Developing the Service Communication Strategy Chapter 7 Developing the Service Communication Strategy

Chapter Objectives Discuss the steps necessary to manage the firm’s service communication strategy effectively. Understand the special challenges associated with developing service communications. Describe specific guidelines for developing service communications. Appreciate the special considerations faced by professional service providers and recommend solutions to overcome these challenges. ©2011 Cengage Learning. All rights reserved.

Opening Vignette: Geico GEICO offers a classic illustration that as environmental forces change the course of a company’s overall marketing strategy, the service firm’s communication strategy should adapt to fit changing business conditions. ©2011 Cengage Learning. All rights reserved.

Communication Mix Personal Selling Sales Promotions Publicity and Relations Advertising Sponsorships ©2011 Cengage Learning. All rights reserved.

Figure 7.1 Managing the Service Communication Strategy Selecting Target Markets Establishing Communication Objectives Setting the Communication Budget Formulating the Positioning Strategy Establishing Message and Media Strategies Monitoring, Evaluating and Controlling the Communication Strategy ©2011 Cengage Learning. All rights reserved.

Figure 7.2 PLC Stage and Communication Objectives Informational Informational and persuasive Persuasive and reminder Communication Tactics Introduce the service offering Create brand awareness Prepare the way for personal selling efforts Encourage trial Create a positive attitude relative to competitive offerings Provoke an immediate buying action Enhance the firm’s image Encourage repeat purchases Provide ongoing contact Express gratitude to existing customer base Confirm past purchase decisions Product Life Cycle Stage Introduction Growth and maturity Maturity and decline ©2011 Cengage Learning. All rights reserved.

Figure 7.3 Budget Techniques Budget Setting Technique Description Top-down budgeting Set by upper management Bottom-up budgeting Set by the product level or brand manager Bottom-up/Top-down budgeting Set by the product level and then revised by upper management Top-down/Bottom-up budgeting Set by upper management and then revised by product level Percentage-of-sales Set based on a percentage of the previous year’s sales Incremental Increased by a fixed percent every year All-you-can-afford approach Set based on what is left over after the firm pays for operating expenses and planned profits Competitive Parity Set based on promotional spending behavior demonstrated by the competition Objective-and-Task method Set based on the amount necessary to achieve stated communication objectives ©2011 Cengage Learning. All rights reserved.

Figure 7.4 Differentiation Approaches for Effective Positioning Source: Adapted from Philip Kotler, Marketing Management, 9th ed. (Englewood Cliffs, NJ: Prentice-Hall, 1997), p. 283. Product Differentiation Personnel Differentiation Image Differentiation Service Differentiation Features Performance Conformance Durability Reliability Repairability Design (integrates the above) Symbols Written, audio/visual media Atmosphere Events Competence Courtesy Credibility Responsiveness Communication Style Delivery (speed, accuracy) Installation Customer training Consulting service Repair Miscellaneous service ©2011 Cengage Learning. All rights reserved.

Media Strategies for Targeting Users Type 1 Staff Deal with customers quickly and effectively “once only” situations Type 2 Staff Requires some independent decision making More intense communication than Type 1 Type 3 Staff Tasks are complex and often nonrepeatable ©2011 Cengage Learning. All rights reserved.

Figure 7.1 Managing the Service Communication Strategy Selecting Target Markets Establishing Communication Objectives Setting the Communication Budget Formulating the Positioning Strategy Establishing Message and Media Strategies Monitoring, Evaluating and Controlling the Communication Strategy ©2011 Cengage Learning. All rights reserved.

Special Challenges Associated with the Service Communication Strategy Mistargeted Communications Managing Expectations & Perceptions Technical service quality Advertising to Employees Selling/Operations Conflicts ©2011 Cengage Learning. All rights reserved.

Specific Guidelines for Developing Service Communications Develop a word-of-mouth communications network Promise what is possible Tangibilize the intangible Feature working relationships between customer and provider ©2011 Cengage Learning. All rights reserved.

Figure 7.5 The Impact of Intangibility: Different Communication Strategies for Different Products Tangible dominant Tangible evidence Perfume Fast food outlets Insurance Intangible dominant Intangible image Source: Adapted from G. Lynn Shostack, “Breaking Free from Product Marketing,” The Journal of Marketing (April 1977). ©2011 Cengage Learning. All rights reserved.

Specific Guidelines for Developing Service Communications Reduce consumer fears about variation in performance Determine and focus on service quality dimensions Differentiate the service product from service delivery Make the service more easily understood ©2011 Cengage Learning. All rights reserved.

Special Consideration for Professional Service Providers Third-party accountability Client uncertainty Experience is essential Limited differentiability Maintaining quality control ©2011 Cengage Learning. All rights reserved.

Special Consideration for Professional Service Providers Turning doers into sellers Dividing the professional’s time between marketing and operations Tendencies to be reactive rather than proactive The effects of advertising are unknown Limited marketing knowledge base ©2011 Cengage Learning. All rights reserved.

Communications Tips for Professional Service Providers Turn current clients into company spokespersons First impressions are everything Create visual pathways that reflect quality Establish regular communications with clients Develop a firm brochure An informed office staff is vital ©2011 Cengage Learning. All rights reserved.

Copyright © 2011 Cengage Learning. All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of the publisher. Printed in the United States of America. Copyright © 2011 Cengage Learning.   ©2011 Cengage Learning. All rights reserved.