. Allahabad Bank positions itself as the oldest bank in India
• Positioning by Benefits: A service can also be positioned based on the benefits sought by the consumers. Consumers usually tend to analyse the benefits of the service before using it, so this type of positioning may work well. Example: Insurance companies mainly position on benefits, like Max New York Life Insurance, which positions itself by saying ‘karo jyada ka irada’.
• Positioning by User: The services are also positioned for specific user groups. Example: MTV positions itself as a channel for youngsters
• Positioning by use: Service is the best option for a certain use or application. For example, SBI positions itself as the best bank for seeking educational loans, and Citi Financial positions itself as a bank that processes loans quickly and without hassles.
• Positioning by Competition: Services are positioned against their competitors. Example: Avis positioned itself against Hertz by saying, ‘We work harder.’ Hertz replied, ‘We are Hertz; they are not.’
• Positioning by Service Category: The service provider positions itself as the category leader and becomes inseparable from service. Example: Xerox is the leader in photocopiers, so much so that most people refer to photocopiers as Xerox.
• Positioning by Price: A service can also be positioned based on particular prices. Example: Wal-Mart positioned itself by saying ‘always low prices’
• Positioning by Quality: A service can also be positioned according to certain quality standards. For example, the Oberoi-Hilton hotels positioned themselves as high-quality, high-priced hotels.

Positioning Process:

Identify the Target Market

 

Stage 1: Identify Key Product Characteristics:

When consumers make a purchasing decision, the service marketer should try to figure out which elements and characteristics of the offer they want and value the most. These characteristics should be given some weighting. Colour, size, and design are physical and intangible qualities (guarantees, reputation, experience, quality, etc.). For example, consumers may place varying weights on the characteristics of a tour package company’s offer. A vegetarian may be more concerned with the food offered throughout the journey, whereas others may be more concerned with the cost or range of places and tourist attractions. SOTC / Kuoni, the outbound travel package operator, has a unique understanding of the desires of Indian tourists – food similar to that found at home – and has been able to position itself with the “Ghar ka khana” promise.

Stage 2: Draw a Positioning Map:

A positional or perceptual map is drawn using the weights of distinct features. This is a fantastic tool for visually depicting what customers think of various businesses and their characteristics. A positioning map is made of a grid with product attributes on the two axes. As a result, brands are dispersed around the grid, indicating how the market sees them compared to others. Clusters of brands in one region or a single brand in another region will indicate the level of competition and the brands’ distinctiveness (or lack thereof) to the service marketer. The marketer also gets a peek at market gaps that can be exploited.

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 grid places. Some people prefer to compete head-on, while others would rather be alone. A new entrant chooses the section in which they will participate, and if there is a cluster, such as Shopper’s Stop, Crossroads / Pyramid, Globus, and West Side, they must compete head-on. Another option is to go to the lower quadrants, where there is less competition. A service blueprint is a detailed description of a service that may be used to implement and maintain it.

• Head-on Competition:

The market is saturated here, but you may rest assured that it is a tried and true industry. If rivalry becomes more intense, margins will inevitably be stretched. If the market does not expand, a price war may ensue.

• Getting Away from the Competition:

This seemingly appealing method could lead to a trap for a service marketer. Such a posture may never yield any profitable returns or growth. Stocking many items at low costs may result in financial disaster. If the slot has a high service level but a low price, it will be a financial disaster with no profits; if the slot has a high price but a low service level, terrible PR and word-of-mouth publicity will doom the service and end in competitive failure. There will be no revenue generated at all.

Stage 4: Design Product Attributes and Associated Imagery:

The marketer creates service product features and accompanying graphics to assist the targeted client in identifying the services and their benefits. They will include a brand name (Citibank’s “Unfixed Deposits,” SBI’s “Magnum”), a slogan (Global Trust Bank’s “state-of-the-heart banking”), advertising themes (Hutch’s “delightful and emotional bonding of boy and dog”), price levels (different prices for Apollo, Hinduja, and municipal hospitals), and distribution outlets (Reliance Web World, BPL Gallery, ICICI Centres, etc). Thus, the service marketer can place his offer in consumers’ thoughts through marketing mixes.

Stage 5: Sustain a Competitive Advantage:

If a service marketer can differentiate his offer from the competition in the eyes of the target consumer, he gains a significant competitive advantage. Imitators will emerge due to success, and the service marketer must devote time and resources to them. However, this competitive edge must be maintained, which can only be accomplished by staying in touch with customers and understanding their demands.

Service Blueprinting:

A service blueprint is a diagram that displays the entire service delivery process by listing all the activities at each stage performed by the roles involved. The service blueprint is built by first listing all the actors involved in the service process on a vertical axis and all the steps required to deliver the service on the horizontal axis. The resulting matrix represents the flow of actions that each role needs to perform along the process, highlighting the actions that the user can see (above the line of visibility) and the ones that happen in the back office (below the line of visibility). Roles can be performed by human beings or other entities (organizations, departments, artificial intelligence, machines, etc.)

The service blueprint is a technique initially used for service design but has also found applications in diagnosing problems with operational efficiency. G. Lynn Shostack, a bank executive, first described the technique in the Harvard Business Review in 1984. It is an applied process chart that shows the service delivery process from the customer’s perspective. The service blueprint has become one of the most widely used tools to manage service operations, design, and positioning.

Elements:

A simple way to think about blueprints is to use a process chart consisting of inputs, processes, and outputs.

Inputs (raw materials) → Process (transformation) → Outputs (finished goods)

A service blueprint is always constructed from the customer’s perspective. A typical service blueprint identifies:

• Customer Actions: The steps customers take in the service delivery process.
• Front-stage (Visible Contact Employee) Actions: Steps taken by contact employees as part of the face-to-face service encounter.
• Back-stage (Invisible Contact Employee) Actions: (The ‘line of visibility’ separates the front-stage and back-stage actions.) Non-visible steps taken by contact employees behind the line of visibility, e.g., making a hotel or restaurant reservation by telephone.
• Support Processes are activities carried out by employees who do not contact employees but whose actions are required for the service to be delivered.
• Physical Evidence: Tangible elements associated with each step that has the potential to influence customer perceptions of the service encounter, e.g. uniforms, delivery vans
• Inventory (if required): the amount of inventory build-up required for each step
• Line of Visibility: Line that separates front-stage and back-stage actions

Optional inclusions – depending on the intended application:

• Line of Interaction which separates customer actions from service provider actions
• Line of Internal Interaction which separates the back office and the support process
• The line of Implementation separates the management zone from the support zone. Management is responsible for planning and controlling, while support activities include preparation.

Yet other scholars and practitioners have recommended adding different lines, including

• Line of Order Penetration which separates customer-induced activities from customer-independent activities
• Minimum expected wait times
• Potential bottlenecks and/or fail points

 Applications:

Service blueprinting has three main applications: simple representation, diagnosing operational deficiencies, and service design (planning for structural change or new service development).

(1) Simple Representation

A basic application for blueprints is a simple form of representing or codifying what is occurring in the current operation. In visual form, the blueprint can be used in training programs and employee manuals to help clarify service processes. Blueprints may be used in market research to help respondents visualise aspects of a service that may be the focus of an investigation. Blueprints can also be used in employee training programs and manuals to assist staff in visualising the service process and the relationships between steps in the process.

(2) Diagnosing Operational Deficiencies

Blueprints have also found widespread applications as diagnostic tools to uncover operational weaknesses. Several scholars have championed the diagnostic value of blueprints.

The blueprint can be analysed in terms of the appropriateness of physical evidence provided at each contact point and the suitability of contact personnel in relation to activities. If any deficiencies are identified by the blueprinting process, management can develop operational standards for critical steps in the process.

(3) Service design: Planning for Structural Change/ New Service Development

Shostack’s original intention was to use blueprinting as a planning tool. Using a simple diagrammatic representation of the process, management could pose “What if?” type scenarios and reconfigure the service process in the blueprint form without causing significant disruptions in real time. For example, a planner might ask, What if we give employees wider latitude? What if we reduce latitude by scripting every step? What if we reduce complexity by combining two or more steps into a single procedure? What if we add complexity by having different contact staff take responsibility for each step?

Building a blueprint:

The original service blueprint is a highly visual, graphical map that delineates the key contact points in the service process and the nature of the contact – whether with physical evidence, personnel or procedures. It can be seen as a two-dimensional map in which the horizontal axis represents time and the vertical axis represents the basic steps in the process. A line of visibility is included to separate actions visible to the customer from actions out of sight. Employee latitude, which refers to the discretion given to employees to vary the service process, is shown on the map in a call-out sign attached to the step. Process complexity is shown simply by the number of steps in the process.

The process of structuring a blueprint involves between five and seven steps, depending on the intended application. From the outset, the blueprint was designed to be seen from the customer’s perspective while simultaneously providing insights for management. Accordingly, the starting point should be to imagine the customer’s step-by-step contact points, indicating, where known, the customer’s expectations in terms of minimum tolerable waiting times for each step.

Basic Service Blueprint

1. Identify activities, sequence of activities and linkages between activities. Activities include

(a) customer actions

(b) front stage contact personnel actions

(c) backstage contact personnel actions

(d) support activities

2. Identify the line of visibility and add it to the blueprint.
3. Identify standards and tolerances, scripts, operating procedures, supporting services, and inventory for each step, and add them to the blueprint.
4. If required, draw additional lines such as line of physical interaction and line of IT interaction (optional, but recommended for complex services).
5. Specify timeframes. Show average timing or minimum tolerable customer expectations for each step and indicate responsible personnel.
   Diagnostic Information (optional)
6. Identify and note fail points and excessive waits.

Manipulate divergence and complexity.

Traditionally, service blueprints have been depicted with lines and text boxes to depict anything from user actions to support processes. Fail points, bottlenecks, and average time taken for each step can also be added at the analyst’s discretion. The information included in the service blueprint largely depends on how it will be used. Over the years, a system of commonly accepted symbols associated with service blueprints has been developed. Although blueprints are not complicated to prepare, there is no universal agreement about presenting the finished process map.

When interpreting service blueprints, there are two basic considerations, complexity and divergence.

Complexity refers to the number and intricacy of the steps required to perform the service. A complex service process has many steps.

Divergence refers to the degree of latitude, freedom, judgment, discretion, variability or situational adaptation permitted within any process step. The number of call-out signs attached to steps indicates a service process that allows wide latitude to vary steps in the service delivery process.

Steps to Creating a Blueprint:

The steps for creating a blueprint are as follows:

1. Identify the Process to be Blueprinted: This suggests that it is impossible to blueprint the whole service provider’s procedures in a single format. Individual processes must be recognised and blueprinted. The aggregate of such processes would provide the manager with a complete picture. Each process would be an issue in and of itself, making identifying specific problems and designing appropriate solutions easier.
2. Map the Process from the Customer’s Perspective: The customer’s comfort zone can be detected using this strategy. If it is discovered that customers are uncomfortable with specific sequences, processes can be changed. During service interactions, customers have purchase scripts that control their thoughts and behaviour. The blueprint development process highlights potential points of failure in the system. The process entails determining the duration of service execution.
3. Draw Line of Interaction: The line of visibility and interaction must be drawn. The areas of engagement have the most impact on the service experience.
4. Draw the Line of Visibility: These are processes in zones visible to customers and where they are most likely to participate. There are also invisible zones, which are made up of processes and interactions required for customer service but concealed from view. In a bank, this might entail verifying clients’ creditworthiness, document processing, and dispatch section operations, among other things.
5. Draw a process map from the perspective of a customer contact person, separating visible from invisible actions.
6. Draw an internal interaction line.
7. Link customer and contact person activities to support functions that are required.

Service Redesign and Customer’s Role in the same:

In the service delivery system, there are numerous potential failure spots. Although service failures are unavoidable due to Murphy’s Law (anything that can go wrong will go wrong) and cannot be avoided no matter how well planned, they can be significantly reduced by blueprinting. These failure spots have three features that the service marketer should be aware of and analyse for ramifications. They are as follows:

1. The potential for operations malfunction is high.
2. The results of the malfunction are very visible to consumers.
3. Consumers regard system malfunctions as particularly significant.

To avoid this, the service provider should consider the customer’s service expectations and redesign the service in accordance with these requirements.

There are many tools for service redesign, and a local approach may also be agreed upon as part of a wider programme. It is important to agree with which approach should be followed to ensure the quickest possible approval of the outcomes. Whichever approach is followed, the following steps will need to be undertaken:

• Getting started – define scope, set objectives, set terms of reference, build team, develop communication strategies
• current situation – map existing pathways, analyse current processes, identify best practices, assess needs of customer and service provider, identify unmet needs
• visioning – create new concepts, seek novel solutions, design new processes, define infrastructural changes
• piloting – develop an implementation plan, develop support mechanisms for implementation, disseminate new concepts and processes, review the pilot and respond to feedback
• implementation – roll out innovations, provide support, monitor and provide feedback, and sustain benefits.

Managerial actions for service design or structural change:

The examination of service blueprints ‘may suggest opportunities for product improvement that might be achieved by reconfiguring delivery systems, adding or deleting specific elements, or repositioning the service to appeal to other segments’. By manipulating complexity and divergence, it is possible to envisage service process improvements, product improvements, or new service innovations.

• Reduce divergence: Reducing divergence typically requires substituting equipment for labour, involving customers in self-service and introducing standardised operating procedures. The outcome is uniformity which reduces costs and improves productivity. This approach usually involves a shift to high-volume/low-margin positioning and requires access to mass markets to be successful. The vulnerability of this approach is that it reduces customisation and flexibility.
• Increase divergence: Increasing divergence results is effectively a niche market strategy. Higher levels of customisation and flexibility require significant investments in human resources, recruitment and training, all of which add to costs. The approach usually involves a shift towards the prestige market segment and requires access to customers willing to pay a premium for customised services. The vulnerability of increased divergence is that processes are more challenging to manage, control and distribute.
• Reduce complexity: Reduced complexity usually involves a specialisation strategy. As steps are removed from the process, the service firm concentrates on a narrower range of offerings. Examples include an obstetrician and a radiologist. The advantage of this approach is that the service provider can develop high levels of expertise and facilitate distribution and control. The vulnerability of this approach is that it exposes the service firm to risk, especially if competitors continue to offer the convenience of full-service alternatives.
• Increase complexity: Increased complexity is the service-product development option (i.e. selling different products to existing markets). Under this option, the service firm has an increased opportunity to maximise the revenue generated from each customer. The vulnerability inherent in this approach is that the firm’s market positioning may become confused. Managing a broader array of products may also expose the firm to risks of spreading its effort too thin to the detriment of overall service quality.

Managerial actions for improvements to operational efficiency:

While blueprints draw attention to operational deficiencies, the blueprint, per se, cannot suggest solutions. To identify potential solutions to operating problems, the analyst must examine the service process and consider the factors likely to cause the problem. In addition, the range of possible solutions may be constrained by the organisation’s mission, current market position and access to resources.  A summary of vital managerial actions follows:

• Standardize Procedures:

Variable performance in service delivery is largely attributable to inseparability and human factors. A lack of standardisation can indirectly influence the customer process, even in the back office. In many organisations, employees choose their systems for storing files.

To reduce this variation, the service firm has several options.

Production-lining – The production-line approach uses hard and soft technologies to facilitate production, standardise procedures and minimise deviations from human error. This approach is typically characterised by simplification of tasks, clear division of labour and low levels of employee latitude.

Introduce Standard Operating Procedures—In services where it is neither possible nor desirable to replace human labour with equipment, standardization may be achieved through soft technologies alone. Standards may include specifying the scripts for technically correct performance, prescribing a uniform or dress code for employees, and codifying operating procedures. Wherever possible, standards should include measurable components.

Isolate the technical core—Deviations can also be reduced by decoupling the technical core from other aspects of the service system. For example, a theatre may elect to use a ticketing agent for all reservations and eliminate the box office. This approach may need to be accompanied by customer education programs to ensure seamless implementation.

• Identify and Manage Critical Incidents:

Some deviation is a regular aspect of service interactions; however, any deviation likely to affect the customer’s perceptions of value directly impacts satisfaction. Those incidents which have the potential to become especially satisfying or dissatisfying are known as critical incidents and may benefit from standardised procedures. Customer waiting time is often considered a critical incident and may need to have standards and tolerances developed.

• Reduce the Number of Contact Points:

It is often suggested that reducing the number of contact points in the service processes can lead to greater efficiency since it reduces the total number of points where failure can creep into the system. The most common way to simplify the delivery process is to delegate activities to the customer through self-service technologies or self-guided processes. However, replacing technologies for humans contributes to the inflexibility of service processes and may ultimately lead to fewer opportunities to differentiate a service offering in the marketplace. Planners may need to balance competing interests of controlling the process with the overall positioning strategy.

• Increase customer participation:

Customer participation should not be confused with customer contact. Customer participation is the degree of effort and involvement, both mental and physical, required to produce and deliver the service. Examples of services high in customer participation include do-it-yourself car washes, salad bars and buffets, and distance (off-campus) education services.

The level of customer participation varies from providing simple information to the service provider to joint production with the assistance of service staff to instances where the customer is the sole producer (i.e., Self-service). Customer participation focuses on reducing the costs associated with delivering the service product.

• Segregate Complexity:

Anyone who has stood in line at a bank while a single teller assisted a customer with a lengthy transaction understands this principle. One solution is to cluster tasks with similar difficulty levels into separate groups with their procedures and performance.

• Place Linked Processes in Close Physical Proximity:

Complex services involve many steps and may require paperwork or customer files to be shuffled between contact staff, back office and support departments. The time taken to move paperwork or customers is very costly in terms of time and efficiency.

• Eliminate Loop-Backs:

In manufacturing, a loopback occurs when work is returned to a previous step for further processing. Loop-backs typically create delays because they cause consequential problems along the production line. Since service processes involve humans rather than machines, processing may be complicated by employees’ choices concerning which tasks to undertake and how to schedule them. If loop-backs present a problem, management can assist employees in clarifying roles and tasks by focusing on their place within the overall service process.

• Control Fail Points:

Failures in the service process may be attributed to either the service provider or the customer. It is possible that the service provider did not utilise resources to best serve the customer’s needs. Alternatively, service provider failures may be caused by mismanagement. For example, an employee who deviates from the script may fail to serve the customer correctly. Finally, failures can be caused by customers who do not understand the process and do not know what they should be doing. For example, a customer might fail to provide appropriate documents for an appointment with a bank manager or lawyer.

It is important to diagnose the reasons for fail points before implementing solutions. Failures attributable to customers are often due to misinformation. In such cases, the service firm could, for instance, provide customers with information checklists when they make an appointment. Failures due to a lack of resources may require short-term solutions to alleviate the immediate problem while long-term solutions, including resource acquisition, can be pursued.