Services Marketing Unit-6 Service Marketing Strategies MBA-3 rd Sem

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

Service Characteristics Intangible Performance not the object Provide tangible clues Information helps to reduce risk Inseparable Use personnel to educate customers “how it works” Poor information = Nasty surprises Personal information = important Intermediaries In some services Can be very important But not all Perishable Promote specific periods when necessary Issues in communicating services

Use analogy: Accenture Performance / golf UOc7PAhttp:// UOc7PA Tarpon Af19Mhttp:// 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 9YRw4http:// 9YRw4 Singapore Airlines 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 Inform what the company does Educate how it’s done Persuade that the best solution is offered Remind Renewable service Maintain contact Updates Further education Educate employees to deliver all/part communications Develop WOM support

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 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

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 Messages originating outside the organization Production Channels Marketing Channels Front-line staff Service outlets Advertising Sales promotions Direct marketing Personal selling Public relations E-comms. Word of mouth 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

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 Source: Adapted from L. L. Berry ( 2000) Cultivating Services Brand Equity, Journal of the Academy of marketing Science, 28(1), Marketer-controlled communications Firm’s Presented Brand (Sales, Advertising, PR) What Media, Intermediaries, Word-of-Mouth Say re: Firm Customer’s Experience with Firm Awareness of Firm’s Brand Meaning Attached To Firm’s Brand Firm’s Brand Equity Uncontrolled brand communications

Integrated communications SERVICE BRAND IDENTITY Servicescape Design Brand Name And Positioning Marketing Communications Mix Corporate Design Elements Interactive Marketing

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 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 – 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)