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JAN 2013 Semester 1         Service Quality         MKTG 1268          Lecture Five          •    Promoting Services and  ...
This lecture:2       YET another heavy lecture week.       Two chapters involved (7and 8)       This week focus on two ...
3   Chapter Seven    Promoting Services and Educating    Customers
Overview of Chapter 74       Role of Marketing Communications       Challenges of Service        Communications       M...
The role of MC in services5
Position and Differentiates the Service6       Persuade target customers that their service product        offers the bes...
Communications are used to differentiate the service7
Help Customers to Evaluate Service Offerings8       Customers may have difficulty distinguishing one firm        from ano...
Promote Contributions of Service Personnel and        Backstage Operations9       Frontline personnel are central to serv...
Communications are used to promote the     contributions of backstage personnel10
Add value through Communication Content11        Information and consultation adds value to service         product     ...
Facilitate Customer Involvement in Production12        Customers are actively involved in service production;         the...
Stimulate or Dampen Demand to Match Capacity13        Live service performances are time-specific and can‘t         be st...
Challenges of services communications14          Overcoming the challenges of           intangibility          Overcomin...
Problems of Intangibility15        May be difficult to communicate service benefits to customers, especially when        ...
Using marketing communications to portray the     intangible concepts of a service – private banking16
Overcoming Problems of Intangibility17        To overcome intangibility           Use tangible cues in            advert...
Use of Metaphors in Advertising of a Service18
Advertising Strategies for     Overcoming Intangibility (Table 7.1)19                                            19
20MARKETING COMMUNICATIONS PLANNING
Checklist for Marketing Communications Planning: The “5 Ws”     Model21        Who is our target audience?        What d...
Target Audience: 3 Broad Categories22        Prospects            Employ traditional communication mix because prospects...
Common Educational and Promotional Objectives in Service     Settings (1)23        Create memorable images of specific co...
Common Educational and Promotional Objectives in Service     Settings (2)24        Provide reassurance (e.g., promote ser...
Service Insights 7.1 : UPS Repositions Itself to     Deliver (read page 197 of the text)25
26   Marketing Communications Mix for Services
Marketing Communications Mix     for Services (Fig. 7.10a)27                                    27
The marketing communications mix28      Communications originate from different sources:      Messages transmitted throug...
Sources of Messages Received by     Target Audience (Fig. 7.10b)29                                       29
Messages through Traditional Marketing Channels:     Advertising30        Build awareness, inform, persuade, and remind  ...
Messages through Traditional Marketing Channels:     Public Relations31         PR/Publicity involves efforts to stimulat...
Use of effective public relations – Fedex     transporting two giant pandas32
Messages through Traditional Marketing Channels:     Direct Marketing (1)33        Mailings, recorded telephone messages,...
Messages through Traditional Marketing Channels:     Direct Marketing (2)34        Advance in on-demand technologies empo...
Messages through Traditional Marketing Channels:     Sales Promotion35        Defined as ―Communication that comes with a...
Messages through Traditional Marketing Channels:     Personal Selling36        Interpersonal encounters educate customers...
Messages through Traditional Marketing Channels:     Trade Shows37        Popular in b2b marketplace        Stimulate ex...
Internet Marketing Offers Powerful Opportunities38      Supplement traditional marketing channels at       a reasonable c...
Messages through Internet:     Company‟s Website39        The web is used for a variety of communication tasks          ...
Effective use and promotion of a company website –     easyJet has painted its address on each of its aircraft40
Messages through Internet:     Online Advertising (1)41        Banner advertising          Placing advertising banners a...
Advantages and limitations of banner advertising42        Easy for advertisers to measure how many visits to its         ...
Messages through Internet: Online Advertising (2)43        Search engine advertising          Reverse broadcast network:...
Service Insights 7.3 : New Media and Their     Implications for Marketing Communications (read     pages 206-207)44
Moving from Impersonal to Personal     Communications45        There used to be a difference between personal and        ...
Messages through Service Delivery Channels46        Service outlets            Can be through banners, posters, signage,...
Messages Originating from Outside the     Organization (1)47        Word of Mouth (WOM)          Recommendations from ot...
Messages Originating from Outside the     Organization (2)48     • Blogs – A new type of online WOM       Communications a...
49
Ethical Issues in Communication50        Advertising, selling, and sales promotion all lend themselves         easily to ...
The Role of Corporate Design (1)51        Many service firms employ a unified and         distinctive visual appearance f...
Shell and McDonald‟s are two prominent brand     symbols52
The Role of Corporate Design (2)53        How to stand out and be different?          Use colors in corporate design    ...
Summary of Chapter 7 – Promoting Services and     Educating Customers (1)54        Marketing communications has specific ...
Summary of Chapter 7 – Promoting Services and     Educating Customers (2)55        Communication planning involves knowin...
Summary of Chapter 7 – Promoting Services and     Educating Customers (3)56         Marketing communications channels inc...
Summary of Chapter 7 – Promoting Services and     Educating Customers (4)57        Production channels include          ...
Sample Practice Exam Essay Question:      Many services are highly intangible. This      creates several issues and challe...
Can use this diagram from the Text (Table 7.1) to              respond to the exam question59                             ...
Sample Practice Exam Essay Question:          After working as an employee in a luxury spa           business and saving ...
Sample Practice Exam Essay Question:         List, explain and give examples of:           Four different roles of marke...
Marketing Communications – Practice Questions1. Explain what is distinctive about marketing   communications strategy for ...
1. Role of marketing communications in services• The role of marketing communication in services is to help  promote and e...
2. Challenges of marketing communications in services• Since services are about performances rather about objects, it can ...
Marketing Communications – Practice Questions3. Recommend which elements of the marketing   communication mix you would us...
Application of marcom for different kinds of services…• Each of these businesses requires different  communications object...
Application of marcom for different kinds of services…• The hairdresser needs to build a clientele, none  of whom will hav...
Application of marcom for different kinds of services…• The restaurant needs to win back former customers  and attract new...
Application of marcom for different kinds of services…• The accounting firm may choose to publicize client  testimonials i...
Marketing Communications – Practice Questions4. What roles do personal selling, advertisingand public relations play ini....
Roles of different tools of Marcom• Advertising play a role in attracting new customers to a  service business by providin...
72   Chapter Eight     Designing and Managing Service Processes
Overview of Chapter 873        Flowcharting Service Delivery        Use Blueprinting to Document and Manage         Serv...
Flowcharting Service Delivery                             Helps to Clarify Product Elements74                             ...
Simple Flowchart for Delivery of a People-75     Processing Service (Fig. 8.1a)       Key insight: customer must be physic...
Simple Flowchart for Delivery of a76     Possession-Processing Service (Fig. 8.1b)        Key insight: role of customer is...
Can you do a service blueprint for a weather forecasting service?77
78     Simple Flowchart for Delivery of a Mental     Stimulus Processing Service (Fig. 8.1c)       Key insight: action is ...
79     Simple Flowchart for Delivery of an     Information-Processing Service (Fig. 8.2d)          Key insight: insurance ...
80BLUEPRINTING SERVICES TODOCUMENT AND MANAGE   SERVICE PROCESSES
The role of flowcharting and blueprinting81        Flowcharting provides a service organisation with             the means...
Blueprinting      Developing a Blueprint       Identify key activities in creating and delivering        service       D...
Key Components of a Service Blueprint83      1. Define standards for front-stage activities      2. Specify physical evide...
Identifying problems with a service process : example                      handing long queues84
Setting service standards and targets : customer     expectations and ability to delivery consistency85
Blueprinting the  Restaurant86  Experience: Act 1 (Fig. 8.5)                      Read up the full                      ve...
Blueprinting the Restaurant Experience: Act 2 (Fig. 8.5)87
Blueprinting the Restaurant Experience: Act 3 (Fig. 8.5)88
Blueprinting the Restaurant Experience: Act 4 (Fig. 8.5)89
Blueprinting The Restaurant Experience: A     Three-Act Performance90        Act 1: Introductory Scenes        Act 2: De...
The Stage or “Servicescape”91
Improving Reliability of Processes by Failure     Proofing. Identify „Fail Points‟92         Identify fail points       ...
“no room for error”     Use of poka-yoke     in medical surgery93
Setting Service Standards and Targets94                                First impression is important                     ...
95
“Institutions are like steel beams—they tend to rust. What was once smooth   96and shiny and nice tends to become rusty.” ...
Service Process Redesign     Why Redesign?     “Institutions are like steel beams—they tend to rust.           What was on...
Why Redesign?98     Revitalizes process that has become      outdated     Changes in external environment make      exis...
Health care systems and hospital services can be     redesigned to better meet customer (patient) needs99
Why Redesign?100       Rusting occurs internally         Natural deterioration of internal processes; creeping bureaucra...
Service Process Redesign to Improve Both Quality      and Productivity101         Read the Service Insight 8.3 on page 24...
Process Redesign: Approaches and Potential Benefits •    Examining service blueprint with key stakeholders •    Eliminatin...
103THE CUSTOMER AS  CO-PRODUCER
Levels of Customer Participation (1)104         Customer Participation           Actions and resources supplied by custo...
Levels of Customer Participation (2)105
Low versus high participation from customers in a service106
High customer      participation      (medical service)107
Customers as Service Co-Creators108         Customers can influence productivity and quality of          service processe...
109 SELF-SERVICETECHNOLOGIES
Self-Service Technologies (SSTs)110
Self-Service Technology (purchase of train tickets)111
Self-Service Technologies (SSTs)112                                                Many companies and government organizat...
What Aspects Of SSTs Please Or Annoy Customers?113         © Pearson Education South Asia Pte Ltd 2013. All rights reserved
Frustration with some SSTs114
Putting SSTs to Test by Asking a Few Simple Questions115         Does the SST work reliably?             Firms must ensu...
Managing Customer‟s Reluctance to Change116       Increasing customer‘s participation level in a        service can be di...
There needs to be  speedy service  recovery if  technology fails117
Summary for Chapter 8 – Designing and Managing          Service Processes (1)118          Flowcharting helps clarify deli...
Summary for Chapter 8 – Designing and Managing      Service Processes (2)119         Blueprinting a restaurant (or other ...
Summary for Chapter 8 – Designing and Managing      Service Processes (3)120         When the customer is a co-producer, ...
Sample Practice Exam Essay Question:• You are about to open a cafeteria business. To ensure  that all your service staff u...
Sample Practice Exam Essay Question: read the followingcase study and answer the question (next page)                     ...
Question for the exam case study:• Suggest how restructured hospitals can  reduce the bed crunch using the following  serv...
Sample Practice Exam Essay Question: a) What are SSTs? b) Give two examples of how SST have replaced    traditional forms ...
Another Sample Practice Exam EssayQuestion on SSTs:(a) Identify and describe three clearly different    uses of Self-Servi...
To understand the impact of SSTs, go back to the      Flower of Service Model (Fig 5.14)                                  ...
Categories and Examples of SSTs in use               Telephone/               InteractiveInterface         Voice          ...
Service         Human            Machine              ElectronicIndustry        Contact          Assisted Service     Serv...
Psychological Factors Related to the use of SSTs• SSTs advantages                     SSTs disadvantages   – Time savings ...
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SQ Lecture Five : Promoting and Educating Customers & Designing and Managing Service Processes (Chaps 7 and 8)

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Transcript of "SQ Lecture Five : Promoting and Educating Customers & Designing and Managing Service Processes (Chaps 7 and 8)"

  1. 1. JAN 2013 Semester 1 Service Quality MKTG 1268 Lecture Five • Promoting Services and Educating Customers (Chapter 7) • Designing and Managing Service Processes (Chapter 8)
  2. 2. This lecture:2  YET another heavy lecture week.  Two chapters involved (7and 8)  This week focus on two Ps Promotions Process  By the end of this lecture we would have pretty much finished most of the elements of the Services Marketing Mix. This puts you in a good position to complete your project ahead of schedule (hopefully)!
  3. 3. 3 Chapter Seven Promoting Services and Educating Customers
  4. 4. Overview of Chapter 74  Role of Marketing Communications  Challenges of Service Communications  Marketing Communications Planning  The Marketing Communications Mix  The Role of Corporate Design
  5. 5. The role of MC in services5
  6. 6. Position and Differentiates the Service6  Persuade target customers that their service product offers the best solution  Marketing communications not only attracts new customers but also to maintain contact with existing customers and build relationships  Used to convince target customers about firm‘s superior performance on determinant attributes
  7. 7. Communications are used to differentiate the service7
  8. 8. Help Customers to Evaluate Service Offerings8  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
  9. 9. Promote Contributions of Service Personnel and Backstage Operations9  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
  10. 10. Communications are used to promote the contributions of backstage personnel10
  11. 11. Add value through Communication Content11  Information and consultation adds value to service product  Information needed about kinds of services, the place and time of availability, and cost of such services  And the specific features, functions and service benefits that come with these services
  12. 12. Facilitate Customer Involvement in Production12  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
  13. 13. Stimulate or Dampen Demand to Match Capacity13  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
  14. 14. Challenges of services communications14  Overcoming the challenges of intangibility  Overcoming the challenges of managing promises and expectations  Educating customers  Managing internal marketing communications
  15. 15. Problems of Intangibility15  May be difficult to communicate service benefits to customers, especially when intangible  Intangibility creates 4 problems:  Abstractness  No one-to-one correspondence with physical objects  Generality  Items that comprise a class of objects, persons, or events  Non-searchability  Cannot be searched or inspected before purchase  Mental impalpability  Customers find it hard to grasp benefits of complex, multidimensional new offerings
  16. 16. Using marketing communications to portray the intangible concepts of a service – private banking16
  17. 17. Overcoming Problems of Intangibility17  To overcome intangibility  Use tangible cues in advertising  Use metaphors to communicate benefits of service offerings  Any other strategies to consider?
  18. 18. Use of Metaphors in Advertising of a Service18
  19. 19. Advertising Strategies for Overcoming Intangibility (Table 7.1)19 19
  20. 20. 20MARKETING COMMUNICATIONS PLANNING
  21. 21. Checklist for Marketing Communications Planning: The “5 Ws” Model21  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?
  22. 22. Target Audience: 3 Broad Categories22  Prospects  Employ traditional communication mix because prospects are not known in advance  Users  More cost effective channels  Employees  Secondary audience for communication campaigns through public media  Shape employee behavior  Part of internal marketing campaign using company- specific channels
  23. 23. Common Educational and Promotional Objectives in Service Settings (1)23  Create memorable images of specific companies and their brands  Build awareness/interest for unfamiliar service/brand  Compare service favorably with competitors‘ offerings  Build preference by communicating brand strengths and benefits  Reposition service relative to competition  Reduce uncertainty/perceived risk by providing useful info and advice
  24. 24. Common Educational and Promotional Objectives in Service Settings (2)24  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
  25. 25. Service Insights 7.1 : UPS Repositions Itself to Deliver (read page 197 of the text)25
  26. 26. 26 Marketing Communications Mix for Services
  27. 27. Marketing Communications Mix for Services (Fig. 7.10a)27 27
  28. 28. The marketing communications mix28 Communications originate from different sources:  Messages transmitted through traditional marketing channels.  Messages transmitted through the Internet.  Messages transmitted through service delivery channels.  Messages originating from outside the organisation.
  29. 29. Sources of Messages Received by Target Audience (Fig. 7.10b)29 29
  30. 30. Messages through Traditional Marketing Channels: Advertising30  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  TV, radio broadcasts, newspapers, magazines, Internet, many physical facilities, transit vehicles--all cluttered with ads  Effectiveness remains controversial  Research suggests that less than half of all ads generate a positive return on their investment
  31. 31. Messages through Traditional Marketing Channels: Public Relations31  PR/Publicity involves efforts to stimulate positive interest in an organization and its products through third parties  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 company‘s 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.
  32. 32. Use of effective public relations – Fedex transporting two giant pandas32
  33. 33. Messages through Traditional Marketing Channels: Direct Marketing (1)33  Mailings, recorded telephone messages, faxes, email  Potential to send personalized messages to highly targeted microsegments  Need detailed database of information about customers and prospects
  34. 34. Messages through Traditional Marketing Channels: Direct Marketing (2)34  Advance in on-demand technologies empower consumers to decide how and when they prefer to be reached, and by whom  e.g. email spam filters, pop-up blockers, podcasting  Permission Marketing goal is to persuade customers to volunteer their attention  Enables firms to build strong relationships with customers  e.g., People invited to register at a firm‘s website and specify what type of information they like to receive via email
  35. 35. Messages through Traditional Marketing Channels: Sales Promotion35  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 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  When a guest announced his age as 102 and asked to be paid 2% of the room rate in return for staying the night, he received it— and got a game of tennis with the general manager!
  36. 36. Messages through Traditional Marketing Channels: Personal Selling36  Interpersonal encounters educate customers and promote preferences for particular brand or product  Common in b2b and infrequently purchased services  Many b2b firms have dedicated salesforce to do personal selling  Customer assigned to a designated account manager  For services that are bought less often, firm‘s representative acts as consultant to help buyers make selection  Face-to-face selling of new products is expensive— telemarketing is lower cost alternative
  37. 37. Messages through Traditional Marketing Channels: Trade Shows37  Popular in b2b marketplace  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
  38. 38. Internet Marketing Offers Powerful Opportunities38  Supplement traditional marketing channels at a reasonable cost  Should be part of an integrated, well- designed communications strategy  Can market through the company‘s own website or through online advertising
  39. 39. Messages through Internet: Company‟s Website39  The web is used for a variety of communication tasks  Creating consumer awareness and interest  Providing information and consultation  Allowing two-way communication with customers through email and chat rooms  Encouraging product trial  Allowing customers to place orders  Measuring effectiveness of advertising or promotional campaigns  Innovative companies look for ways to improve the appeal and usefulness of their sites
  40. 40. Effective use and promotion of a company website – easyJet has painted its address on each of its aircraft40
  41. 41. Messages through Internet: Online Advertising (1)41  Banner advertising  Placing advertising banners and buttons on portals such as Yahoo or CNN and other firms‘ websites  Draw online traffic to the advertiser‘s own site  Web sites often include advertisements of other related, but non competing services  Example: Advertisements for financial service providers on Yahoo‘s stock quotes page
  42. 42. Advantages and limitations of banner advertising42  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  Fraudulentclick-throughs designed to boost apparent effectiveness
  43. 43. Messages through Internet: Online Advertising (2)43  Search engine advertising  Reverse broadcast network: 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
  44. 44. Service Insights 7.3 : New Media and Their Implications for Marketing Communications (read pages 206-207)44
  45. 45. Moving from Impersonal to Personal Communications45  There used to be a difference between personal and impersonal communication  Technology has created a gray area between the two  Direct mail and email can be personalized  Electronic recommendation agents can also personalize communications  With advances of on-demand technologies, consumer are increasingly empowered to decide how and when they like to be reached (see Service Insights 7.4)
  46. 46. Messages through Service Delivery Channels46  Service outlets  Can be through banners, posters, signage, brochures,  Frontline employees  Communication from frontline staff can be for the core service or supplementary elements  New customers in particular need help from service personnel  video screens, audio etc.  Self-service delivery points  ATMs, vending machines and websites are examples
  47. 47. Messages Originating from Outside the Organization (1)47  Word of Mouth (WOM)  Recommendations from other customers viewed as more credible  Strategies to stimulate positive WOM:  Having satisfied customers providing comments  Using other purchasers and knowledgeable individuals as reference  Creating exciting promotions that get people talking  Offering promotions that encourage customers to persuade their friend to purchase  Developing referral incentive schemes
  48. 48. Messages Originating from Outside the Organization (2)48 • Blogs – A new type of online WOM Communications about customer experiences influence opinions of brands and products Some firm have started to monitor blogs as form of market research and feedback • Twitter Becoming increasingly popular – fastest-growing social networking service • Media Coverage Compares, contrasts service offerings from competing organizations Advice on ―best buys‖
  49. 49. 49
  50. 50. Ethical Issues in Communication50  Advertising, selling, and sales promotion all lend themselves easily to misuse  Communication messages often include promises about benefits and quality of service delivery. Customers are sometimes disappointed  Why were their 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 people‘s personal lives
  51. 51. The Role of Corporate Design (1)51  Many service firms 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., BP‘s bright green-and yellow service stations  Especially useful in competitive markets to stand out from the crowd and be instantly recognizable in different locations  e.g. Shell‘s yellow scallop shell on a red background  MacDonald‘s ―Golden Arches‖
  52. 52. Shell and McDonald‟s are two prominent brand symbols52
  53. 53. The Role of Corporate Design (2)53  How to stand out and be different?  Use colors in corporate design  Use names as central element in their corporate designs  Use trademarked symbol rather than name as primary logo  Create tangible recognizable symbols to connect with corporate brand names
  54. 54. Summary of Chapter 7 – Promoting Services and Educating Customers (1)54  Marketing communications has specific roles  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  Communicating services presents both challenges and opportunities  Overcome problems of intangibility--use metaphors to communicate value proposition
  55. 55. Summary of Chapter 7 – Promoting Services and Educating Customers (2)55  Communication planning involves knowing (5Ws)  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?  Marketing communications originate from within the organization through marketing and production channels
  56. 56. Summary of Chapter 7 – Promoting Services and Educating Customers (3)56  Marketing communications channels include  Advertising  Public relations  Direct marketing  Sales promotion  Personal selling  Tradeshows  Internet
  57. 57. Summary of Chapter 7 – Promoting Services and Educating Customers (4)57  Production channels include  Front-lineemployees and call center staff  Service outlets  Self-service delivery points  Marketing communications originating from outside organization include  Word of mouth  Blogs and online ratings  Media editorial  Corporate design strategies are part and parcel of communication mix
  58. 58. Sample Practice Exam Essay Question: Many services are highly intangible. This creates several issues and challenges for the marketer. Describe the four problems of intangibility , as well as explain (at least) six different advertising / communication strategies used to overcome the ‗intangibility problem‘58
  59. 59. Can use this diagram from the Text (Table 7.1) to respond to the exam question59 59
  60. 60. Sample Practice Exam Essay Question:  After working as an employee in a luxury spa business and saving for many years, you finally have enough capital and technical skills to start up your own spa. As a new business, you need to communicate your service to potential target customers.  Explain the challenges you might face in communicating your service to the target market?  What are the advertising strategies you can use to overcome these challenges?60
  61. 61. Sample Practice Exam Essay Question:  List, explain and give examples of:  Four different roles of marketing communications, and  The three sources of communication messages categorized under ‗production channels‘ for an insurance provider OR a bank61
  62. 62. Marketing Communications – Practice Questions1. Explain what is distinctive about marketing communications strategy for services2. Why is it more difficult for a service provider to market services than for a manufacturing firm to market physical goods? 62
  63. 63. 1. Role of marketing communications in services• The role of marketing communication in services is to help promote and educate the value proposition that the firm is offering. Position and differentiate their services from the competitors Help customers to evaluate service offerings and highlight the differences that make a difference for the customer (highlight one’s competitive advantage) Promote the contribution of service personnel and backstage operations Add value through communication content Facilitate customer involvement in production Stimulate or dampen demand to match capacity 63
  64. 64. 2. Challenges of marketing communications in services• Since services are about performances rather about objects, it can be difficult to communicate the benefits to customers. This is especially true when it involves tangible actions to customers or their possessions.• Some of the challenges that service companies face are: Problems with intangibility—this will include: generality, non-searchability, abstractness and mental impalpability Overcoming the problems of intangibility—this can be rectified with the use of tangible cues and metaphors to overcome the problems of intangibility• Refer to Table 7.1 that discusses the advertising strategies for overcoming intangibility 64
  65. 65. Marketing Communications – Practice Questions3. Recommend which elements of the marketing communication mix you would use for each of the following scenarios: i. A newly established hair salon in Clementi Mall ii. An established restaurant facing declining patronage because of new competition. iii. A small law firm serving mostly business clients. 65
  66. 66. Application of marcom for different kinds of services…• Each of these businesses requires different communications objectives to match its specific situation. You should start by developing objectives for each service. From here you can then determine which marketing communications mix elements might be most appropriate for meeting these objectives. 66
  67. 67. Application of marcom for different kinds of services…• The hairdresser needs to build a clientele, none of whom will have previous experience with the salon. Hence, providing information and obtaining trial are key challenges. A geographically specific communications campaign will therefore be appropriate. Local newspapers and radio might be appropriate media. Perhaps the printed ads could include a coupon for a reduced price to encourage trial. Advertising in the Yellow Pages should also be considered. 67
  68. 68. Application of marcom for different kinds of services…• The restaurant needs to win back former customers and attract new ones. Advertising will have something to talk about to this first group if there have been changes in the menu, décor, prices, or hours of service. If the restaurant has a list of customer’s names, addresses, and phone numbers, it might consider a direct mail campaign or even telemarketing. Otherwise, local media such as radio, cable TV, and newspapers may be needed. New customers may be addressed in similar ways to the hairdresser. In addition, they can place listings in tourist brochures if this is a tourist area. 68
  69. 69. Application of marcom for different kinds of services…• The accounting firm may choose to publicize client testimonials in local business newspapers and magazines. Organizing seminars on accounting practices, new accounting developments and inviting representatives from major business organizations would increase the awareness about the firm. Advertising about the firm, using billboards, at the commercial centers of the city may attract attention of a large segment of target audience. 69
  70. 70. Marketing Communications – Practice Questions4. What roles do personal selling, advertisingand public relations play ini. attracting new customers to a service businessii. retaining existing customers. 70
  71. 71. Roles of different tools of Marcom• Advertising play a role in attracting new customers to a service business by providing information about a company and the benefits its services can offer to customers.•• Personal selling is most often used in business marketing, where sales calls play a large role in securing new corporate clients about a supplier’s products.• Public relations are widely used communications tactics in both the corporate and consumer arenas to build up the brand name of the company. 71
  72. 72. 72 Chapter Eight Designing and Managing Service Processes
  73. 73. Overview of Chapter 873  Flowcharting Service Delivery  Use Blueprinting to Document and Manage Service Processes  Service Process Redesign  The Customer as Co-Producer  Self-Service Technologies (SST)
  74. 74. Flowcharting Service Delivery Helps to Clarify Product Elements74  Technique for displaying the nature and sequence of the different steps in delivery service to customers  Offers way to understand total customer service experience  Shows how nature of customer involvement with service organizations varies by type of service: Refer back to Chapter One  People processing  Possession processing  Mental Stimulus processing  Information processing
  75. 75. Simple Flowchart for Delivery of a People-75 Processing Service (Fig. 8.1a) Key insight: customer must be physically present in order to benefit from the facilities of the motel 75
  76. 76. Simple Flowchart for Delivery of a76 Possession-Processing Service (Fig. 8.1b) Key insight: role of customer is limited. Need to trust the technician to do a good job. 76
  77. 77. Can you do a service blueprint for a weather forecasting service?77
  78. 78. 78 Simple Flowchart for Delivery of a Mental Stimulus Processing Service (Fig. 8.1c) Key insight: action is intangible and role of customer is less active. Need to have some time costs in order to pay attention. Advertising revenues help to maintain the TV station. 78
  79. 79. 79 Simple Flowchart for Delivery of an Information-Processing Service (Fig. 8.2d) Key insight: insurance is also an intangible action but it takes more time and mental effort. 79
  80. 80. 80BLUEPRINTING SERVICES TODOCUMENT AND MANAGE SERVICE PROCESSES
  81. 81. The role of flowcharting and blueprinting81 Flowcharting provides a service organisation with the means of managing and controlling individual parts of the service delivery system; identifying weak points and opportunities for improving or enhancing the efficiency and productivity of the system; and preventing service failures.
  82. 82. Blueprinting Developing a Blueprint  Identify key activities in creating and delivering service  Define ―big picture‖ before ―drilling down‖ to obtain a higher level of detail Advantages of Blueprinting  Distinguish between ―front-stage‖ and ―backstage‖  Clarify interactions between customers and staff, and support by backstage activities and systems  Identify potential fail points; take preventive measures; prepare contingency  Pinpoint stages in the process where customer commonly have to wait 82
  83. 83. Key Components of a Service Blueprint83 1. Define standards for front-stage activities 2. Specify physical evidence 3. Identify main customer actions 4. Line of interaction (customers and front-stage personnel) 5. Front-stage actions by customer-contact personnel 6. Line of visibility (between front stage and backstage) 7. Backstage actions by customer contact personnel 8. Support processes involving other service personnel 9. Support processes involving IT - Identify fail points and risks of excessive waits - Set service standards and do failure-proofing
  84. 84. Identifying problems with a service process : example handing long queues84
  85. 85. Setting service standards and targets : customer expectations and ability to delivery consistency85
  86. 86. Blueprinting the Restaurant86 Experience: Act 1 (Fig. 8.5) Read up the full version on pages 234 -237 of the text 86
  87. 87. Blueprinting the Restaurant Experience: Act 2 (Fig. 8.5)87
  88. 88. Blueprinting the Restaurant Experience: Act 3 (Fig. 8.5)88
  89. 89. Blueprinting the Restaurant Experience: Act 4 (Fig. 8.5)89
  90. 90. Blueprinting The Restaurant Experience: A Three-Act Performance90  Act 1: Introductory Scenes  Act 2: Delivery of Core Product  Cocktails, seating, order food and wine, wine service  Potential fail points: Menu information complete? Menu intelligible? Everything on the menu actually available?  Mistakes in transmitting information a common cause of quality failure – e.g. bad handwriting; poor verbal communication  Customers may not only evaluate quality of food and drink, but how promptly it is served, serving staff attitudes, or style of service  Act 3: The Drama Concludes  Remaining actions should move quickly and smoothly, with no surprises at the end  Customer expectations: accurate, intelligible and prompt bill, payment handled politely, guests are thanked for their patronage
  91. 91. The Stage or “Servicescape”91
  92. 92. Improving Reliability of Processes by Failure Proofing. Identify „Fail Points‟92  Identify fail points  Analysis of reasons for failure often reveals opportunities for failure proofing to reduce/eliminate future risk of errors  Need fail-safe methods for both employees and customers  Have poka-yokes to ensure service staff do things correctly, as requested, or at the right speed  Customer poka-yokes focus on preparing the customer for:  The encounter  Understanding and anticipating their roles  Selecting the correct service or transaction  See Service Insights 8.1 – Framework to prevent customer failures
  93. 93. “no room for error” Use of poka-yoke in medical surgery93
  94. 94. Setting Service Standards and Targets94  First impression is important  Affects customer‘s evaluations of quality during later stages of service delivery as customer perceptions of service experiences tend to be cumulative  For low-contact service, a single failure committed front stage is relatively more serious than in a high-contact service
  95. 95. 95
  96. 96. “Institutions are like steel beams—they tend to rust. What was once smooth 96and shiny and nice tends to become rusty.” Mitchell T. Rabkin MD, formerly president of Boston’s Beth Israel Hospital SERVICE PROCESS REDESIGN
  97. 97. Service Process Redesign Why Redesign? “Institutions are like steel beams—they tend to rust. What was once smooth and shiny and nice tends to become rusty.” Mitchell T. Rabkin MD, formerly president of Boston’s Beth Israel Hospital97 © Pearson Education South Asia Pte Ltd 2013. All rights reserved
  98. 98. Why Redesign?98 Revitalizes process that has become outdated Changes in external environment make existing practices obsolete and require redesign of underlying processes Creation of brand-new processes to stay relevant
  99. 99. Health care systems and hospital services can be redesigned to better meet customer (patient) needs99
  100. 100. Why Redesign?100  Rusting occurs internally Natural deterioration of internal processes; creeping bureaucracy; evolution of spurious, unofficial standards Symptoms: - Extensive information exchange - Data that is not useful - High ratio of checking or control activities to value-adding activities - Increased exception processing - Customer complaints about inconvenient and unnecessary procedures
  101. 101. Service Process Redesign to Improve Both Quality and Productivity101  Read the Service Insight 8.3 on page 245  Its about our national library : Process Redesign in Singapore Libraries
  102. 102. Process Redesign: Approaches and Potential Benefits • Examining service blueprint with key stakeholders • Eliminating non-value-adding steps  Simplify front-end and back-end processes with goal of focusing on benefit-producing part of service encounter  Get rid of non-value adding steps  Improve productivity and customer satisfaction • Shifting to self-service  Increase in productivity and service quality  Lower costs  Enhance technology reputation  Differentiates company102 © Pearson Education South Asia Pte Ltd 2013. All rights reserved
  103. 103. 103THE CUSTOMER AS CO-PRODUCER
  104. 104. Levels of Customer Participation (1)104  Customer Participation  Actions and resources supplied by customers during service production and/or delivery  Includes mental, physical, and even emotional inputs
  105. 105. Levels of Customer Participation (2)105
  106. 106. Low versus high participation from customers in a service106
  107. 107. High customer participation (medical service)107
  108. 108. Customers as Service Co-Creators108  Customers can influence productivity and quality of service processes and outputs  Customers not only bring expectations and needs, they also need to have relevant service production competencies  Customers also need to be recruited as they are ―partial employees‖. Firms need to get those with the skills to do the tasks  For the relationship to last, both parties need to cooperate with each other
  109. 109. 109 SELF-SERVICETECHNOLOGIES
  110. 110. Self-Service Technologies (SSTs)110
  111. 111. Self-Service Technology (purchase of train tickets)111
  112. 112. Self-Service Technologies (SSTs)112 Many companies and government organizations seek to divert customers from employee contact to Internet- based self-service Advantages: Disadvantages: Psychological Factors Related to Use of  Time and Cost savings  Anxiety and stress experienced by  Flexibility customers who are  Convenience of location uncomfortable with using them SSTs  Greater control over service delivery  Some see service encounters as social  High perceived level of experiences and prefer customization to deal with people
  113. 113. What Aspects Of SSTs Please Or Annoy Customers?113 © Pearson Education South Asia Pte Ltd 2013. All rights reserved
  114. 114. Frustration with some SSTs114
  115. 115. Putting SSTs to Test by Asking a Few Simple Questions115  Does the SST work reliably?  Firms must ensure that SSTs are dependable and user-friendly  Is the SST better than interpersonal alternatives?  Customers will stick to conventional methods if SST doesn’t create benefits for them  If it fails, what systems are in place to recover?  Always provide systems, structures, and technologies that will enable prompt service recovery when things go wrong 115
  116. 116. Managing Customer‟s Reluctance to Change116  Increasing customer‘s participation level in a service can be difficult  Marketing communications to be used to:  Prepare customer for change  Explain the rationale and benefits  What customers need to do differently in the future
  117. 117. There needs to be speedy service recovery if technology fails117
  118. 118. Summary for Chapter 8 – Designing and Managing Service Processes (1)118  Flowcharting helps clarify delivery elements. It also shows how nature of customer involvement with service organizations varies by type of service  Service blueprinting can be used to design a service and create a satisfying experience for customers. Key components of the blueprint include  Definition of standards for each front-stage activity  Physical and other evidence for front-stage activities  Principal customer actions  Line of interaction  Front-stage actions by customer-contact personnel  Line of visibility  Backstage actions by customer-contact personnel  Support processes involving other service personnel  Support processes involving information technology
  119. 119. Summary for Chapter 8 – Designing and Managing Service Processes (2)119  Blueprinting a restaurant (or other service) can be a three-act performance  Prologue and introductory scenes  Delivery of the core product  Conclusion of the drama  Failure proofing can be designed into service processes to improve reliability  Service process redesign can be categorized into five kinds  Eliminating non-value-adding steps  Shifting to self-service  Delivering direct service  Bundling services  Redesigning the physical aspect of service processes
  120. 120. Summary for Chapter 8 – Designing and Managing Service Processes (3)120  When the customer is a co-producer, issues to consider are  Levels of customer participation  Customers as partial employees  When deciding to use Self-service Technologies (SSTs), firms should consider  Psychological factors related to the use of SSTs  Aspects of SSTs that please or annoy customers
  121. 121. Sample Practice Exam Essay Question:• You are about to open a cafeteria business. To ensure that all your service staff understands the service process you have designed for your business, you have decided to develop a blueprint to identify key activities in creating and delivering your service.• How would you explain the advantages of your blueprint to your service staff?• What are the key components of a service blueprint?• Present the service blueprint that you have developed for your cafeteria business. 121
  122. 122. Sample Practice Exam Essay Question: read the followingcase study and answer the question (next page) 122
  123. 123. Question for the exam case study:• Suggest how restructured hospitals can reduce the bed crunch using the following service process redesign strategies a) Getting rid of non-value added steps b) Redesign the physical aspects of the service process c) Offering direct service 123
  124. 124. Sample Practice Exam Essay Question: a) What are SSTs? b) Give two examples of how SST have replaced traditional forms of delivery of core products, and two examples of how SST have replaced traditional forms of delivery of supplementary services c) What are some of the advantages and disadvantages of SSTs? 124
  125. 125. Another Sample Practice Exam EssayQuestion on SSTs:(a) Identify and describe three clearly different uses of Self-Service Technologies (SSTs). Give real-life examples of each. (12 marks)(b.) What are the benefits of SSTs for customersand the service organization? (8 marks) 125
  126. 126. To understand the impact of SSTs, go back to the Flower of Service Model (Fig 5.14) 126 Which aspects of the Core and Supplementary Service 126 Elements should (should not) be offered using SSTs?
  127. 127. Categories and Examples of SSTs in use Telephone/ InteractiveInterface Voice Online Interactive VideoPurpose Response Internet Kiosks CD *Package *Phone banking tracking *ATMsCustomer *Flight Status *Account *HotelService *Order Status Information checkouts *Telephone *Retail *Phone Banking Purchasing banking *Prescription *Financial *Flight StatusTransactions refills Institutions *Order Status *Tax *Blood preparation *Internet info pressure software search machines *TV/CD *Info telephone *Distance 127 *Tourist based 127Self-Help lines Learning information training
  128. 128. Service Human Machine ElectronicIndustry Contact Assisted Service ServiceBanking Teller ATM Online banking (Core) (Core services)Grocery Checkout clerk Self-checkout Online order/ station pickup (Supp )Airlines Ticket agent (Supplementary) Check-in kiosk E- boarding pass (Supplementary) (Supplementary)Restaurants Waitress Vending machine Online order/ deliveryMovie theater Ticket sale Kiosk ticketing Pay-for-view (Supplementary) (Core services)Book store Information Stock-availability Online books clerk terminal (Supp) (Core services)Education Teacher Computer tutorial Distance learning (Core services) (Core services) 128
  129. 129. Psychological Factors Related to the use of SSTs• SSTs advantages SSTs disadvantages – Time savings • Anxiety and stress experienced by – Cost savings customers who are uncomfortable with – Flexibility using them – Convenience of location • Some see service encounters as social – Greater control over experiences and prefer service delivery to deal with people – High perceived level of customization • SST technologies break downs – SST not always reliable. 129 129
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