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Services Marketing
Slide 2010 by Lovelock & Wirtz Services Marketing 7/e Chapter 7Page
Chapter 7:Promoting Services
andEducatingCustomers
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Services Marketing
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Overview of Chapter 7
Role of Marketing Communications
Challenges of Services Communications
Marketing Communications Planning
The Marketing Communications Mix
Role of Corporate Design
Integrating Marketing CommunicationsLife is for one generation, a good name is forever. ~ Japanese Proverb
Education costs money, but then, so does ignorance. ~ Sir Claus Moser
Claus Adolf Moser, Baron Moser,
KCB, CBE is a British statistician
who has made major contributions in
both academia and the Civil Service.
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Role of Marketing Communications
Position and differentiate service
Help customer evaluate offerings and
highlight differences that matter
Promote contribution of personnel andbackstage operations
Add value through communicationcontent
Facilitate customer involvement inproduction
Stimulate or diminish demand to matchcapacity
Specific Roles of Marketing Communications
Westins This Is How You Should Feel
Campaign to Reposition Its Brand
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Role of Marketing Communications
Customers may have difficulty distinguishing one firm fromanother
Provide tangible clues related to service performance
Some performance attributes lend themselves better toadvertising than others
e.g., Airlines
Firms expertise is hidden in low-contact services Need to illustrate equipment, procedures, employee activities that
take place backstage
Help Customers to Evaluate Service Offerings
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Role of Marketing Communications
Frontline personnel are central to service delivery in high-contact services
Make the service more tangible and personalized
Show customers work performed behind the scenes toensure good delivery
To enhance trust, highlight expertise and commitment ofemployees
Advertisements must be realistic
Messages help set customers expectations
Service personnel should be informed about the content of newadvertising campaigns or brochures before launch
Promote Contributions of Service Personnel
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Role of Marketing Communications
Customers are actively involved in service production; theyneed training to perform well
Show service delivery in action
Television and videos engage viewer e.g., Dentists showing patients videos of surgical procedures
before surgery
Streaming videos on web and podcasts are new channels toreach active customers
Facilitate Customer Involvement in Production
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Role of Marketing Communications
Live service performances are time-specific and cant bestored for resale at a later date
Advertising and sales promotions can change timing of customer
use
Examples of demand management strategies:
Reducing usage during peak demand periods
Stimulating demand during off-peak period
Stimulate or Dampen Demand to Match Capacity
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Challenges of Services Communications
Intangibility creates 4 problems:
Generality
- Items that com prise a class of objects, person s, or
events
Abstractness
- No one-to-one correspondence with phy sical
objects
Non-searchability
- Cannot be searched or insp ected before pur chase
Mental impalpability
- Customers f ind i t hard to grasp benef its of com plex,
mu l t i -d imensional new of ferings
Overcoming Problems of Intangibility
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To overcome intangibility
Use tangible cues in advertising
Use metaphors
Tangible metaphors help to communicate benefits ofservice offerings, e.g.,
AllstateYoure in good hands
Prudential Insuranceuses Rock of Gibraltar as symbol of
corporate strength
Metaphors communicate value propositions moredramatically and emphasize key points of difference
Challenges of Services Communications
Overcoming Problems of Intangibility
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Challenges of Services Communications
Advertising Strategies for Overcoming Intangibility
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Marketing Communications Planning
Who is our target audience?
What do we need to communicate and achieve?
Howshould we communicate this?
Where should we communicate this?
When do communications need to take place?
Checklist: The 5 Ws Model
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Marketing Communications Planning
Prospects
Employ traditional communication mix because prospects are notknown in advance
Users
More cost effective channels utilized
Employees
Secondary audience for communication campaigns
Shape behavior
Part of internal marketing campaign using company-specificchannels
Target Audience: 3 Broad Categories
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The Marketing Funnel
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Marketing Communications Planning
Create memorableimages of specific
companies andtheir brands
Build awarenessand interest for
unfamiliar service
Compare servicefavorably withcompetitors
offerings
Build preference bycommunicatingstrengths and
benefits
Reposition servicerelative to
competition
Reduce uncertaintyor perceived risk byproviding useful info
and advice
Providereassurance (e.g.,promote service
guarantees)
Encourage trial byoffering promotional
incentives
Familiarizecustomers with
service processesbefore use
Teach customershow to use a
service to bestadvantage
Stimulate demandin off-peak,
discourage duringpeak
Recognize andreward valuedcustomers and
employees
Educational and Promotional Objectives in Service Settings
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The Marketing Communications Mix
Marketing Communications Mix for Services
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The Marketing Communications Mix
Source: Adapted from a diagram by Adrian Palmer, Principles of Services Marketing, London: McGraw-Hill,4th ed., 2005, p. 397
Sources of Messages Received by Target Audience
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The Marketing Communications Mix
Channel Aim Challenges
Sales Promotion:
Communication attached to
an incentive that is specific
to a period of time, price, orcustomer group
Generate attention and
speed up introduction
and acceptance of new
services
Motivating customers to use a
service sooner, in greater
volume, or more frequently
especially during periods whendemand would be weak
Personal Selling:
Common in b2b and
infrequently purchased
services
Educate customers and
promote preferences for
particular brand or
product
Relationship marketing strategies
based on account management
programs incur high staffing
costs; telemarketing is a lower
cost alternative
Trade Shows Stimulate extensive
media coverage with
many prospective buyers
Opportunity to learn about latest
offerings from wide array of
suppliers
Traditional Marketing Channels
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The Marketing Communications Mix
Supplement traditional marketing channels at a reasonablecost
Part of an integrated, well-designed communicationsstrategy
Can market through the companys own website or through
online advertising
Internet Marketing Offers Powerful Opportunities
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The Marketing Communications Mix
Used for a variety ofcommunication tasks
Promoting consumerawareness and interest
Providing information andconsultation
Facilitating 2-waycommunication
Stimulating product trial
Enabling customers to placeorders
Design should addressattributes that affect websitestickiness
High in quality content
Ease of use
Quick to download
Frequency of update
Memorable Web address helpsattract visitors to the site
Website Design Considerations
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The Marketing Communications Mix
Banner Advertising: Placing advertising banners and buttons
on portals such as Yahoo and other firms websites to draw
online traffic to own site
Easy for advertisers to measure how many visits to its ownwebsite are generated by click-throughs
Limitations
Obtaining many exposures does not necessarily lead to increase inawareness, preference, or sales
Fraudulent click-throughs designed to boost apparent effectiveness
Effective Advertising on Internet: Banner Advertising
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The Marketing Communications Mix
Search Engine Advertising (Reverse broadcast network):search engines let advertisers know exactly what consumerwants through their keyword search
Target relevant messages directly to desired consumers
Advertising options: Pay for targeted placement of ads to relevant keyword searches Sponsor a short text message with a click-through link
Buy top rankings in the display of search results
E.g., GoogleThe New Online Marketing Powerhouse viaAdsense and Adwords
Effective Advertising on Internet: Search Engine Advertising
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The Marketing Communications Mix
Messages reach customers through theservice delivery environment
Servicescape: Physical designService outlets
Shape customers perceptions
Delivers supplementary services
Cross-selling of additional services
Front-lineemployees
ATM, vending machines and websites
Require clear signage and instructions on how
to use the service
Self-service
delivery points Familiarize customers with service product and
teach them how to use it to their bestadvantage
Customer training
Messages Transmitted through Service Delivery Channels
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The Marketing Communications Mix
BlogsA new type of online WOM
Media Coverage
Compares, contrasts service offerings from competingorganizations
Advice on best buys
Messages Originating from Outside the Organization
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The Marketing Communications Mix
Poor internal communications between operations andmarketing personnel concerning level of service
performance
Deliberately exaggerated promises to secure sales
Deceptive promotions
Unwanted intrusion by aggressive marketers into peoplespersonal lives
Ethical Issues in Communication
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Role of Corporate Design
Many service firms employ a unified and distinctive visualappearance for all tangible elements
e.g., Logos, uniforms, physical facilities
Provide a recognizable theme linking all the firms
operations use of physical evidence
e.g., BPs bright green and yellow service stations
Use of trademarked symbol as primary logo, with namesecondary
McDonalds Golden Arches
Strategies for Corporate Design
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Role of Corporate Design
International companies need to select designs carefully toavoid conveying a culturally inappropriate message
Easily recognizable corporate symbols important forinternational marketers in markets where:
Local language is not written in Roman Script
Significant portion of population is illiterate
Strategies for Corporate Design
R l f C D i
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Role of Corporate Design
Created FedEx Family of companies consisting of subbrandsfor different services; carried its positive FedEx Express image toother, often low cost services.
FedEx Express
FedEx Ground
FedEx Home Delivery
FedEx Freight
FedEx Custom Critical
FedEx Supply Chain Services
FedEx Kinkos
Each subbrand has different color scheme for second word tocreate differentiation for subbrands, e.g.,
Express is red/orange
Ground is green
FedEx: Use of Company Name In Corporate Design
R l f C D i
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Role of Corporate Design
IMC ties together andreinforces allcommunications to deliver
a strong brand identity
Communications in
different media should formpart of a single, overallmessage about the servicefirm
Developing An Integrated Marketing Communications Strategy
Summary
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Summary Marketing communications adds value through its content
Overcome problems of intangibilityuse metaphors tocommunicate value proposition
Communication planning involves knowing (5Ws)
Marketing communications originate from within theorganization through production and marketing channels
Summary
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Summary Service delivery channels include
Service outlets
Front-line employees
Self-service delivery points
Marketing communications originating from outsideorganization include Word of mouth Blogs Twitter
Media coverage
Corporate design strategies are part and parcel ofcommunication mix
