A Taxonomy of Strategic Marketing Positioning by Port Authorities

A Taxonomy of Strategic Marketing Positioning by Port Authorities

Source: Adapted from Parola, F., Pallis, A.A., Risitano, M. & Ferretti, M. (2018). Marketing strategies of port authorities: A multi-dimensional theorisation, Transportation Research Policy and Practice Part A, 111, 199-212.

A port authority might select among multiple combinations of stakeholders and marketing actions emphasizing the distinguishing features of its value proposition and market image. Strategic marketing options can be portrayed as a combination of the stakeholder-action matrixes. The potential approaches are diverse, ranging from a very narrow segmentation to full market coverage. When defining its strategic positioning, a port authority decides in which segments to be present and the intensity of its marketing efforts. Essentially, there are five different patterns of target market selection:

  1. Single-segment concentration.
  2. Selective specialization.
  3. Marketing action specialization.
  4. Stakeholder (market) specialization.
  5. Full market coverage.

When defining its strategic positioning a port authority typically decides to follow one of the above five patterns. This variation of marketing approaches is largely corresponding to specialization observed in shipping and the expansion of actors active in port-specific or port-related activities.

The intensity of the overall positioning and the corresponding marketing efforts depend on the specifics of each port:

  • When a port is active in shipping markets, marketing focuses on a single segment. To understand the needs and wants of a specific segment, the port authority focuses on a homogeneous group of stakeholders with limited geography. This approach typically ensures cost flexibility for service production and promotion and leads to specialization. This might increase the chances of achieving a strong market presence in a particular segment. As a limitation, the port authority is more exposed to risk, given the absence of diversification, such as from unforeseen contextual changes.
  • Selective specialization occurs when the port authority identifies a number of target segments and then undertakes varied marketing actions directed to several stakeholder groups. This strategy has the advantage of risk diversification. The port authority can achieve economies of scale and scope and gain existing synergies in marketing action. Drawbacks relate to the need to cater to more than one segment in a complex and dynamic environment. Hence, it is necessary to develop multi-market knowledge and competencies in sophisticated marketing activities.
  • Marketing action specialization means that the port authority utilizes a set of similar marketing actions to deal with several different stakeholders across its foreland and hinterland. The advantage of this approach is that the port authority caters to different segments with a single marketing action and can thus internally develop unique resources and capabilities.
  • In the case of stakeholder specialization, the port authority interacts with one specific market, trying to match the needs of a particular stakeholder group. This is particularly the case for the container shipping market dominated by alliances of few companies or the cruise market dominated by few brands. The advantage of this pattern is that in the case of a monopolistic/oligopolistic environment, the port authority has the potential to adjust. The geography of stakeholders is limited, reducing the complexity of marketing actions. The weakest point of this positioning is that the port authority becomes stakeholder-focused. If the specific segment weakens, the port authority risks a profound downsizing or even a market exit.
  • Full market coverage implies that the port authority covers all market segments. This strategy requires committing a large amount of financial and technical resources and the capacity to face diverse contexts and stakeholder categories. The advantages are that a large-scale diversification (multi-geography of stakeholders) reduces market and other types of risk, minimizing the chances of failure. The main drawback is the implied lack of focus on any particular stakeholder market. Marketing actions have to intercept stakeholders in multiple geographic regions, and port markets add further complexity to the overall picture.