Based on this detailed analysis, the board of directors can decide to select anumber of target market segments whose needs the business can best meet withexisting services or develop add
THEORETICAL BASIS
Market segmentation – Selecting target market segments - Brand
Developing a strong market positioning strategy for service businesses requires a comprehensive analysis of customer segments, competitors, and internal capabilities By segmenting the market and understanding customer needs, businesses can identify opportunities for differentiation and build a strategy that aligns with their strengths and competitive landscape.
Effective market segmentation involves grouping customers with similar characteristics, needs, and purchasing behaviors into distinct segments This ensures high homogeneity in consumption patterns within each segment and maximizes the difference in service needs between segments By clustering customers with similar service requirements, businesses can effectively analyze and understand their demographics, geographic locations, social variables, psychology, and behavior.
Figure II- 6: Nike Brand b Selecting target market segments
Selecting target market segments - once customers have been grouped into segments, the company must evaluate the attractiveness of each segment and decide on one (or several) potential market segments that customers are interested in using the company’s services, thereby focusing on serving these customer segments well.
As an example, Nike has their Jordan brand specifically targeting sneaker enthusiasts and basketball fans c Brand positioning
Brand positioning - the unique position the business and/or its service brand occupies in the minds of consumers.
Before businesses can create a unique position in the hearts of consumers, they must differentiate their services from those of their competitors Differentiation is the first step to creating a unique position for your business service brand Nike targets active individuals who value performance, motivation, and pushing their limits.
MARKET SEGMENTATION SERVICE
Market segmentation is one of the most important concepts in marketing. The ability of service businesses to serve different customer groups is also very different Therefore, instead of trying to compete in the entire market, likely having to face fierce competitors, each company should apply a market segmentation strategy to identify market segments the target market that the business can best respond to There are many methods of market segmentation, and marketing experts often use multiple methods to achieve the best results The most traditional and most popular method is demographic segmentation (e.g., based on age, gender, and income) However, this method of market segmentation does not make much sense, since the needs and purchasing behavior of two customers in the same demographic group may be very different (for example, not all men are middle-class people in their 20s feel and behave the same way)
Psychographic segmentation, focusing on lifestyle, attitudes, needs, and aspirations, is gaining traction for its ability to build strong brand identity and emotional connections with consumers While this approach may not directly influence behavior, behavioral segmentation complements it by analyzing customer usage patterns, identifying infrequent, frequent, and unusual user groups Need-based segmentation delves into actual purchase desires, aligning with multi-attribute decision-making models to segment customers based on factors like time, quality, and price sensitivity Recognizing diverse needs and varying decision-making criteria is crucial for effective market segmentation.
• Purpose and context of service use.
• Time of use (time of day/week/season).
Is the individual using the service alone or in a group, if in a group, what is the composition of that group?
Consider the criteria for choosing a restaurant for lunch in three situations: when you are on vacation with friends or family, meeting a potential client, or going for a quick meal with colleagues With such a wide range of options to choose from, in each different situation, it is almost certain that you will choose a different type of restaurant The probability of choosing the same restaurant for all three cases is even more irrelevant It's also possible that, if you let someone else make the decision, they will make a different choice Therefore, it is necessary to clarify the context and reasons why customers buy a service when researching market segmentation
To effectively segment the market, businesses should start by deeply understanding customer needs (segmentation based on needs) Big data technology and market research methods allow marketing experts to collect accurate and detailed information about each individual customer, thereby achieving more accurate market analysis, serving the target market segment Next, marketing experts can combine customer insights with demographic, psychographic, behavioral, and contextual variables to more clearly identify and describe the characteristics and needs of key market segments.
Contiki Tours is a great example of using demand segmentation as a foundation, and then adjusting the segments based on other market segmentation methods They started with young travelers, then catered to specific needs (singles seeking social experiences) and lifestyles (high-energy, budget-conscious, multi- stop explorers) within that segment This allows them to offer targeted packages like
Consumers usually make their choices among alternative service offerings on the basis of perceived differences between them However, the attributes that distinguish competing services from one another are not always the most important ones For instance, many travelers rank "safety" as their number one consideration in air travel They may avoid traveling on unknown carriers or on an airline that has a poor safety reputation, but after eliminating such alternatives from consideration, a traveler flying on major routes is still likely to have several choices of carriers perceived as equally safe Hence, safety usually is not an attribute that influences the customer's choice at this point.
Determinant attributes (i.e., those that actually determine buyers' choices between competing alternatives) often are way down on the list of service characteristics important to purchasers, but they are the attributes on which customers see significant differences among competing alternatives For example,the convenience of departure and arrival times, availability of frequent flyer miles and related loyalty privileges, quality of inflight service, or the ease of making reservations might be determinant characteristics for business travelers when selecting an airline For budget-conscious vacation travelers, on the other hand, the price might assume primary importance.
The marketing researchers' task, of course, is to survey customers in the target segment, identify the relative importance of various attributes, and then ask which ones have been determinant during recent decisions involving a choice of service suppliers Researchers also need to be aware of how well each competing service is perceived by customers as performing on these attributes Findings from such research form the necessary basis for developing a positioning (or repositioning) campaign.
For instance, organic produce is clearly an important attribute of Organic food Their marketing heavily emphasizes the quality and health benefits of organic food.
While consumers value organic produce, price can be a deciding factor at the point of purchase If a competitor offers a comparable selection of organic products at a lower price, it may influence the consumer's choice, even if they prioritize organic options.
Although we need to understand the difference between important and determinant attributes for our target customers, creating a positioning strategy requires more than just identifying those attributes Decisions must also be made on what level of performance to offer on each attribute Some service attributes are easily quantified, while others are qualitative Price, for instance, is a quantitative attribute The punctuality of transport services can be expressed in terms of the percentage of trains, buses, or flights arriving within a specified number of minutes from the scheduled time Both of these attributes are easy to understand and therefore quantifiable However, characteristics such as the quality of personal service or a hotel's degree of luxury are more qualitative and therefore subject to individual interpretation To facilitate both service design and performance measurement, each attribute needs to be operationalized and standards must be established For instance, if customers say they value physical comfort, what does that mean for a hotel or an airline, beyond the size of the room or the seat? In a hotel context, does it refer to ambient conditions, such as the absence of noise? Or to visible, tangible elements such as the bed? In practice, hotel managers need to address both ambient conditions and tangible elements Customers often can be segmented according to their willingness to trade off price versus service level across a broad array of attributes within the service concept Price-insensitive customers are willing to pay a relatively high price to obtain an elevated level of service on each of the attributes important to them In contrast, price-sensitive customers will look for an inexpensive service that offers a relatively low level of performance on many key characteristics; there may be others, such as safety, on which they are unwilling to compromise.
Selecting target market segments
Service focus strategy: is to focus on providing services to a group of customers, a product segment or a specific geographical market While low-cost and idiosyncratic strategies target industry-wide goals, focus strategies accomplish a narrow strategic goal more effectively than competitors with broader goals
For example, Starbucks Reserve targets customers who love high-end coffee They offer selected coffee from famous regions, processed using manual methods such as siphon and pour-over Starbucks Reserve stores are luxuriously designed, creating a unique and comfortable enjoyment space, helping to differentiate and attract discerning customers, while enhancing customer loyalty
The extent of a company’s focus can be described along two dimensions: market focus and service focus
Market focus is the extent to which a firm serves few or many markets
Service focus describes the extent to which a firm offers few or many services
These two dimensions define the four basic focus strategies:
Fully focused: providing a limited set of services (or just a single core service) to a narrow and specific market segment
Rolls-Royce Motor Cars exemplifies a focused strategy, targeting a narrow segment of the super wealthy with their exclusive line of super luxury cars Each Rolls-Royce is personalized to individual customer requirements, guaranteeing unique luxury This approach allows Rolls-Royce to maintain its leadership in the luxury car market and cultivate loyalty among high-net-worth clientele.
While a centralized approach offers advantages, it carries inherent risks A limited market size could hinder output, revenue, and profitability, making it unsustainable Furthermore, centralized businesses are more susceptible to disruption from emerging technologies and products.
Market focused: In a market focused strategy, the company provides many services to only a narrow target market segment
For example, Tumi Company specializes in manufacturing and selling ideal action products and high-end travel accessories Tumi does not try to serve the entire action market, but focuses on a small segment, namely businessmen and high-end customers who are willing to spend more for quality and classy design The company offers a variety of products such as suitcases, handbags, backpacks, and travel accessories, all geared toward the needs of this market segment.
Figure IV- 9: Rolls-Royce Motor Cars
Figure IV- 10: Tumi Company in B2B markets
For example, FedEx focuses on providing a small number of transportation and logistics services to a broad market with many different customer segments, including express delivery, international shipping, and supply chain management
While some vendors attempt to cater to the entire market by offering a wide range of services, this strategy can lead to superficial offerings lacking depth This lack of focus can hinder the development of strategic strengths, ultimately failing to adequately meet customer needs This approach is generally not recommended, except for public utilities and state agencies obligated to provide a comprehensive range of services.
Samsung, known for its consumer electronics dominance, has strategically diversified its operations beyond a single field The company now encompasses diverse sectors like information technology, home appliances, and even medical technology, demonstrating its commitment to a wider market reach.
So how does a business choose the appropriate strategy among the three
For a fully focused strategy may be appropriate for a niche market segment where customers have unique needs and requirements that the service environment, service processes and interactions with service personnel need has a special design Under these conditions, a fully centralized strategy will provide outstanding service quality and ensure cost optimization
With a market focus strategy that may be appropriate if customers value the convenience of “one-stop shopping,” the company is able to provide selected services with significantly better quality than its competitors competitors, there is a similarity in selling many services to the same customer, thanks to which the company can reduce prices for customers or improve service quality
A service-focused strategy works best if the company has unique capabilities and resources that can provide an extraordinary quality or extremely cost-effective service Company can take advantage of this to provide services to a large market
PRINCIPLES OF POSITIONING
Once we have segmented the market, and understood determinant attributes and related service levels, we need to see how we can best position our service in a competitive mar- ket Competitive positioning strategy is based on establishing and maintaining a distinc- tive place in the market for an organization and/or its individual product offerings Jack Trout distilled the essence of positioning into the following four principles:
A company must establish a position in the minds of its targeted customers. recognizable brand
The position must set a company apart from its competitors
Effective positioning is crucial for companies competing for customers Understanding positioning principles helps organizations develop a competitive advantage, whether they offer services or products This concept, rooted in packaged-goods marketing, encourages service managers to analyze their offerings and answer six key questions.
1 What does our firm currently stand for in the minds of current and prospective customers?
2 What customers do we serve now, and which ones would we like to target in the future?
3 What is the value proposition for each of our current service offerings and what market segments is each one targeted at?
4 How does each of our service products differ from those of our competitors?
5 How well do customers in the chosen target segments perceive our service offerings as meeting their needs?
6 What changes do we need to make to our service offerings in order to strengthen our competitive position within our target segment(s)?
STRATEGIC POSITIONING EFFECTIVENESS OF VINSCHOOL - THE KEY
Vinschool, a non-profit educational system spanning preschool to high school, was founded in 2013 by Vingroup Corporation Initially established to serve the children of residents in Vinhomes urban areas, Vinschool aims to create a Vietnamese school with international standards Its mission is to nurture talents, educate students to become responsible citizens with aspirations, and prepare them to succeed, contribute to their country, and integrate internationally.
Vinschool, a modern private school system, positions itself as a competitive choice by offering a bilingual curriculum, competitive tuition fees, and an international standard curriculum using Cambridge textbooks Their curriculum emphasizes individual education components like physical education, skills and character development, experiential subjects such as global citizenship, and cultural subjects Notably, Vinschool is the only general education school that incorporates the Vietnamese curriculum into teaching for students from grade 1 to grade 12.
Thanks to the right positioning strategy, after over 9 years of development,Vinschool has become the largest education system in Vietnam Vinschool currently has 49 reputable campuses nationwide focusing on Hanoi, Ho Chi Minh City, HaiPhong, Thanh Hoa, Ha Tinh with over 42,000 students Especially, Vinschool has affirmed its pioneering position, leading in innovating programs, educational philosophy in the system of general education schools in Vietnam.
Using positioning maps to plot competitive strategy
Positioning Map: is an important tool in Marketing and brand management.
This tool is used to position and understand products, services, or brands in the market compared to competitors This tool helps the market and company shape their image, position based on attributes and important factors that customers evaluate.
There are two types of positioning maps: 2-axis chart and 3-axis chart
Information for mapping positioning (or the position of a company in the market based on a certain attribute) can be obtained from market data and the rankings of representative consumers who have evaluated
2 Arrange the characteristics on the positioning map
The positioning process involves identifying prominent characteristics and identifying the locations of various service businesses on the positioning map
Creating a positioning map involves four steps:
1 Select the most prominent pairs of characteristics of the service on the target market The market map will be more detailed and accurate in determining the position of goods on the market if many pairs of market characteristics are considered, analyzed, and incorporated into
3 Selecting the service position of the enterprise in relation to the services of competing rivals on the model
4 Use multi-attribute models Use multiple models with pairs of characteristic attributes to establish the location of services, then use graph vector operations to build a service location map on the market
Some services whose positioning on the market depends on both objective and subjective factors of the business
Pair of attributes: price and quality Brand B: low price, high quality Brand C: low price, not high quality Brand A: high price, high quality
For instance, in the coffee market, the dimensions are price and quality The map will show how different coffee brands are positioned on these dimensions and how they appeal to different segments, like premium, mainstream, or budget customers.
A positioning map can help you use your competitive analysis and positioning to inform your business strategy, such as defining your value proposition, identifying your competitive advantage, segmenting and targeting your market, and innovating or repositioning your brand For example, you can use the map to communicate what makes your brand unique and valuable for customers, find out where you have an edge over competitors, segment the market based on the chosen dimensions, and discover new opportunities or niches in the market.
In addition to determining the position of a company's products, a positioning map also helps the company identify financial needs Determining the positions of similar services from different suppliers in the market For services of different types but can be interchangeable in consumption or related in production, when determining the position of services, specific, accurate, and multiple pairs of characteristics should be chosen.
After determining the location of the service on the positioning map, we need to perform the following steps:
Determine the specific location of each type of service along with their characteristics as well as the differences between the services
Market research involves investigating specific demand areas and comparing positioning service attributes to consumer needs This analysis helps determine the optimal service position and its key attributes.
Strengthen current position: businesses need to understand their service position clearly Use policies and marketing solutions to maintain that position
Clearly identify the untapped market segment - the market segment that competitors have not yet met Businesses need to understand the characteristics of this market in order to strategically position their marketing and build a structure for services to meet the needs of this market
Reposition the competitor: study the market carefully, identify new characteristics arising from demand, position the competitor's services From there, redefine the current position of the competing business and then proceed with improving and upgrading the service position
Service positioning and digital platforms
1 Digital service attributes used in market positioning
Unlike traditional services, digital services are all about scaling, so they must rely on artificial intelligence (AI), self-service technologies and possibly community support copper Additionally, digital services often do not come with a tangible service environment or equipment Instead, customers only need a smartphone or laptop.
Example Delivery App "Uber Eats" Instead of having to go to a store or restaurant to buy food, users just need to use their smartphone to place an order and often attracted by promises of significant cost savings compared to traditional services.
For example, Netflix, instead of buying or renting individual movies or TV shows, users only need to pay a monthly fee for unlimited access to a huge store of content This provides significant cost savings compared to traditional services such as purchasing DVDs or renting from video stores.
In addition, many digital services are provided for free or under a freemium model, meaning company provide basic features to users for free and charge for additional or advanced features
The process of establishing, operating and maintaining coordination between different components in a business or technology ecosystem, to create value and reduce risk In a digital service ecosystem, this includes managing relationships and interactions between stakeholders (users, suppliers, partners), applying evaluation and rating mechanisms , and troubleshooting, while ensuring regulations and policies are followed to maintain ecosystem stability and efficiency
For example, the Airbnb platform maintains trust and safety for both hosts and guests Airbnb's review and rating system allows both hosts and guests to rate each other after each transaction, helping to maintain a transparent and fair
Figure VII- 14: Uber Eats app environment Airbnb also labels "Super Hosts" for hosts with excellent records, thereby helping customers easily find high-quality accommodations Additionally, Airbnb has clear refund and service recovery policies to handle problems, such as refunding guests if the property is not as described or assisting with finding alternative accommodation in the event a problem arises
3 Direct and Indirect Network Effects
Network effects, a key driver of innovation in digital services, occur when the value of an asset increases as more people use it This phenomenon fuels the development of superior and differentiated services within digital ecosystems.
Secondly, the indirect network effect (cross-network effect) occurs when a network has more than 2 groups exchanging benefits with each other, the value of this group increases as the number of participating members of another group increases
E-commerce platforms like Shopee and Lazada offer customers a wider selection of products and price points, thanks to the diverse range of sellers on their networks This increased variety creates added value for customers Conversely, the growing popularity of online shopping benefits sellers by increasing the potential customer base and demand for their products.
Platforms with indirect effects face the "chicken and egg" dilemma Attracting sellers requires a large customer base, but attracting customers necessitates a substantial number of sellers This interdependence of benefits necessitates parallel scaling to achieve growth.
Not like social media platforms with direct effects, indirect effects will have a saturation point - when the number of sellers is sufficient and buyers have enough choices, the number of new sellers joining the platform will not bring much value
Ex: The number of sellers on Shopee is already large enough, customers know that they have many choices in terms of price and products, so adding new sellers does not bring any new value to customers
CHANGING COMPETITIVE POSITIONING
Markets are constantly changing, creating both threats and opportunities among competing firms As a result, firms sometimes have to make significant changes in an existing position Such a strategy, known as repositioning, could mean revising service characteristics or redefining target market segments At the firm level, repositioning may entail abandoning certain products and withdrawing completely from some market segments
Improving negative brand perceptions may require extensive redesign of the core product and/or supplementary services However, weaknesses are sometimes perceptual rather than real The perspective of the service below describes the case of BEGROUP changing market perceptions about its service offering
The driver Be changed into a new shirt, standing out with the slogan:
After completing the mission of a purely Vietnamese ride-hailing application,
Be Group has announced a new image and strategy aimed at becoming a multi-service consumer platform for Vietnamese people, while continuing to affirm the strong development of the open technology ecosystem.
Inheriting the previous version, in the new brand identity, Be Group's logo still retains two dominant colors of yellow and blue Yellow is a color that is easy to see from a distance, carrying positive meanings and symbolizing happiness and hope Blue reflects collaboration, confidence, and expresses a state of stability and is structured from closed circles symbolizing all basic customer needs within 24 hours; and developed into an infinity frame that reproduces the image for endless roads, care, empathy, and sharing from the Be consumer platform to Vietnamese users
Be Group's new slogan, "Bên nhau trọn đường," signifies their commitment to providing all daily essential needs, demonstrating dedication, understanding, and delivering satisfying experiences to Vietnamese customers, ultimately creating a positive impact on their lives.
Many successful service firms are imitated by their competitors Firms that try to com- pete in a space where intense competition already exists can end up in a “bloody” fight that stains the ocean red, because a strategy of matching and beating rivals tends to em- phasize the same basic dimensions of competition The way out is to use the “blue ocean” strategy, looking for a market space that makes the competition irrelevant The challenge is to introduce new dimensions into the positioning equation that other firms cannot immediately match James Heskett frames the issue nicely:
The most successful service firms separate themselves from “the pack” to achieve a distinctive position in relation to their competition They differen- tiate themselves by altering typical characteristics of their respective industries to their competitive advantage
Positions evolve in response to changing market structures, technology, competitive activity, and the nature of firm itself
Firm may have to make significant change in existing position
Revising service characteristics; redefining target market segments; abandoning certain products; withdrawing from certain market segments
Improving negative brand perceptions may require extensive redesign of core product
Weaknesses may be perceptual rather than real
Repositioning introduces new dimensions into positioning equation that other firms cannot immediately match
Viettel repositions its brand to fit its new mission.
The repositioning helps the Viettel brand align with the new strategy and vision that has been declared and implemented in reality, affirming that Viettel is no longer just a telecommunications service provider
According to Viettel's explanation, the red color of the logo and lowercase letters highlight the dynamic, innovative, ready for change, and ready for breakthroughs of Viettel The red color also symbolizes the national flag of Vietnam, the pride of the nation, the strength, and pioneering spirit of the corporation ã Slogan
Viettel has updated its brand identity, introducing a new slogan: "Your way." This shift aims to encourage creativity and self-expression, reflecting Viettel's commitment to delivering innovative digital services beyond traditional telecommunications The previous slogan, "Say it your way," focused on communication, while "Your way" emphasizes individual empowerment and the creation of shared value.
It can be understood that previously customers needed to express what they wanted Viettel to serve, but now customers no longer need to speak, Viettel
Developing an effective positioning strategy
Positioning is a crucial aspect of the STP marketing strategy, helping businesses establish a distinct presence in the market By analyzing customer needs, competitor offerings, and internal company strengths, businesses can leverage a positioning map to visualize their competitive advantage and identify key product attributes that resonate with customers This process culminates in a "positioning statement" that clearly defines the product or service, target audience, desired market position, and the strategic approach to achieve it.
In marketing, we must take great actions to make customers recognize the value of the business At the same time, businesses must create a close connection with customers' needs, which is when we use brand positioning It can bring us goals such as easily reaching consumers’ demand, creating a remarkable impression in the market, and making a difference from competitors We can take an example with the travel company EuroTravel The company is proud to launch with a strong slogan - A reputable tour brand, having a team of staff who are always professional and dedicated, trust and support from customers is their top tier Established in
2018, EuroTravel is a pioneer travel agency in the market focusing on exploiting unique, high-end long-distance tours around the world such as Europe - America - Australia - Canada - New Zealand, Unlike other travel companies, EuroTravel provides visitors with a true trip that includes enjoying a delicately designed tour, along with a high-class service system to bring unforgettable experiences, sublime emotions, and absolute satisfaction with the trip EuroTravel possesses almost all the "expensive" plus points in the eyes of tourists, being a highly appreciated unit in the tourism market with countless prestigious awards such as the "Asia Business Excellence" Award for 2 consecutive years (2022 - 2023), until "Reputable Vietnam Travel Enterprise 2023",
A positioning statement is a brief description of a company’s product or service, it portrays how their product/service is the right need for the audience The
4 basic elements of building a good positioning statement are:
Target audience: specific group(s) the brand wants to sell services to (Euro targets customers with high-end standards primarily)
Frame of reference: the area the brand is competing in (EuroTravel competes in the travel services industry)
Point of difference: the most attractive benefits, most different from competitors (EuroTravel has unique tours, with visa issuance rates for all European
- US - Australian markets always reaching nearly absolute)
Reasons to trust: evidence that the brand can deliver the promised benefits (EuroTravel invests in staff and is highly regarded in the market)
We can refer to Table 3.1 Principles of using positioning analysis as a measurement tool, providing input information for decision-making related to product development, transportation services, prices, and dialogue strategy We can identify and understand the relationship between the product and the market, and we compare and evaluate our competitors' supply sources, thereby developing in a more novel direction, more suitable to customer needs, predicting consumption’s achievement at the price the business wants to offer Next, we identify the opportunities of the current market situation, in terms of products, select target segments to offer different attributes from competitors; Reposition current products,businesses discuss ideas for attracting the same or new segments, what needs to be added, removed, or changed, and what features need to be emphasized in promotion Eliminate products that are no longer suitable for large demand and competition Finally, decide on a marketing mix strategy to preempt or respond to competitive moves, using distribution, pricing, and communication strategies to attract customers and convey the message.
What is the predicted consumption level for a product with a given set of performance characteristics offered at a given price?
2 Identify market opportunities for a Introducing new products
- What attributes to offer relative to the competition? b Redesigning (repositioning) existing products
• Appeal to the same segments or to new ones?
• What attributes to add, drop, or change?
• What attributes to emphasize in advertising? c Eliminating products that
- Do not satisfy consumer needs
3 Make other marketing mix decisions to preempt or respond to competitive moves: a Distribution strategies
• Where to offer the product (locations, types of outlet)?
• When to make the product available? b Pricing strategies
• What billing and payment procedures to use? c Communication strategies
• What target audience(s) are most easily convinced that the product offers a competitive advantage on attributes that are important to them?
• What message(s)? Which attributes should be emphasized and which competitors, if any, should be mentioned as the basis for comparison on those attributes?
Choosing the right communication channels, like personal selling or various advertising media, is crucial for effectively reaching target audiences and reinforcing the desired product image This selection must consider the channel's ability to convey key messages and establish a positive brand perception.
2 Market, internal, and competitor analysis
Positioning links market analysis and competitor analysis to internal corporate analysis From these three, a position statement can allow the service organization to answer six questions for developing an effectively developed positioning strategy: What do you want your brand to stand for? Where do you want to be in the market place? What do you want to be known for? What personality do you want your brand to have? What emotions do you want to spark? What do your customers want from you?
Figure IX- 17: identifies the basic steps involved in identifying a suitable market position and developing a strategy to reach it. a Market analysis
Market analysis involves understanding consumer demand, its geographic location, and whether supply meets current tastes This analysis helps optimize operations, minimize risks, and evaluate target market performance Nike, targeting active young adults in Vietnam, benefits from strong brand recognition and a significant market share However, competition from brands like Bitis, Adidas, and Puma necessitates positioning Nike as a high-end, professional sports product line.
Internal corporate analysis is to determine the organization's strengths in terms of market position, brand image as well as available resources (e.g. technology, data platform, and data analysis capabilities), materials, human resources, and business know-how, primary assets, and tangible assets) Analyze the business's limitations, goals, and core values to shape business operations From those statistical data, we eventually select a limited number of target segments to serve c Competitor analysis
Identify and analyze the strengths and weaknesses of competitors, combined
Independently do the same positioning analysis and arrive at similar conclusions: if we have the idea to have a retail business, we somehow choose to analyze the same market, goals, and target consumers In the end, how we proceed to interact with and approach buyers will be similar, it reduces the chance to impress our image in the market Secondly, firms can be threatened by the new strategy, and take steps to reposition their service Therefore, marketers have to attempt to find alternative suitable ways for their resources Finally, the new entrant plays "Follow the Leader" This can lead to a result in which customers can not reach firms directly but “this junior” To survive new entrants, we must continuously compare ourselves to known competitors, and isolate a small team from day to day to work on the future.
To anticipate competitive responses, identify current and potential competitors and conduct internal analyses This involves assessing your strengths, analyzing the impact of price cuts, and emphasizing your unique features through advertising and events Furthermore, it's crucial to analyze the potential effects of alternative moves, implement new strategies promptly, and monitor consumer reactions to service attribute changes.
CONCLUSION
Most service businesses face active competition Marketers need to find ways of creating meaningful value propositions for their products that stake a distinctive and defensible position in the market against competing alternatives In conclusion, as a marketer, using positioning strategies is one of the very first steps to help firms create unique characteristics with the basic knowledge that needs to be considered such as 4 focused strategies; market segmentation, service attributes, relationships between markets, internal businesses, and competitors; Positioning diagram to visualize competitive strategy Nearly all successful service firms pursue a focus strategy They identify the strategically important elements in their service operations and concentrate their resources on them They target segments they can serve better than other providers, offering and promoting a higher level of performance on those attributes particularly valued by their target customers.
CASE STUDY: GRAB - MOTORBIKE, TAXI SERVICE
Overview About Grab
Grab Holdings Ltd (Grab) is a mobile technology company that offers ride- hailing, food delivery, and digital payment solutions.
Grab, headquartered in Singapore, offers a wide range of services through its diverse apps, including ride-hailing (Grab, JustGrab, GrabShare, GrabCar), food delivery (GrabFood, GrabKitchen), grocery shopping (GrabMart), insurance (GrabInsure), investment (GrabInvest), logistics (GrabLink, GrabExpress), and advertising (GrabAds) The company operates across Southeast Asia, with a presence in Singapore, Cambodia, Malaysia, the Philippines, Thailand, Vietnam, and other countries in the region.
The striped lettering design of the Grab logo is related to the fact that the company is developing an app for transportation and food delivery services, which makes the lettering look like a highway The last two symbols - the letter “a” and
“b” areconnected to each other, which gives the impression of circular motion
“Whatever you need, just Grab it!” can be understood in other meanings
The company was founded as MyTeksi by Anthony Tan and Tan Hooi Ling in 2012 to make taxi rides safer in Malaysia They rebranded the company as GrabTaxi in 2013to reflect its wider range of services beyond just taxis.
In 2014, GrabTaxi secured a significant funding round led by Tiger Global Management and expanded into new markets, including Singapore, the Philippines, Thailand, Vietnam, and Indonesia, where it encountered competition from other ride-hailing platforms.
In 2015, GrabTaxi acquired the Southeast Asian operations of Uber, making
4 Mission and Vision of Grab a Vision
Grab's vision is to Drive Southeast Asia Forward b Mission
Grab aims to drive Southeast Asia forward by delivering on three missions. They are:
Accessibility for all to design products and services that are affordable for people of all income levels.
Empowering 100 Million Micro Businesses to create income and business opportunities for all our partners
Create a trusted platform of services with high standards of safety and information security
Grab Service Positioning
1 Customer, Competition, and Company Analysis (3C) a Customer Analysis
The demand for ride-hailing services like Grab continues to grow, driven by the frequent need for transportation solutions From unexpected health issues to borrowed vehicles and long distances, Grab offers a convenient alternative With a few taps on the app, users can connect directly with drivers, eliminating the need for third-party intermediaries and providing immediate access to reliable transportation.
Grab's primary target audience comprises a diverse group, including students, housewives, and office workers, primarily aged between 18 and 50 These individuals, residing in major urban areas, are highly likely to utilize smartphones for daily activities, making them prime candidates for engaging with Grab's services on a regular basis.
Understanding Grab's target customers will help us more easily access and analyze Grab's marketing strategy Below are the characteristics of Grab's target customers:
Age Minors (18 - 24 years old) and adults (25 - 35 years old)
Geographic location Mostly in urban areas and developed cities Especially two big cities: Hanoi and Ho Chi Minh City Income Average - good or better
Lifestyle Target customers are busy people who always want to optimize their time.
Interest Understanding technology trends, often looking for convenience and speed individual small-scale motorbikes.
Other technology taxi companies are also increasingly developing their brands, occupying a large market share, but encountering barriers in legal policies Fierce competition from major competitors such as Gojek and Be who have cheaper prices and more discount events or promotion campaigns
Figure II- 19: The trio in the vehicle technology industry
Individual small-scale motorbike often engages many barriers to satisfying customers such as lack of regulation, safety concerns, variable pricing, or being unable to track the journey
Sales compared to competitors: With outstanding advantages, along with priority state policies, Grab has gained a great advantage with more than 65% market share in the Vietnamese market compared to nearly 20% of competitors c Company Analysis
Corporate culture: Grab is a foreign enterprise, developing and expanding robustly throughout Southeast Asia It's a startup company that has garnered significant triumphs Armed with innovative and distinctive business strategies, and supported by a team of youthful and enthusiastic employees, it is poised to generate novel concepts for the firm's progression
Grab’s current situation: Grab is present in 55 cities in Southeast Asia, and the Grab application has been downloaded to more than 45 million devices. Currently, the trend of using Grabbike has increased sharply by 75% per month compared to Grabtaxi by 35% - Grabcar, and Grabbike support payment by card Revenue from transportation units picking up passengers increased by 26% due to increased travel demand while business revenue at delivery units increased by 20%. Grab achieved its first adjusted core profit, thanks to workforce reductions and some cuts in incentives and technology costs over the past two years.
Strengths: Grab is currently a big brand trusted by a large amount of customers in the industry Being the market leader in transportation services combined with technology in Southeast Asia Grab owns a large network of driver resources and has a large customer base after many years of fighting in the competitive market In addition, technology is heavily invested and the Grab application is also designed for easier interaction For example, piloting two features: heat maps with navigation and route suggestions, which help driver- partners see demand levels in areas near their location, with navigation buttons to desired peak areas Besides, Grab's services are considered suitable for user needs and local tastes Finally, Grab's capital is financially supported by large investors such as SoftBank and Toyota
2 GRAB STP STRATEGY a Market segmentation:
Grab employs market segmentation strategies to tailor its motorbike taxi service to the diverse needs and preferences of different customer segments This strategic approach involves dividing the market into distinct groups based on various factors such as demographics, psychographics, behaviors, and geographic locations By doing so, Grab can better understand and target specific segments with customized offerings, ultimately enhancing customer satisfaction and loyalty.
One way Grab utilizes market segmentation is by catering to different demographic groups For example, it may offer promotions or services that appeal to younger urban commuters who prioritize affordability and convenience, while also providing premium options for business travelers or tourists seeking comfort and reliability.
Psychographic segmentation is another key aspect of Grab's strategy By analyzing customers' attitudes, lifestyles, and values, Grab can create targeted marketing campaigns and service features that resonate with specific psychographic segments For instance, it may offer safety features or insurance options that appeal to safety-conscious users, while also providing flexibility and spontaneity for adventurous customers seeking new experiences.
Geographic segmentation plays a crucial role in Grab's motorbike taxi service, considering the diverse transportation needs and infrastructures across different regions Grab may customize its service offerings, pricing, and promotional activities based on the specific characteristics of each market, ensuring relevance and competitiveness in each location.
By employing market segmentation strategies, Grab can effectively target and serve diverse customer segments within the motorbike taxi service market, thereby maximizing its market reach and competitive advantage b Selecting target market segments:
Grab understands the growing demand for convenient, affordable, and fast transportation in cities Therefore they choose to segment according to user psychology, especially young people, as their target The following are some characteristics of the target market that Grab chose:
Millennials value convenience and flexibility above all else when choosing technology-driven vehicle services They demand easy, on-the-go booking and access to services through mobile applications.
Use of Multimedia Technology: Young people are often willing to use mobile applications and online platforms to book and manage ride-hailing services. They expect convenient features such as online payments, driver ratings, and vehicle location tracking.
Commenting on Grab's success
Regarding the overview of the development of the internal framework of technology enterprises, Grab creates more utilities and benefits for partners, many other features are also introduced by Grab such as: automatically receiving rides, receiving early trips, transferring Changing the ride or later this year will deploy a feature to optimize the order of pick-up at the airport Not only developing applications, Grab also focuses on improving service quality through its driver team In order for partners to stick together for a long time and replace Grab in providing the best service to customers, policies, and benefits are continuously favored by this brand for drivers The points program for driver-partners helps encourage drivers to take more trips and provide faster service
2 In terms of meeting target customer needs in market segments
Information about the vehicle and driver for each trip is also provided transparently so customers can travel with peace of mind.
The application also has an evaluation and feedback feature after each trip, which helps Grab understand the quality of drivers and have timely solutions when problems arise.
Figure III- 22: Journey review feature
Grab has successfully established itself as a leading player in the transportation industry, leveraging technology and a strong brand image to connect users with essential daily services The company's strategic use of the color blue, often associated with nature, helps to create a memorable and recognizable brand identity This clever use of color ensures that Grab is instantly associated with its services in the minds of consumers.
Grab's application is easy to install and use, customers book cars quickly and interact with drivers easily.
Grab has a large number of cars, popular in work and entertainment locations, so booking a car becomes very quick
Grab received a total of 9 awards at the SMARTIES VIETNAM 2023 awards ceremony, including two prestigious Technology Platform of the Year awards - Publisher of the Year and Brand of the Year, recognizing their achievements in mobile marketing.
It can be seen that Grab still maintains its performance as in previous years.
To compete for this "piece of the pie" of technology vehicles, competitors must have high capital in this industry because Grab is a company with financial strength. Extremely terrible, with the leading position in the market, Grab is definitely a monument that is difficult to overthrow in the ride-hailing technology segment. Besides, competitors must overcome Grab's brand awareness in the eyes of customers, which will be very difficult when Grab is already a part of daily life when it comes to traveling by car booked through the app use.
Brand positioning suitable for customers
Accept changes to suit Vietnamese culture
Build many convenient services to meet the increasing needs of customers.
The brand has a position in the Southeast Asian ride-hailing market.
Brands bring practical benefits to the entire ecosystem by connecting with customers.
Attract more customers to know Grab better.