Differentiation Among Services

8/7/2019 Differentiation Among Services

1/21

DIFFERENTIATION

AMONG SERVICES

PRESENTED BY:

GROUP 2


2/21


3/21

Service (Product) differentiation is a business

level strategy intended to:

increase the perceived value of firms products

(or services) compared

to competitors products (or services).

create a customer preference for firms products

/ services.


4/21

EVOLUTION OF

DIFFERENTIATED MARKETING undifferentiated marketing: the organization

has only one product and it aimed the product at

the whole market

Differentiated Marketing: the organization

introduced variation in the product models.


5/21

Five Dimensions of Differentiation

Product

Services that accompany marketing, sales and

after sales services.

Personnel that interact with the customer

Channel.

Image.


6/21

Features of Differentiation

Quality Performance

Conformance

Durability Reliability

Reparability

Style

Design


7/21

Features of Service Differentiation

Ordering ease

Delivery

Installation

Customer training

Customer consulting

Miscellaneous services


8/21

Boston Consulting Group's

differentiation opportunities matrix: Four types of industries identified by BCG matrix

are:

Volume industry

Stalemated industry

Fragmented industry

Specialized industry


9/21

Image

Safety

Furthering a cause

Reliability in use

Nostalgia

Belonging

Cleanliness Quality

Service

Accuracy

Bases of Differentiation


10/21

VRIO Criteria

Value

Rarity

Imitability

Organize


11/21

Steps in Differentiation

First step :determine who the real buyer is

Second step :identify the direct and indirectimpact on its buyers value chain

Third step: rank the buyers purchasing criteria

Fourth step :identify the existing sources of

uniqueness


12/21

Fifth step :study the cost implications

Sixth step: choose the configuration of value

activities

Seventh step :check the sustainability factor

Last step :cost reduction in the activities


13/21

LITERATURE REVIEW

Philip Kotleridentified three major tasks for a servicemarketer, one of them -competitive differentiation

Because of the intangible nature of services, it is difficultto differentiate service offer from competitors

Most innovations of service industries are capable ofbeing copied

A firm needs to differentiate its offer from that ofcompetitors by providing something unique that isvaluable to the buyer


14/21

Michael Porter,in his works, has said that it is

rather difficult to understand competitiveadvantage by looking a firm as a whole.

He argued that a firms strength ultimately fall

into one of two headings, cost advantage and

differentiation

He said that differentiation grows out of the firmsvalue chain


15/21

INDUSTRIAL IMPLICATIONINDUSTRIAL IMPLICATION

SERVICE DIFFERENTIATION IN TELECOM

INDUSTRY

AIRTEL

Airtel attempts to achieve a competitive advantage by

creating a service that is perceived as unique

Airtel is more focused on the elite people. Airtel offers the facility to take or renew car insurance


16/21

electricity bill payment;

mobile to mobile top up,

fund transfer payment transfer,

payment and purchase of airline as well as train

reservation ticket

better network coverage

network reliability,

charging customers for only what they use, instead of

features like free phone calls.


17/21

Airtel offers the most expansive roaming network.

a customer-focused differentiation strategy when

implemented with a clear vision benefits the company in

many ways including price premium, brand loyalty and

sometimes often reduced prices.

In order to effectively maintain a differentiation strategy,

the firm have a very strong skills in R&D, product

engineering, change management, marketing,

advertising, and HRM


18/21

The key factors that indicate service quality in

telecom sectors

- System coverage

- Call blockage

- Voice quality

- Dropped call rate


19/21


20/21

CONCLUSIONCONCLUSION

Service differentiation creates customer preferences.

Preferences allow firms to make above normal profits.

Almost anything can be a base of differentiation.

Bases of service differentiation that meet the VRIOcriteria may generate competitive advantage.

A service differentiation strategy is only as good as itsimplementation.


21/21

THANK YOU!

Documents

Differentiation Among Services