Focused Strategies for Services

A business must set itself apart from its competition. To be successful it must identify and promote itself as the best provider of attributes that are important to target customers.

Four Focus strategies

1. Not realistic for nay firm to appeal for all potential buyers in a market2. Customers vary in their need, purchasing behaviour, and consumption ,are numerous and

spread out3. Each firm needs to focus on those customers to which it can serve the best4. Focus: to provide for a narrow product mix for a specific market segment5. Market focus: Extent to which firm serves few or many markets6. Service focus: Extent to which it offers few or many services

Fully focused: Limited range of services to narrow and specific market

Opportunities

1. Developing recognized expertise in a well-defined niche may provide protection against would-be competitors.

2. Allows firms to charge premium prices

Risks

1. Market is too small to generate needed volume2. Demand may be displaced by generic competition from alternative products 3. Purchasers in chosen segment may be susceptible to economic downturn

Market focused

Opportunities

1. Attractive: potential of selling many services to a narrow segment

Risks

1. Need to have strong operational capability2. Understand customers needs, wants and preferences

Service focused

Opportunities

1. Create a portfolio of customers that hedges against this risk

Risks

1. As new segments are added, the firm needs expertise to serve each segment2. More sales effort and more spend in mkt communications

Eg B2B markets

Unfocused

1. Broad markets with wide range of services2. Many service providers fall into this category3. Danger – becoming a “jack of all trades and master of none”