Overview of Chapter 7

Services Marketing Services Marketing

 Role of Marketing Communications

Chapter 7:  Challenges of Services Communications

Promoting Services  Marketing Communications Planning
and Educating
Customers  The Marketing Communications Mix

 Role of Corporate Design

 Integrating Marketing Communications

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Specific Roles of Marketing

Communications
Services Marketing Services Marketing

 Position and differentiate service

 Help customer evaluate offerings and highlight differences

that matter
Role of Marketing  Promote contribution of personnel and backstage
operations
Communications
 Add value through communication content

 Facilitate customer involvement in production

 Stimulate or dampen demand to match capacity

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Help Customers to Evaluate Promote Contributions of

Service Offerings Service Personnel
Services Marketing Services Marketing

 Customers may have difficulty distinguishing one firm from  Frontline personnel are central to service delivery in high-
another contact services
 Provide tangible clues related to service performance  Make the service more tangible and personalized

 Some performance attributes lend themselves better to  Show customers work performed behind the scenes to
advertising than others ensure good delivery
 e.g., Airlines  To enhance trust, highlight expertise and commitment of
employees
 Firm’s expertise is hidden in low-contact services  Advertisements must be realistic
 Need to illustrate equipment, procedures, employee activities that
 Messages help set customers’ expectations
take place backstage
 Service personnel should be informed about the content of new
advertising campaigns or brochures before launch
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 Facilitate Customer Involvement Stimulate or Dampen Demand to
in Production Match Capacity
Services Marketing Services Marketing

 Customers are actively involved in service production; they  Live service performances are time-specific and can’t be
need training to perform well stored for resale at a later date
 Advertising and sales promotions can change timing of customer
 Show service delivery in action use

 Television and videos engage viewer  Examples of demand management strategies:

 e.g., Dentists showing patients videos of surgical procedures
 Reducing usage during peak demand periods
before surgery
 Stimulating demand during off-peak period
 Streaming videos on web and podcasts are new channels to
reach active customers

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Overcoming Problems of
Intangibility
Services Marketing Services Marketing

 Intangibility creates 4 problems:

 Generality
- Items that comprise a class of objects, persons, or events

Challenges of Services  Abstractness

- No one-to-one correspondence with physical objects
Communications  Non-searchability
- Cannot be searched or inspected before purchase
 Mental impalpability
- Customers find it hard to grasp benefits of complex,
multi-dimensional new offerings

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Overcoming Problems of Advertising Strategies for

Intangibility Overcoming Intangibility
Services Marketing Services Marketing

 To overcome intangibility
 Use tangible cues in advertising
 Use metaphors

 Tangible metaphors help to communicate benefits of

service offerings, e.g.,
 Allstate – “You’re in good hands”
 Prudential Insurance – uses Rock of Gibraltar as symbol of
corporate strength

 Metaphors communicate value propositions more

dramatically and emphasize key points of difference
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 Checklist: The “5 Ws” Model
Services Marketing Services Marketing

 Who is our target audience?

 What do we need to communicate and achieve?

Marketing Communications  How should we communicate this?

Planning  Where should we communicate this?

 When do communications need to take place?

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Target Audience: 3 Broad Educational and Promotional

Categories Objectives in Service Settings
Services Marketing Services Marketing

 Prospects  Create memorable images of specific companies and their

 Employ traditional communication mix because prospects are not brands
known in advance
 Build awareness and interest for unfamiliar service
 Users
 Compare service favorably with competitors’ offerings
 More cost effective channels utilized
 Build preference by communicating strengths and benefits
 Employees
 Secondary audience for communication campaigns  Reposition service relative to competition
 Shape behavior  Reduce uncertainty or perceived risk by providing useful
 Part of internal marketing campaign using company-specific info and advice
channels

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Educational and Promotional Educational and Promotional

Objectives in Service Settings Objectives in Service Settings
Services Marketing Services Marketing

 Provide reassurance (e.g., promote service guarantees)

Create memorable Compare service Build preference by
 Encourage trial by offering promotional incentives images of specific
Build awareness
and interest for
favorably with communicating
companies and competitors’ strengths and
unfamiliar service
their brands offerings benefits
 Familiarize customers with service processes before use
 Teach customers how to use a service to best advantage
Reduce uncertainty Provide
Reposition service Encourage trial by
or perceived risk by reassurance (e.g.,
relative to offering promotional
 Stimulate demand in off-peak, discourage during peak competition
providing useful info
and advice
promote service
guarantees)
incentives

 Recognize and reward valued customers and employees

Familiarize Teach customers Stimulate demand Recognize and
customers with how to use a in off-peak, reward valued
service processes service to best discourage during customers and
before use advantage peak employees

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 Marketing Communications Mix
for Services
Services Marketing Services Marketing

The Marketing
Communications Mix

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Sources of Messages Received by

Traditional Marketing Channels
Target Audience
Services Marketing Services Marketing
Channel Aim Challenges
Advertising: Done via Build awareness, inform, Needs to be unique as less
media channels persuade, and remind than half of all ads generate a
positive ROI

Public relations: Efforts Builds reputation and credibility Form relationships with its
to stimulate positive to secure an image conducive employees, customers, and
interest through third to conduct business the community
parties

Direct Marketing such Send personalized messages Advance in on-demand

as mail, e-mail & text to highly targeted micro- technologies (e.g., spam
messages segments; use permission filters, cookie busters, pop-up
marketing where customers blockers) empower
“raise their hands” and agree consumers to decide how and
to learn more about a company when they prefer to be
and its products reached, and by whom
Source: Adapted from a diagram by Adrian Palmer, Principles of Services Marketing, London: McGraw-Hill,4th ed., 2005, p. 397
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Internet Marketing Offers Powerful

Traditional Marketing Channels
Opportunities
Services Marketing Services Marketing
Channel Aim Challenges
Sales Promotion: Generate attention and Motivating customers to use a
 Supplement traditional marketing channels at a reasonable
Communication attached to speed up introduction service sooner, in greater cost
an incentive that is specific and acceptance of new volume, or more frequently
to a period of time, price, or services especially during periods when
customer group demand would be weak
 Part of an integrated, well-designed communications
strategy
Personal Selling: Educate customers and Relationship marketing strategies
Common in b2b and promote preferences for based on account management  Can market through the company’s own website or through
infrequently purchased particular brand or programs incur high staffing
services product costs; telemarketing is a lower online advertising
cost alternative
Trade Shows Stimulate extensive Opportunity to learn about latest
media coverage with offerings from wide array of
many prospective buyers suppliers

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 Effective Advertising on Internet:
Website Design Considerations
Banner Advertising
Services Marketing Services Marketing

 Used for a variety of  Design should address Banner Advertising: Placing advertising banners and buttons
communication tasks attributes that affect website on portals such as Yahoo and other firms’ websites to draw
 Promoting consumer “stickiness” online traffic to own site
awareness and interest  High in quality content
 Providing information and  Ease of use  Easy for advertisers to measure how many visits to its own
consultation website are generated by click-throughs
 Quick to download
 Facilitating 2-way
communication  Frequency of update
 Limitations
 Stimulating product trial  Obtaining many exposures does not necessarily lead to increase in
 Memorable Web address helps
 Enabling customers to place awareness, preference, or sales
attract visitors to the site
orders  Fraudulent click-throughs designed to boost apparent effectiveness

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Effective Advertising on Internet: Messages Transmitted through

Search Engine Advertising Service Delivery Channels
Services Marketing Services Marketing

Search Engine Advertising (Reverse broadcast network): • Messages reach customers through the
search engines let advertisers know exactly what consumer Service outlets service delivery environment
• Servicescape: Physical design
wants through their keyword search
• Shape customer’s perceptions
 Target relevant messages directly to desired consumers Front-line • Delivers supplementary services
employees • Cross-selling of additional services
 Advertising options:
 Pay for targeted placement of ads to relevant keyword searches • ATM, vending machines and websites
 Sponsor a short text message with a click-through link Self-service • Require clear signage and instructions on
 Buy top rankings in the display of search results delivery points how to use the service

 E.g., Google – The New Online Marketing Powerhouse via Customer • Familiarize customers with service
Adsense and Adwords product and teach them how to use it to
training their best advantage

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Messages Originating from Outside Messages Originating from Outside

the Organization the Organization
Services Marketing Services Marketing

 Word of Mouth (WOM)  Blogs – A new type of online WOM

 Recommendations from other customers viewed as more credible
 Twitter
 Strategies to stimulate positive WOM:
 Media Coverage
 Creating exciting promotions that get people talking about firm’s
great service  Compares, contrasts service offerings from competing
organizations
 Offering promotions that encourage customers to persuade others
 Advice on “best buys”
 Developing referral incentive schemes
 Referencing other purchasers and knowledgeable individuals
 Presenting and publicizing testimonials

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 Ethical Issues in Communication
Services Marketing Services Marketing

 Poor internal communications between operations and

marketing personnel concerning level of service
performance

 Deliberately exaggerated promises to secure sales

Role of Corporate Design
 Deceptive promotions

 Unwanted intrusion by aggressive marketers into people’s

personal lives

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Strategies for Corporate Design Strategies for Corporate Design

Services Marketing Services Marketing

 Many service firms employ a unified and distinctive visual  International companies need to select designs carefully to
appearance for all tangible elements avoid conveying a culturally inappropriate message
 e.g., Logos, uniforms, physical facilities
 Easily recognizable corporate symbols important for
 Provide a recognizable theme linking all the firm’s international marketers in markets where:
operations use of physical evidence  Local language is not written in Roman Script
 e.g., BP’s bright green and yellow service stations  Significant portion of population is illiterate

 Use of trademarked symbol as primary logo, with name

secondary
 McDonald’s “Golden Arches”

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FedEx: Use of Company Name In Developing An Integrated Marketing

Corporate Design Communications Strategy
Services Marketing Services Marketing

 Created “FedEx Family of companies” consisting of subbrands  IMC ties together and
for different services; carried its positive FedEx Express image to reinforces all
other, often low cost services. communications to deliver
 FedEx Express  FedEx Custom Critical a strong brand identity
 FedEx Ground  FedEx Supply Chain Services
 Communications in
 FedEx Home Delivery  FedEx Kinko’s
different media should form
 FedEx Freight
part of a single, overall
message about the service
 Each subbrand has different color scheme for second word to firm
create differentiation for subbrands, e.g.,
 Express is red/orange
 Ground is green

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 Summary Summary
Services Marketing Services Marketing

 Marketing communications adds value through its content  Service delivery channels include
 Service outlets
 Overcome problems of intangibility – use metaphors to  Front-line employees
 Self-service delivery points
communicate value proposition
 Marketing communications originating from outside
 Communication planning involves knowing (5Ws)
organization include
 Word of mouth
 Marketing communications originate from within the  Blogs
organization through production and marketing channels  Twitter
 Media coverage

 Corporate design strategies are part and parcel of

communication mix
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