Question

Describe the basic focus strategies in service marketing and give examples for each from the real companies for each and discuss their strategy with strengths and weaknesses.

Answer 1

Solution:

Focus strategies means catering a niche market and its consumers with the product or service an organization is offering. Focus strategies allows businesses to focus on its niche markets and cater to those selected segment of consumers only. There are two different types of focus strategies, first is cost focus and second is differentiation focus. These two strategies focus on two different parameters of the business of an organization.

Cost focus is a strategy is the one where the firm operating in a niche focuses on being the cost leader in its market. This type of focus strategy is very much similar to cost leadership strategy. In this focus strategy the firm wishes to dominate other players in the market by competition on costs. An example of this would be Amazon. Amazon is a service company that offers its consumers with products at lowest prices as compared to other competitors. Similarly, eBay is an example of cost focus service company where the focus of the business is to provide services at lower prices and thus lower costs.

Differentiation focus is a strategy where the firm is looking for differentiating itself from other players in the segment. This type of strategy is generally used by organizations that have capabilities to differentiate itself from other firms operating in the similar market. An example of an organization using differentiation strategy would be Harley Davidson, among many others. Harley operates in a niche motorcycle market and it has differentiated itself with on-road mobile vehicle service which is a form of service rarely seen among the competitors. Even though the company is purely a product based company, the service element of the company is equally strong and they differentiated effectively to push consumers make purchase decisions purely looking at the quality of the their differentiated service.

Hence, these are the two types of focus strategies and examples of each of them explaining why they use it.