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Services Marketing
Unit-6
Service Marketing Strategies
MBA-3rd Sem-2009-2011
• Formulating service marketing strategies
• Designing communications mix for
promoting services
• Role of information technology in
marketing of services
Learning Objectives
• To understand the general role of
communications in services marketing
• Understand the effective use of
communications channels
• To understand the role of corporate
design/brand within marketing
communication strategy
• To understand the use of Internet in
communicating services
Issues in communicating
services
Intangible
Performance not the object
Provide tangible clues
Information helps to
reduce risk
Intermediaries
In some services
Can be very important
But not all
Service
Characteristics
Inseparable
Use personnel to
educate customers
“how it works”
Poor information =
Nasty surprises
Personal information =
important
Perishable
Promote specific
periods when
necessary
• Use analogy: Accenture Performance /
golf
• http://www.youtube.com/watch?v=w3NKM
UOc7PA
• Tarpon
• http://www.youtube.com/watch?v=4hv_V_
Af19M
Communications Challenges
in Services Marketing
• Facilitate customer involvement in production
– prepare customers for service experience and demonstrate roles
– teach customers about new technologies, new features
• Help customers to evaluate service offerings
– provide tangible or statistical clues to service performance
– highlight quality of equipment and facilities
– emphasize employee qualifications, experience, professionalism
• Stimulate or dampen demand to match capacity
– provide information about timing of peak, off-peak periods
– offer promotions to stimulate off-peak demand
• Promote contribution of service personnel
– help customers understand service encounter
– highlight expertise and commitment of backstage
personnel
People as communication platform
Virgin Atlantic vs. Singapore airlines
• http://www.youtube.com/watch?v=EPIjCS
9YRw4
• Singapore Airlines
http://www.youtube.com/watch?v=ykSBMqff
uQ8
Goods v Services
Implications for communications strategy
• Provide tangible clue/evidence
• Educate and train customers to use and to
evaluate services
• Help manage demand levels to match firm’s
capacity
• Reduced communication role for intermediaries
• Importance of contact personnel requires
internal communication to inform, motivate and
create role models
Education as part of communications
Educate employees
to deliver
all/part
communications
Inform
what the
company does
Educate
how it’s done
Develop
WOM support
Maintain contact
Updates
Further education
Remind
Renewable service
Persuade
that the best
solution is
offered
Common educational and
promotional objectives
Create tangible, memorable images
Build awareness and interest to stimulate trial
Communicate brand’s strength and benefits
Counter competitive claims
Reposition service relative to competition
Teach customers how to use the service
Manage demand levels
Reduce uncertainty by providing useful
information and advice
Provide reassurance (eg service guarantees)
Recognise and reward valued customers
SMART objectives
The 5W’s model for communication plan
• Who is our target audience?
• What do we need to communicate and
achieve?
• hoW should we communicate this?
• Where should we communicate this?
• When do the communications need to take
place?
The integrated services
communications mix
Messages originating
within the organization
Front-line staff
Service outlets
Advertising
Sales promotions
Direct marketing
Personal selling
Public relations
E-comms.
Word of mouth
Messages originating
outside the organization
Media editorial
A
U
D
I
E
N
C
E
Word of Mouth
• Perceived as more credible than firm-initiated
promotional activities
• Have a powerful influence on people’s
purchasing decision
• The higher the risk the more important for WoM
• Less knowledgeable customers rely more on
WoM
• Dissatisfied customers are more likely to pass
negative WoM than satisfied customers
• Indicator for profitability (Reichheld, 2003)
WoM (con.)
• Stimulate positive and persuasive comments from
existing customers by:
–
–
–
–
Referencing other purchasers and knowledgeable individuals
Create Buzz – exciting promotion, events
Developing referral incentive scheme
Publicising testimonials that simulate WoM
• Internet is ubiquitous & openly accessible, it has
accelerated the spread of personal influence which
evolves into a “viral marketing” phenomenon. e.g. blogs
• http://blogs.ebay.com/
• http://www.suspendedfromebay.com/
What is Brand Equity and Why Does It Matter?
(From Berry, “Cultivating Brand Equity”)
Definition: A set of assets and liabilities linked to a brand’s name
and symbol that adds to (or subtracts from) the perceived value
of the product
• Brand equity can be positive or negative
• Positive brand equity creates marketing advantage for
firm plus value for customer
• Perceived value generates preference and loyalty
• Management of brand equity involves investment to
create and enhance assets, remove liabilities
Corporate design, name, colour,
image -recognizable symbols
A Service Branding Model:
How Communications + Experience Create Brand Equity
Marketer-controlled communications
Firm’s Presented Brand
(Sales, Advertising, PR)
Awareness of
Firm’s Brand
Uncontrolled brand communications
Firm’s
Brand Equity
What Media, Intermediaries,
Word-of-Mouth Say re: Firm
Customer’s Experience
with Firm
Meaning Attached
To Firm’s Brand
Source: Adapted from L. L. Berry ( 2000)
Cultivating Services Brand Equity, Journal of the
Academy of marketing Science, 28(1), 128-137
Integrated communications
Corporate
Design Elements
Servicescape
Design
SERVICE
BRAND
IDENTITY
Brand Name
And Positioning
Interactive
Marketing
Marketing
Communications
Mix
Marketing Communication and the
Internet
• International in Scope
– Accessible from almost anywhere in the world
– Simplest form of international market entry
• Internet Applications
– Promote consumer awareness and interest
– Provide information and consultation
– Facilitate 2-way communications through e-mail and chat
rooms
– Stimulate product trial
– Enable customers to place orders
– Measure effectiveness of specific advertising/promotional
campaigns
Marketing Communications and the
Internet
• Web Site design considerations
–
–
–
–
–
–
Memorable address that is actively promoted
Relevant, up-to-date content (text, graphics, photos)
Contain information that target users will perceive as useful/interesting
Easy navigation
Fast download
http://www.youtube.com/watch?v=9EQeFq2he4U&feature=related
• Internet advertising
– Banners and buttons on portals and other websites seek to draw online
traffic to own site
– Limits to effectiveness—exposure may not lead to increases in
awareness/preference/sales
– Hence, advertising contracts may tie fees to marketing relevant behavior
(e.g., giving personal info or making purchase)