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Slide © by Lovelock, Wirtz and Chew 2009 Essentials of Services MarketingChapter 1 - Page 1 CHAPTER 7 Promoting S ERVICES and Educating Customers
Slide © by Lovelock, Wirtz and Chew 2009 Essentials of Services MarketingChapter 1 - Page 2 Specific Roles of Marketing Communications Position and differentiate service Help customer evaluate offerings and highlight differences that matter Promote contribution of personnel and backstage operations Facilitate customer involvement in production Stimulate or dampen demand to match capacity
Slide © by Lovelock, Wirtz and Chew 2009 Essentials of Services MarketingChapter 1 - Page 3 Overcoming Problems of Intangibility May be difficult to communicate service benefits to customers, because of their intangible nature Intangibility creates 4 problems : Generality -Items that comprise a class of objects, persons, or events Non-searchability -Cannot be searched, inspected or used before purchase Abstractness -No one-to-one correspondence with physical objects (i.e. financial services) Mental impalpability -Customers find it hard to grasp benefits of complex, multidimensional or new offerings
Slide © by Lovelock, Wirtz and Chew 2009 Essentials of Services MarketingChapter 1 - Page 4 Overcoming Problems of Intangibility To overcome intangibility Use tangible cues in advertising -Example: paper floor mats in car repairs Use metaphors to communicate benefits of service offerings -Example: Like a good neighbor, State Farm is there…
Slide © by Lovelock, Wirtz and Chew 2009 Essentials of Services MarketingChapter 1 - Page 5 Advertising Strategies for Overcoming Intangibility
Slide © by Lovelock, Wirtz and Chew 2009 Essentials of Services MarketingChapter 1 - Page 6 Checklist for Marketing Communications Planning: The 5 Ws Model 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 communications need to take place?
Slide © by Lovelock, Wirtz and Chew 2009 Essentials of Services MarketingChapter 1 - Page 7 Target Audience: 3 Broad Categories Prospects Employ traditional communication mix because prospects are not known in advance Users More cost effective communication channels Employees Secondary audience for communication campaigns through public media Shape employee behavior Part of internal marketing campaign using company-specific channels
Slide © by Lovelock, Wirtz and Chew 2009 Essentials of Services MarketingChapter 1 - Page 8 Common Educational and Promotional Objectives in Service Settings Create memorable images of specific companies and their brands Build awareness/interest for unfamiliar service/brand Build preference by communicating brand strengths and benefits Reposition service relative to competition Reduce uncertainty/perceived risk by providing useful information, physical evidence and advice
Slide © by Lovelock, Wirtz and Chew 2009 Essentials of Services MarketingChapter 1 - Page 9 Common Educational and Promotional Objectives in Service Settings Provide reassurance (e.g., promote service guarantees) Encourage trial by offering promotional incentives Familiarize customers with service processes before use Teach customers how to use a service to best advantage Stimulate demand in off-peak times, discourage peak time usage Recognize and reward valued customers and employees
Slide © by Lovelock, Wirtz and Chew 2009 Essentials of Services MarketingChapter 1 - Page 10 Marketing Communications Mix for Services
Slide © by Lovelock, Wirtz and Chew 2009 Essentials of Services MarketingChapter 1 - Page 11 Messages through Marketing Channels: Advertising Build awareness, inform, persuade, and remind Challenge: How stand out from the crowd? Yankelovitch study shows 65% of people feel constantly bombarded by ad messages; 59% feel ads have little relevance The problem of Clutter Effectiveness remains controversial Research suggests that less than half of all ads generate a positive return on their investment
Slide © by Lovelock, Wirtz and Chew 2009 Essentials of Services MarketingChapter 1 - Page 12 PR/Publicity involves efforts to stimulate positive interest in an organization and its products e.g., press conferences, news releases, sponsorships Corporate PR specialists teach senior managers how to present themselves well at public events, especially when faced with hostile questioning Unusual activities can present an opportunity to promote companys expertise e.g., FedEx – safely transported two giant pandas from Chengdu, China, to the National Zoo in Washington, D.C. in a FedEx aircraft renamed FedEx PandaOne. Messages through Marketing Channels: Public Relations
Slide © by Lovelock, Wirtz and Chew 2009 Essentials of Services MarketingChapter 1 - Page 13 On-demand technologies empower consumers to decide how and when they prefer to be reached, and by whom e.g. TIVO, spam filters, pop-up blockers, podcasting Permission Marketing (Seth Godin) customers to volunteer their attention Enables firms to build strong relationships with customers e.g., People invited to register at a firms website and specify what type of information they like to receive via Consumers Can Filter Promotions
Slide © by Lovelock, Wirtz and Chew 2009 Essentials of Services MarketingChapter 1 - Page 14 Messages through Marketing Channels: Sales Promotion Defined as Communication that comes with an incentive Should be specific to a time period, price, or customer group Motivates customers to use a specific service sooner, in greater volume with each purchase, or more frequently Interesting sales promotions can generate attention and put firm in favorable light (especially if interesting results are publicized) e.g. SAS International Hotels – If a hotel had vacant rooms, guests over 65 years old could get a discount equivalent to their years Dennys Free Breakfast on Superbowl Sunday
Slide © by Lovelock, Wirtz and Chew 2009 Essentials of Services MarketingChapter 1 - Page 15 Messages through Marketing Channels: Trade Shows Popular in b2b marketplace; some b2c shows Stimulate extensive media coverage Many prospective buyers come to shows Opportunity to learn about latest offerings from wide variety of suppliers Sales rep who usually reaches four to five potential customer per day may be able to get five qualified leads per hour at a show Shows youre a player
Slide © by Lovelock, Wirtz and Chew 2009 Essentials of Services MarketingChapter 1 - Page 16 Messages through the Internet: Online Advertising Banner advertising Search engine advertising (a.k.a. Paid Search) Reverse advertising: search engines let advertisers know exactly what consumer wants through their keyword search Can target relevant messages directly to desired consumers Several 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 -Google AdWords and AdSense
Slide © by Lovelock, Wirtz and Chew 2009 Essentials of Services MarketingChapter 1 - Page 17 Messages through Service Delivery Channels Customer service employees New customers in particular need help from service personnel Service outlets Banners, posters, signage, brochures, video screens, audio etc. Self-service delivery points ATMs, vending machines, kiosks and websites are examples
Slide © by Lovelock, Wirtz and Chew 2009 Essentials of Services MarketingChapter 1 - Page 18 Messages Originating from Outside the Organization Word of Mouth (WOM) Recommendations from other customers viewed as more credible than companys recommendations Strategies to stimulate positive WOM: -Having satisfied customers who provide positive comments -Courting opinion leaders -Creating exciting promotions that get people talking -Developing referral incentive schemes
Slide © by Lovelock, Wirtz and Chew 2009 Essentials of Services MarketingChapter 1 - Page 19 Messages Originating from Outside the Organization Blogs and Social Media – A new type of online WOM Becoming increasingly popular Communications about customer experiences influence opinions of brands and products Some firm have started to monitor blogs as form of market research and feedback Media Coverage Compares, contrasts service offerings from competing organizations Advice on best buys
Slide © by Lovelock, Wirtz and Chew 2009 Essentials of Services MarketingChapter 1 - Page 20 Ethical Issues in Communication Advertising, selling, and sales promotion all lend themselves easily to misuse, deception and fraud Communication messages often include promises about benefits and quality of service delivery which are not fulfilled Why are expectations not met? Poor internal communications between operations and marketing personnel concerning level of service performance Over promise to get sales Deceptive promotions Unwanted intrusion by aggressive marketers into peoples personal lives: i.e. tele-marketing, SPAM, junk-mail
Slide © by Lovelock, Wirtz and Chew 2009 Essentials of Services MarketingChapter 1 - Page 21 Strategies for Corporate Design Employ a unified and distinctive visual appearance for all tangible elements e.g. Logos, uniforms, physical facilities Provide recognition and strengthen brand image e.g., BPs bright green-and yellow service stations Stand out from the crowd and be instantly recognizable in different locations McDonalds Golden Arches
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