Service positioning is a unique identity of a service in competitive market. Positioning is concerned with the identification, development and communication of a differentiated advantage which makes the organization’s products and service perceived as superior and distinctive to those of its competitors in the mind of its target customers. Positioning a service is difficult as compared to products based on its key characteristic: intangibility; degree of variability or heterogeneity of quality; inseparability.
Service positioning involves following steps: 1) determining the levels of positioning; 2) identification of attributes; 3) location of attributes on a positioning map; 4) evaluating position option; 5) implementing positioning.
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Importance of positioning:
- To make entire organization market-oriented;
- To cope with market changes;
- To meet expectations of buyers;
- To promote consumer goodwill and loyalty;
- To design promotional strategy;
- To attract different type of customers;
- To introduce new product successfully;
- To face competition;
- To communicate new and varied features added later on.
There are variety of ways through which positioning can be done. Some of ways are discussed below:
- Positioning by features. It is based on single feature or attribute of service. If the product has some unique feature or attribute a company may go with this.
- Positioning by compariso. In this service is positioned against the competitors. Under this the service is compared with a competitor and tried to show that the service rendered is better than the competitor.
- Positioning through guarantees. In this the company providing service try to give the some incentive like: Money back, Return with no questions , Exchange offers within time period etc.
- Positioning through smart taglines. Under this the company tries to use attractive taglines to pull the attention of the consumers. For example: Paytm ‘Paytm karo’.
- Positioning through price & quality. This is associated with the price and quality of the service provided. Under this company compares price and the quality provided by the competitors.
- Positioning map. Positioning map is also known as ‘Perceptual map’. It is used to show consumer perception of certain brands. It allows you to identify how competitors are positioned relative to you and to identify the opportunities in the market.
Amazon
Amazon is an American multinational company founded by Jeff Bezos in the year 1994. It mainly focuses on e-commerce, digital music, digital streaming, artificial intelligence etc. It is world’s largest online marketplace. Amazon is the second largest online retailer in India with 31.2% of market share after Flipkart which have 31.9% of market share. Mission: “To be earth’s most customer centric company where customer can find and discover anything they want to buy online, and offers its customers lowest possible price”.
Service Positioning Used by Amazon
- Multi-segment positioning. Amazon offers a wide range of products and services in more than one segment at same time. Specifically, the online retail giant sells almost 120 million products, appealing to the needs and desires of a wide range of customers in different segments.
- Adaptive positioning. The online retail giant accurately changes in external marketplace and addresses increasing customer expectations by periodically repositioning of its products and services according to changes in the segment.
- Anticipatory positioning. This refers to positioning to a market segment that has low turnover with the anticipation that the turnover will increase in near future. By doing proper research and analysis they anticipate the growth of near future and position their products and services.
- Positioning by smart taglines. Under this the online giant positions its products and services in the market by using smart, innovative, & emotional taglines which directly connects to the customers. They used tagline like “Aapki Ki Apni Dukan” which connected really well with the customers.
- Positioning through sale offers. This online giant provides various sales offers to its customers by organizing flat offers, festival sale, etc. They also provide special benefits to its premium customers by offering them early excess to the offers. They also provide cashback offers in some products.
Analysis of Amazon's Service Positioning
Amazon has successfully positioned itself as a Glocal (Go Global Act Local) e-commerce giant where one can buy anything and get it delivered at any remote locations. Using the taglines like ‘#Aapki Apni Dukan’ , ‘#Ab Khushiyon Ke Beech Budget Na Aayega’, ‘#Aur Dikhao’ etc. it has helped in carving different/distinct space in consumer’s mind.
Amazon has also achieved economies of scale through extensive product offering which include electronics, toys and games, apparels, DIY and many more. This offering helps Amazon to keep its prices low thereon passing on the benefits to the customer’s.
Amazon also provides its premium customers with its ‘Prime Membership” under which they provide them with early and easy access to its products and services. They also provide them with quick and fast delivery of their products and services. This system has also helped them to gain huge market share of 31.2%.
Amazon is also having tie-ups with different companies such as Oneplus, Redmi, etc. under which they get benefit of launching of the product line of the company. They also have tie-ups with the banking companies through which they provides different discount and payment offers to their customers. This helps them in attracting consumers towards the products and services they offer.
Amazon also focuses more on youth and tries to attract their attention by providing them discount offers. Amazon provides flat 50% off on its Prime Membership to the youth between the age group of 18 to 24 years.
Suggestions to Amazon
Following are the suggestions: 1) they should increase their tie-ups with different companies which would leave their customers with wide range of product benefits; 2) they should try to expand more of their business in expanding and developing markets; 3) they should continue diversifying its business to further strengthen its against industry-specific risks such as cybercrime, aggressive competition etc.
Flipkart
Flipkart is India’s largest e-commerce company based in Bangalore. Sachin Bansal and Binny Bansal founded this company in the year 2007. Initially company only focused on book sales before expanding into electronics, fashion, home essentials, lifestyle products etc. It is also a leading company in the with market share of 31.9% followed by Amazon with 31.2%. Mission: “To provide the customer with the product and services they wish for”.
Service Positioning Used by Flipkart
- Competitive comparison. Flipkart uses competitive strategies to position itself in the market. They compete on price bases. They always try to match or lower the price of their services compared to their competitors.
- Positioning by strong segmentation. Flipkart has demographically segmented its customers so well that it can position its different services to different targeted customers. This helps them in easy processing of service.
- Positioning by wide range. Flipkart has positioned itself in the competitive market by providing large/wide range of products. They have tie-ups with the company like Asus, Realme etc., which allows in wide range of product and services and help them in attracting customers.
- Positioning by reward system. Flipkart uses reward system in market positioning. Under this they reward their customers with exciting offers and cashback. They also reward customer with super coins which can be used of later or next purchase.
- Positioning by innovative taglines. Flipkart uses innovative tagline to attract the customers towards them during sales. They used taglines like ‘If It’s Trendy, It’s On Flipkart’, ‘Abhi Nahi Toh Kabhi Nahi’, ‘Ab Har Wish Hogi Puri’ etc.
- Premium services. Flipkart offers their customer with an option to buy its premium membership which would provide them with certain future benefits.
Analysis of Flipkart's Service Positioning
From the above discussion we can say that Flipkart has positioned itself as a loyal, trust worthy, and customer friendly e-commerce brand. This can also be proved by its market shre of almost 31.9% which highest by any online retailer in Indian market.
Flipkart also have some competitive advantages like:
- There founder are ex-Amazon employee who have complete and required knowledge of business. This provides them with a slit upper hand on the working of competitor in the market.
- They have fantastic grip and positioning in electronics market as they have wide range in product line because of their tie-ups with large companies.
- It also has slit upper hand in market as they have acquired companies like Myntra, Jabong, chapak.com, Mine360 etc.
- They have also acquired UPI based payment startup PhonePe which provides their customer with smooth, error free, and safe transfer of money.
- They have their own distribution firm ekart which ensures smooth and accurate delivery of the products and services.
Suggestions to Flipkart
Following are the suggestions: 1) they should improve their distribution channel because unlike Amazon, Snapdeal, Ebay etc. (they are not able to deliver customers in remote areas); 2) they should increase the maximum package size that is 8kg (this is low when compared to competitor like Amazon); 3) they should reduce the time which they take in delivering the product or services (they take lot more time than its competitors); 4) they should provide customers with good exchange offers in electronic products; 5) they should provide early excess of offers and products to its premium customers who have their Premium Membership.
Conclusion
After a long discussion on Amazon and Flipkart’s service positioning strategies, we can conclude following points from it. Both the companies use some similar positioning strategies like providing customers with their premium membership, using innovative taglines, providing rewards etc. But even after using similar strategies the success ratio of both companies differ. Both the companies are expanding their arms in similar directions such as electronics, digital payment, groceries etc. They also have very strong competition between them but in the end Flipkart manages to win more market share compared to Amazon. When compared in experience Amazon is rated higher than Flipkart, but when it comes to trust and loyalty Flipkart is rated higher than Amazon. There is no doubt that Flipkart stands higher in tier II and tier III cites with its efficient delivering network but Amazon has huge base in its Prime Membership subscribers.
Learning from Assignment
Following are the learning from this assignment:
- I had a deep insight into the working of big online giants and how they work in positioning their product and services in competitive market.
- It gave me handful of experience in how to collect secondary data and analyzing the same and deriving appropriate conclusion from it.
- Learned valuable skills such as online research of data, time management, how to present searched data, how to communicate ideas effectively & how to conduct a plagiarism test.
- Also learned how to successfully position a brand in a competitive market and maintain it for longer period of time. As done by Amazon & Flipkart.
- Learned how to conduct a research project through collecting secondary source of data information.
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