Services Marketing

Chapter 7:
Promoting Services
and Educating
Customers

Slide © 2010 by Lovelock & Wirtz Services Marketing 7/e Chapter 7 – Page 1
 Overview of Chapter 7
Services Marketing

 Role of Marketing Communications

 Challenges of Services Communications

 Marketing Communications Planning

 The Marketing Communications Mix

 Role of Corporate Design

 Integrating Marketing Communications

Slide © 2010 by Lovelock & Wirtz Services Marketing 7/e Chapter 7 – Page 2
 Services Marketing

Role of Marketing
Communications

Slide © 2010 by Lovelock & Wirtz Services Marketing 7/e Chapter 7 – Page 3
 Specific Roles of Marketing
Communications
Services Marketing

 Position and differentiate service

 Help customer evaluate offerings and highlight differences

that matter

 Promote contribution of personnel and backstage

operations

 Add value through communication content

 Facilitate customer involvement in production

 Stimulate or dampen demand to match capacity

Slide © 2010 by Lovelock & Wirtz Services Marketing 7/e Chapter 7 – Page 4
 Help Customers to Evaluate
Service Offerings
Services Marketing

 Customers may have difficulty distinguishing one firm from

another
 Provide tangible clues related to service performance

 Some performance attributes lend themselves better to

advertising than others
 e.g., Airlines

 Firm’s expertise is hidden in low-contact services

 Need to illustrate equipment, procedures, employee activities that
take place backstage

Slide © 2010 by Lovelock & Wirtz Services Marketing 7/e Chapter 7 – Page 5
 Promote Contributions of
Service Personnel
Services Marketing

 Frontline personnel are central to service delivery in high-

contact services
 Make the service more tangible and personalized

 Show customers work performed behind the scenes to

ensure good delivery
 To enhance trust, highlight expertise and commitment of
employees
 Advertisements must be realistic
 Messages help set customers’ expectations
 Service personnel should be informed about the content of
new advertising campaigns or brochures before launch
Slide © 2010 by Lovelock & Wirtz Services Marketing 7/e Chapter 7 – Page 6
 Facilitate Customer Involvement
in Production
Services Marketing

 Customers are actively involved in service production; they

need training to perform well

 Show service delivery in action

 Television and videos engage viewer

 e.g., Dentists showing patients videos of surgical procedures
before surgery

 Streaming videos on web and podcasts are new channels to

reach active customers

Slide © 2010 by Lovelock & Wirtz Services Marketing 7/e Chapter 7 – Page 7
 Stimulate or Dampen Demand to
Match Capacity
Services Marketing

 Live service performances are time-specific and can’t be

stored for resale at a later date
 Advertising and sales promotions can change timing of customer
use

 Examples of demand management strategies:

 Reducing usage during peak demand periods
 Stimulating demand during off-peak period

Slide © 2010 by Lovelock & Wirtz Services Marketing 7/e Chapter 7 – Page 8
 Services Marketing

Challenges of Services
Communications

Slide © 2010 by Lovelock & Wirtz Services Marketing 7/e Chapter 7 – Page 9
 Overcoming Problems of
Intangibility
Services Marketing

 Intangibility creates 4 problems:

 Generality
- Items that comprise a class of objects, persons, or
events
 Abstractness
- No one-to-one correspondence with physical
objects
 Non-searchability
- Cannot be searched or inspected before purchase
 Mental impalpability
- Customers find it hard to grasp benefits of complex,
multi-dimensional new offerings

Slide © 2010 by Lovelock & Wirtz Services Marketing 7/e Chapter 7 – Page 10
 Overcoming Problems of
Intangibility
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
Slide © 2010 by Lovelock & Wirtz Services Marketing 7/e Chapter 7 – Page 11
 Advertising Strategies for
Overcoming Intangibility
S ervvri•cc M arkkeettii
ees nngg
Intangibility Advertising Strategy Description
Problem Physical Show Physical Components of
I ncorporeel Representation Service
rG enera lity:
Existence
• For objective System documentation Objectively document physical system
claims Performance capacity
documentation Document and cite past performance
• For suhja ctive Servi ce perform a nee statistics
claims episode
Non- Consumption Obtain
Piresentand present service
an actual customer
delivery
searchability Reputation
documentation Cite independently
testimonials
incident audited
documentation performa nee
Abstract n B! Servi ce consumption Ga ptura and display typical customers benB!fiting
SS episode fmrn the service
lmpalpabili Service process Present a vivid documentary on the step-by-step
ty episode service process
Case history episode Present an actual case history of what the firm did
Service consumption for a specific
episode experienc
client
e
An articulate narration or depiction of a customer's
subjective
Banwari l\ilinal and Julie Baker. Advertising strategies for hospitality servioos ..
Admim"stration
Comell Hot.el andf?estoora(jt
auartedy, 43 !April 2002]: 53. D:Jpyrfght D:Jrnell Unfverslty. All rights
rera""''!Bd. Used by permission,

Slide © 2010 by Lovelock & Wirtz Services Marketing 7/e Chapter 7 – Page 12
 Services Marketing

Marketing Communications
Planning

Slide © 2010 by Lovelock & Wirtz Services Marketing 7/e Chapter 7 – Page 13
 Checklist: The “5 Ws” Model
Services Marketing

 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 © 2010 by Lovelock & Wirtz Services Marketing 7/e Chapter 7 – Page 14
 Target Audience: 3 Broad
Categories
Services Marketing

 Prospects
 Employ traditional communication mix because prospects are not
known in advance

 Users
 More cost effective channels utilized

 Employees
 Secondary audience for communication campaigns
 Shape behavior
 Part of internal marketing campaign using company-
specific channels

Slide © 2010 by Lovelock & Wirtz Services Marketing 7/e Chapter 7 – Page 15
 Educational and Promotional
Objectives in Service Settings
Services Marketing

 Create memorable images of specific companies and their

brands

 Build awareness and interest for unfamiliar service

 Compare service favorably with competitors’ offerings
 Build preference by communicating strengths and benefits
 Reposition service relative to competition

 Reduce uncertainty or perceived risk by providing useful

info and advice

Slide © 2010 by Lovelock & Wirtz Services Marketing 7/e Chapter 7 – Page 16
 Educational and Promotional
Objectives in Service Settings
Services Marketing

 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, discourage during peak
 Recognize and reward valued customers and employees

Slide © 2010 by Lovelock & Wirtz Services Marketing 7/e Chapter 7 – Page 17
 Services Marketing

The Marketing
Communications Mix

Slide © 2010 by Lovelock & Wirtz Services Marketing 7/e Chapter 7 – Page 19
 Marketing Communications Mix
for Services
S ervvri•cc M arkkeettii
ees nngg
- -
Persona Advertising Sale Publicity Instruction Corporate esign
l s & alMaterial
- -- D
Communic Promo Public s
ations tion Relations
Prres
Sellin Broadcast Sa~pling Web sites - Sign age
s
g
releases
/kits
Custom Prass
Print Coupon Manuals - Interi Dec
er confere
m or
Servi nces
ce
Internet Sign- Vehicles
lFraini Special Brochures
up
ng events
rebat
es
- Video-
Telemarketi Outdoor Gift Sponsorsh Eqwip~ent
s audiocassett
ng ip
es
Priz Tirade -
* Word of Direc Mai Stationery
e shows,
mouth t l
promo Exhibition Software
tions s
* Media- CD-ROM
llnifurns
ini1iated -
coverage s
Key: * communicatio miginating from outside the organizatio
Denotes ns n Voice mail
-
Slide © 2010 by Lovelock & Wirtz Services Marketing 7/e Chapter 7 – Page 20
 Sources of Messages Received by
Target Audience
Services Marketing

Source: Adapted from a diagram by Adrian Palmer, Principles of Services Marketing, London: McGraw-Hill,4th ed., 2005, p. 397
Slide © 2010 by Lovelock & Wirtz Services Marketing 7/e Chapter 7 – Page 21
 Traditional Marketing Channels
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

Slide © 2010 by Lovelock & Wirtz Services Marketing 7/e Chapter 7 – Page 22
 Traditional Marketing Channels
Services Marketing
Channel Aim Challenges
Sales Promotion: Generate attention and Motivating customers to use a
Communication attached to speed up introduction service sooner, in greater
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

Personal Selling: Educate customers and Relationship marketing strategies

Common in b2b and promote preferences for based on account management
infrequently purchased particular brand or programs incur high staffing
services product costs; telemarketing is a lower
cost alternative
Trade Shows Stimulate extensive Opportunity to learn about latest
media coverage with offerings from wide array of
many prospective buyers suppliers

Slide © 2010 by Lovelock & Wirtz Services Marketing 7/e Chapter 7 – Page 23
 Internet Marketing Offers Powerful
Opportunities
Services Marketing

 Supplement traditional marketing channels at a reasonable

cost

 Part of an integrated, well-designed communications

strategy

 Can market through the company’s own website or through

online advertising

Slide © 2010 by Lovelock & Wirtz Services Marketing 7/e Chapter 7 – Page 24
 Website Design Considerations
Services Marketing

 Used for a variety of  Design should address

communication tasks attributes that affect website
 Promoting consumer
“stickiness”
awareness and interest  High in quality content
 Providing information and  Ease of use
consultation
 Quick to download
 Facilitating 2-way
 Frequency of update
communication
 Stimulating product trial
 Memorable Web address helps
 Enabling customers to place attract visitors to the site
orders

Slide © 2010 by Lovelock & Wirtz Services Marketing 7/e Chapter 7 – Page 25
 Effective Advertising on Internet:
Banner Advertising
Services Marketing

Banner Advertising: Placing advertising banners and buttons

on portals such as Yahoo and other firms’ websites to draw
online traffic to own site

 Easy for advertisers to measure how many visits to its own

website are generated by click-throughs

 Limitations
 Obtaining many exposures does not necessarily lead to increase in
awareness, preference, or sales
 Fraudulent click-throughs designed to boost apparent effectiveness

Slide © 2010 by Lovelock & Wirtz Services Marketing 7/e Chapter 7 – Page 26
 Effective Advertising on Internet:
Search Engine Advertising
Services Marketing

Search Engine Advertising (Reverse broadcast network):

search engines let advertisers know exactly what consumer
wants through their keyword search

 Target relevant messages directly to desired consumers

 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

 E.g., Google – The New Online Marketing Powerhouse via

Adsense and Adwords

Slide © 2010 by Lovelock & Wirtz Services Marketing 7/e Chapter 7 – Page 27
 Messages Transmitted through
Service Delivery Channels
Services Marketing

• Messages reach customers through the

Service outlets service delivery environment
• Servicescape: Physical design

Front-line • Shape customer’s perceptions

• Delivers supplementary services
employees • Cross-selling of additional services

Self-service • ATM, vending machines and websites

• Require clear signage and instructions on
delivery how to use the service
points
• Familiarize customers with service
product and teach them how to use it to
Customer their best advantage
training Services Marketing 7/e Chapter 7 – Page 28
Slide © 2010 by Lovelock & Wirtz
 Messages Originating from Outside
the Organization
Services Marketing

 Word of Mouth (WOM)

 Recommendations from other customers viewed as more credible

 Strategies to stimulate positive WOM:

 Creating exciting promotions that get people talking about firm’s
great service
 Offering promotions that encourage customers to persuade
others

Developing referral incentive schemes

Referencing other purchasers and knowledgeable individuals

Presenting and publicizing testimonials

Slide © 2010 by Lovelock & Wirtz Services Marketing 7/e Chapter 7 – Page 29
 Messages Originating from Outside
the Organization
Services Marketing

 Blogs – A new type of online WOM

 Twitter

 Media Coverage
 Compares, contrasts service offerings from competing
organizations
 Advice on “best buys”

Slide © 2010 by Lovelock & Wirtz Services Marketing 7/e Chapter 7 – Page 30
 Ethical Issues in Communication
Services Marketing

 Poor internal communications between operations and

marketing personnel concerning level of service
performance

 Deliberately exaggerated promises to secure sales

 Deceptive promotions

 Unwanted intrusion by aggressive marketers into people’s

personal lives

Slide © 2010 by Lovelock & Wirtz Services Marketing 7/e Chapter 7 – Page 31
 Services Marketing

Role of Corporate Design

Slide © 2010 by Lovelock & Wirtz Services Marketing 7/e Chapter 7 – Page 32
 Strategies for Corporate Design
Services Marketing

 Many service firms employ a unified and distinctive visual

appearance for all tangible elements
 e.g., Logos, uniforms, physical facilities

 Provide a recognizable theme linking all the firm’s

operations use of physical evidence
 e.g., BP’s bright green and yellow service stations

 Use of trademarked symbol as primary logo, with name

secondary
 McDonald’s “Golden Arches”

Slide © 2010 by Lovelock & Wirtz Services Marketing 7/e Chapter 7 – Page 33
 Strategies for Corporate Design
Services Marketing

 International companies need to select designs carefully to

avoid conveying a culturally inappropriate message

 Easily recognizable corporate symbols important for

international marketers in markets where:
 Local language is not written in Roman Script
 Significant portion of population is illiterate

Slide © 2010 by Lovelock & Wirtz Services Marketing 7/e Chapter 7 – Page 34
 FedEx: Use of Company Name In
Corporate Design
Services Marketing

 Created “FedEx Family of companies” consisting of subbrands

for different services; carried its positive FedEx Express image to
other, often low cost services.
 FedEx Express  FedEx Custom Critical
 FedEx Ground  FedEx Supply Chain Services
 FedEx Home Delivery  FedEx Kinko’s
 FedEx Freight

 Each subbrand has different color scheme for second word to

create differentiation for subbrands, e.g.,
 Express is red/orange
 Ground is green

Slide © 2010 by Lovelock & Wirtz Services Marketing 7/e Chapter 7 – Page 35
 Developing An Integrated Marketing
Communications Strategy
Services Marketing

 IMC ties together and

reinforces all
communications to deliver
a strong brand identity

 Communications in
different media should form
part of a single, overall
message about the service
firm

Slide © 2010 by Lovelock & Wirtz Services Marketing 7/e Chapter 7 – Page 36
 Summary
Services Marketing

 Marketing communications adds value through its content

 Overcome problems of intangibility – use metaphors to

communicate value proposition

 Communication planning involves knowing (5Ws)

 Marketing communications originate from within the

organization through production and marketing channels

Slide © 2010 by Lovelock & Wirtz Services Marketing 7/e Chapter 7 – Page 37
 Summary
Services Marketing

 Service delivery channels include

 Service outlets
 Front-line employees
 Self-service delivery points

 Marketing communications originating from outside

organization include
 Word of mouth
 Blogs
 Twitter
 Media coverage

 Corporate design strategies are part and parcel of

communication mix
Slide © 2010 by Lovelock & Wirtz Services Marketing 7/e Chapter 7 – Page 38