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Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 6 - 1
Chapter 6:
Educating Customers
...
Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 6 - 2
Overview of Chapter 6
• Role of...
Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 6 - 3
Role of Marketing Communication
Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 6 - 4
Adding Value through
Communicat...
Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 6 - 6
Communicating Services Presents...
Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 6 - 7
Overcoming Problems of Intangib...
Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 6 - 8
Advertising Strategies for
Over...
Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 6 - 10
Using Metaphors to
Communicate...
Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 6 - 13
Facilitate Customer Involvemen...
Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 6 - 14
Help Customers to Evaluate Ser...
Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 6 - 15
Stimulate or Dampen Demand to
...
Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 6 - 16
Promote the Contributions of
S...
Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 6 - 17
Setting Communication Objectiv...
Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 6 - 18
Checklist for Marketing Commun...
Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 6 - 19
Target Audience: 3 Broad Categ...
Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 6 - 20
Common Educational and Promoti...
Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 6 - 21
Common Educational and Promoti...
Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 6 - 22
Key Planning Considerations
• ...
Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 6 - 23
The Marketing Communications
M...
Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 6 - 24
Marketing Communications Mix
•...
Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 6 - 25
Marketing Communications Mix
f...
Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 6 - 26
Key: * Denotes communications ...
Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 6 - 27
Sources of Messages Received b...
Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 6 - 28
Messages Transmitted through
P...
Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 6 - 29
Messages Transmitted through
P...
Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 6 - 30
Messages through Marketing Cha...
Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 6 - 31
Messages through Marketing Cha...
Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 6 - 32
Messages through Marketing Cha...
Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 6 - 33
• Mailings, recorded telephone...
Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 6 - 34
• Advance in on-demand technol...
Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 6 - 35
• Defined as “communication at...
Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 6 - 36
• Speeds up introduction and a...
Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 6 - 37
• PR/publicity involves effort...
Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 6 - 38
Messages Originating from Outs...
Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 6 - 39
Messages Originating from Outs...
Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 6 - 40
Ethical Issues in Communicatio...
Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 6 - 41
Role of Corporate Design
Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 6 - 42
Strategies for Corporate Desig...
Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 6 - 43
• International companies need...
Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 6 - 44
FedEx: Use of Company Name In
...
Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 6 - 45
FedEx: Use of Company Name In
...
Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 6 - 46
Marketing Communications and
t...
Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 6 - 47
Marketing Communications and
t...
Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 6 - 48
Internet Marketing Offers Powe...
Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 6 - 49
Internet Marketing Offers Powe...
Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 6 - 50
Website Design Considerations ...
Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 6 - 51
Website Design Considerations ...
Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 6 - 52
EasyJet Paints Its Website Add...
Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 6 - 53
Effective Advertising on Inter...
Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 6 - 54
Effective Advertising on Inter...
Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 6 - 55
• Reverse broadcast network—se...
Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 6 - 56
• Google – The New Online Mark...
Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 6 - 57
Developing an Integrated Marke...
Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 6 - 58
Summary of Chapter 6: Educatin...
Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 6 - 59
Summary of Chapter 6: Educatin...
Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 6 - 60
Summary of Chapter 6: Educatin...
Service Marketing - Love Lock Chapter-06
Service Marketing - Love Lock Chapter-06
Service Marketing - Love Lock Chapter-06
Service Marketing - Love Lock Chapter-06
Service Marketing - Love Lock Chapter-06
Service Marketing - Love Lock Chapter-06
Service Marketing - Love Lock Chapter-06
Service Marketing - Love Lock Chapter-06
Service Marketing - Love Lock Chapter-06
Service Marketing - Love Lock Chapter-06
Service Marketing - Love Lock Chapter-06
Service Marketing - Love Lock Chapter-06
Service Marketing - Love Lock Chapter-06
Service Marketing - Love Lock Chapter-06
Service Marketing - Love Lock Chapter-06
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Service Marketing - Love Lock Chapter-06

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Christopher Love Lock
Services Marketing
Chapter Number Six

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  • kindly please give me your contact number i need to contact you. khalid hyder
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  • Hi Mr.Ali Zulfikar i comes to ask you thet the report you have upload 'Pakistan Russia Relation-report' so can you share me the references of those books articles or any other where from you build this report.. Khalid Hyder.Karachi
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Transcript of "Service Marketing - Love Lock Chapter-06"

  1. 1. Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 6 - 1 Chapter 6: Educating Customers and Promoting the Value Proposition
  2. 2. Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 6 - 2 Overview of Chapter 6 • Role of Marketing Communications • Communicating Services Presents Both Challenges and Opportunities • Setting Communication Objectives • The Marketing Communications Mix • Role of Corporate Design • Marketing Communications and the Internet
  3. 3. Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 6 - 3 Role of Marketing Communication
  4. 4. Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 6 - 4 Adding Value through Communication Content • Information and consultation represent important ways to add value to a product • Provide information to prospective customers o Service options available, cost, specific features, functions, service benefits • Persuade target customers that service offers best solution to meet their needs and build relationship with them • Help maintain relationships with existing customers o Requires comprehensive, up-to-date customer database and ability to make use of this in a personalized way o Direct mail and contacts by telephone, e-mail, websites, text messages  For example, doctors sending annual checkup reminders to patients
  5. 5. Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 6 - 6 Communicating Services Presents Both Challenges and Opportunities
  6. 6. Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 6 - 7 Overcoming Problems of Intangibility • May be difficult to communicate service benefits to customers, especially when intangible • Intangibility creates four problems: o Abstractness  No one-to-one correspondence with physical objects o Generality  Items that comprise a class of objects, persons, or events o Nonsearchability  Cannot be searched or inspected before purchase o Mental impalpability  Customers find it hard to grasp benefits of complex, multidimensional new offerings
  7. 7. Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 6 - 8 Advertising Strategies for Overcoming Intangibility (Table 6.1) Intangibility problem Advertising strategy • Generality o objective claims : Document physical system capacity Cite past performance statistics o subjective claims : Present actual service delivery incident • Nonsearchability : Present customer testimonials • Abstractness : Display typical customers benefiting • Impalpability : Documentary of step-by-step process, Source: Banwari Mittal and Julie Baker, “Advertising Strategies for Hospitality Services,” Cornell Hotel and Restaurant Administration Quarterly 43, April 2002, 53
  8. 8. Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 6 - 10 Using Metaphors to Communicate Value Propositions • Tangible metaphors help to communicate benefits of service offerings, for example: o Gods own Country - Kerala • Metaphors communicate value propositions more dramatically and emphasize key points of difference • Highlight how service benefits are actually provided • Can you suggest some examples from recent advertising?
  9. 9. Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 6 - 13 Facilitate Customer Involvement in Production • When customers are actively involved in service production, they need training to perform well- HOW ? -Show service delivery in action • Television and videos engage viewer o Dentists showing patients videos of surgical procedures before surgery • Advertising and publicity can make customers aware of changes in service features and delivery systems in b2b and b2c contexts o Sales promotions to motivate customers o Offer incentives to make necessary changes in their behaviour o Price discounts to encourage self-service on an ongoing basis
  10. 10. Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 6 - 14 Help Customers to Evaluate Service Offerings • Customers may have difficulty distinguishing one firm from another o Provide tangible clues related to service performance • Some performance attributes lend themselves better to advertising than others o Airlines  Boast about punctuality  Do not talk overtly in advertising about safety, admission that things might go wrong make prospective travelers nervous  Use indirect approach: promote pilot expertise, mechanic’s maintenance skills, newness of aircraft • If Firm’s expertise is hidden in low-contact services – Ex Imports business – DHL - o Need to illustrate equipment, procedures, employee activities that take place backstage o With 100 sales offices worldwide, the global network of DHL and special relations to national Public Postal Operators (PPOs) DHL Global Mail can offer you direct connections to more than 200 countries.
  11. 11. Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 6 - 15 Stimulate or Dampen Demand to Match Capacity • Live service performances are time-specific and can’t be stored for resale at a later date o For example, haircut on Tuesdays o Advertising and sales promotions can change timing of customer use • Examples of demand management strategies o Reducing usage during peak demand periods- increase price o Stimulating demand during demand during off-peak period, for example:  Run promotions that offer extra value—room upgrades, free breakfast
  12. 12. Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 6 - 16 Promote the Contributions of Service Personnel • Frontline personnel are central to service delivery in high-contact services • Ads should show employees at work and this helps customers understand the nature of service encounter and what to expect once they reach the service center. Ex ICICI Banks New Ad _ Khayal Aapka • Show customers the work performed behind the scenes to ensure good delivery o To enhance trust, highlight expertise and commitment of employees whom customers normally do not normally encounter o Service personnel should be informed about the content of new advertising campaigns or brochures before launch
  13. 13. Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 6 - 17 Setting Communication Objectives
  14. 14. Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 6 - 18 Checklist for Marketing Communications Planning: The “5 Ws” Model • 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?
  15. 15. Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 6 - 19 Target Audience: 3 Broad Categories • Prospects o Employ traditional communication mix because prospects are not known in advance – Ex Ads, PR, telemarketing etc • Users o More cost-effective channels.ex – relationship manager • Employees o Secondary audience for communication campaigns through public media o Risk generating cynicism among employees if communication in question promotes levels of performance that are seen as unrealistic o Communications may be directed specifically at employees as part of internal marketing campaign, not accessible to customers
  16. 16. Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 6 - 20 Common Educational and Promotional Objectives in Service Settings (1) (Table 6.2) • Create memorable images of specific companies and their brands • Build awareness/interest for unfamiliar service/brand • Build preference by: o Communicating brand strengths and benefits o Comparing service with competitors’ offerings and countering their claims • Reposition service relative to competition • Stimulate demand in off-peak, discourage during peak
  17. 17. Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 6 - 21 Common Educational and Promotional Objectives in Service Settings (2) (Table 6.2) • Encourage trial by offering promotional incentives • Reduce uncertainty/perceived risk by providing useful info and advice • Provide reassurance (e.g., promote service guarantees) • Familiarize customers with service processes before use • Teach customers how to use a service to best advantage • Recognize and reward valued customers and employees
  18. 18. Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 6 - 22 Key Planning Considerations • Full understanding of service product and how well prospective buyers can evaluate its characteristics in advance • Knowledge of target market segments o Exposure to different media o Awareness of products and attitudes • Recognition of decisions to be made o Content, structure, and style of message o Manner of presentation o Most suitable media o Budget, time frames o Methods of measuring and evaluating performance
  19. 19. Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 6 - 23 The Marketing Communications Mix
  20. 20. Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 6 - 24 Marketing Communications Mix • Numerous forms of communication • Different forms have distinctive capabilities –depending on o Types of messages that can be conveyed o Market segments most likely to be exposed to them • Two types of communication o Personal communications: personalized messages that move in both directions between two parties o Impersonal communications: messages move in only one direction • Technology creates gray area between both o For example, combine word processing technology with information from database to create impression of personalization; interactive software;
  21. 21. Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 6 - 25 Marketing Communications Mix for Services (1) (Fig 6.5) Key: * Denotes communications originating from outside the organization Word-of-mouth (other customers) Personal communications Selling Customer service Training Advertising Broadcast, podcasts Print Internet Outdoor Direct mail Sales promotion Sampling Coupons Sign-up rebates Gifts Prize promotions Telemarketing Word of mouth *
  22. 22. Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 6 - 26 Key: * Denotes communications originating from outside the organization Publicity & public relations Press releases/kits Websites Manuals Brochures Interactive software Voice mail Signage Interior decor Vehicles Equipment Stationery Uniforms Media-initiated coverage * Marketing Communications Mix for Services (2) (Fig 6.5) Press conferences Sponsorship Special Events Trade Shows, exhibitions Instructional manuals Corporate design
  23. 23. Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 6 - 27 Sources of Messages Received by Target Audience (Fig 6.4) Messages originating within organization Messages originating outside organization Production channels Marketing channels Front-line staff Service outlets Advertising Sales promotions Direct marketing Personal selling Public relations Word of mouth Media editorial A U D I E N C E Sources Source: Adapted from a diagram by Adrian Palmer, Principles of Services Marketing, London: McGraw-Hill,4th ed., 2005, p. 397
  24. 24. Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 6 - 28 Messages Transmitted through Production Channels (1) • Developed within organization and transmitted through production channels that deliver the service itself • Customer service from front-line staff o Shape customer’s perceptions of service experience and the firm o Responsible for delivering supplementary services such as providing information, receiving payment, resolving problems, etc. o Firm may require customer service staff to cross-sell additional services
  25. 25. Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 6 - 29 Messages Transmitted through Production Channels (2) • Customer training o Familiarize customers with service product and teach them how to use it to their best advantage. Eg Sales Rep training customers use internet banking • Service outlets o Planned and unintended messages reach customers through the medium of the service delivery environment itself o Servicescape: Physical design of service outlet
  26. 26. Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 6 - 30 Messages through Marketing Channels: Personal Selling • Interpersonal encounters educate customers and promote preferences for particular brand or product o Common in b2b and infrequently purchased services o For example, insurance, property • Relationship marketing strategies based on account management programs o Customer assigned to a designated account manager o Ongoing need for advice, education, and consultation o For example, insurance, investment, medical services • Face-to-face selling of new products is expensive— telemarketing is lower cost alternative
  27. 27. Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 6 - 31 Messages through Marketing Channels: Trade Shows • Popular in b2b marketplace • Stimulate extensive media coverage • Many prospective buyers come to shows • Opportunity to learn about latest offerings from wide array of suppliers o Environment is very competitive o Compare and contrast o Question company reps • Physical evidence displayed through exhibits, samples, demonstrations
  28. 28. Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 6 - 32 Messages through Marketing Channels: Advertising • Build awareness, inform, persuade, and remind • Challenge: How does a firm stand out from the crowd? o Yankelovitch study shows 65% of people feel “constantly bombarded” by ad messages; 59% feel ads have little relevance o TV, radio broadcasts, newspapers, magazines, Internet, many physical facilities, transit vehicles—all cluttered with ads o Wide array of paid advertising media o Ads reinforced by direct marketing tools o Many e-tailers now using electronic recommendation agents (RI 6.2) • Effectiveness remains controversial • Research suggests that less than half of all ads generate a positive return on their investment
  29. 29. Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 6 - 33 • Mailings, recorded telephone messages, faxes, e-mail • Potential to send personalized messages to highly targeted microsegments o Need detailed database of information about customers and prospects Messages through Marketing Channels: Direct Marketing (1)
  30. 30. Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 6 - 34 • Advance in on-demand technologies empower consumers to decide how and when they prefer to be reached, and by whom o For example, e-mail spam filters, pop-up blockers, podcasting • Permission marketing: customers encouraged to “raise their hands” and agree to learn more about a company and its products in anticipation of receiving something of value o Enables firms to build strong relationships with customers o For example, people invited to register at a firm’s website and specify what type of information they like to receive via e-mail Messages through Marketing Channels: Direct Marketing (2)
  31. 31. Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 6 - 35 • Defined as “communication attached to 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 • Provides a “competitive edge” during periods when demand would be weak Messages through Marketing Channels: Sales Promotion (1)
  32. 32. Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 6 - 36 • Speeds up introduction and acceptance of new services • Interesting sales promotions can generate attention and put firm in favorable light (especially if interesting results publicized) o For example, SAS International Hotels—if a hotel had vacant rooms, guests older 65 years old could get a discount equivalent to their years o 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! Messages through Marketing Channels: Sales Promotion (2)
  33. 33. Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 6 - 37 • PR/publicity involves efforts to stimulate positive interest in an organization and its products through third parties o For example, 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 o For example, FedEx safely transported two giant pandas from Chengdu, China, to the National Zoo in Washington, D.C. in a FedEx aircraft renamed FedEx PandaOne Messages through Marketing Channels: Public Relations
  34. 34. Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 6 - 38 Messages Originating from Outside the Organization (1) • Word of Mouth (WOM) o Recommendations from other customers viewed as more credible o Strategies to stimulate positive WOM  Referencing other purchasers and knowledgeable individuals  Creating exciting promotions that get people talking about firm’s great service  Developing referral incentive schemes  Offering promotions that encourage customers to persuade others to join them in using the service  Presenting and publicizing testimonials that stimulate WOM • Pass along e-mails—consumers’ motivation, attitudes, and behaviors
  35. 35. Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 6 - 39 Messages Originating from Outside the Organization (2) • Blogs—a new type of online WOM • Editorial coverage o Compares, contrasts service offerings from competing organizations o Advice on “best buys”
  36. 36. Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 6 - 40 Ethical Issues in Communication • Advertising, selling, and sales promotion all lend themselves easily to misuse • 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
  37. 37. Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 6 - 41 Role of Corporate Design
  38. 38. Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 6 - 42 Strategies for Corporate Design (1) • Many service firms employ a unified and distinctive visual appearance for all tangible elements o For example, logos, uniforms, physical facilities • Provide a recognizable theme linking all the firm’s operations in a branded service experience through strategic use of physical evidence o e.g., BP’s bright green and yellow service stations • Use of trademarked symbol as primary logo, with name secondary o Shell’s yellow scallop shell on a red background o MacDonald’s “Golden Arches”
  39. 39. Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 6 - 43 • International companies need to select designs carefully to avoid conveying a culturally inappropriate message Strategies for Corporate Design (2)
  40. 40. Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 6 - 44 FedEx: Use of Company Name In Corporate Design (1) • Changed trade name from Federal Express to FedEx • Distinctive logo featuring new name • Chose FedEx Ground when decided to rebrand the RPS ground delivery service it had purchased some years earlier o Transfer positive image of its air services to less expensive small-package ground service
  41. 41. Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 6 - 45 FedEx: Use of Company Name In Corporate Design (2) • Created “FedEx family of companies” consisting of subbrands for different services o FedEx Express o FedEx Ground o FedEx Home Delivery o FedEx Freight o FedEx Custom Critical o FedEx Supply Chain Services o FedEx Kinko’s • Each subbrand has different color scheme for second word to create differentiation for subbrands o Express is red/orange o Ground is green
  42. 42. Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 6 - 46 Marketing Communications and the Internet
  43. 43. Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 6 - 47 Marketing Communications and the Internet • Can be accessed from almost anywhere in the world • Simplest form of international market entry available “The firm cannot avoid creating interest in its offerings outside its local or national market” Christian Grönroos
  44. 44. Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 6 - 48 Internet Marketing Offers Powerful Opportunities for Interactivity (1) • Internet used for a variety of communications tasks o Promoting consumer awareness o Providing information and consultation o Facilitating two-way communications o Enabling customers to place orders • Can market through firm’s own websites or advertise on other sites o Supplement conventional communications channels at reasonable cost
  45. 45. Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 6 - 49 Internet Marketing Offers Powerful Opportunities for Interactivity (2) • Must be part of integrated, well-designed communications strategy • Able to establish rapport with individual customers o Interactive nature of the Internet can increase customer involvement o Facilitates permission marketing and “self-service” marketing  Banks allow customers to pay bills electronically, apply for loans over the Internet, and check account balances online
  46. 46. Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 6 - 50 Website Design Considerations (1) • Contain useful, interesting information for target customers • Facilitate self-service in information gathering • Users expect o Fast access o Easy navigation o Relevant and up to date content
  47. 47. Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 6 - 51 Website Design Considerations (2) • Firms must set explicit communication goals for websites • Design should address attributes that affect website “stickiness” o Content quality o Ease of use o Speed of download o Frequency of update • Memorable web address helps attract visitors to a site o Ensure that people are aware of/can guess firm’s web address
  48. 48. Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 6 - 52 EasyJet Paints Its Website Address on Each of Its More than 200 Aircraft Source: www.easyjet.com/EN/About/photogallery.html. © easyJet airline company limited
  49. 49. Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 6 - 53 Effective Advertising on Internet: Banner Advertising (1) • Placing advertising banners and buttons on portals such as Yahoo!, Netscape and other firms’ websites • Draw online traffic to the advertiser’s own site • Websites often include advertisements of other related, but noncompeting services o Advertisements for financial service providers on Yahoo!’s stock quotes page o Small messages from Amazon.com on web pages devoted to a specific topic o Links relevant to e-mail content on GMail
  50. 50. Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 6 - 54 Effective Advertising on Internet: Banner Advertising (2) • Easy for advertisers to measure how many visits to its own website are generated by click-throughs • Limitations o Obtaining many exposures (“eyeballs”) to a banner does not necessarily lead to increase in awareness, preference, or sales o Problem of fraudulent click-throughs designed to boost apparent effectiveness
  51. 51. Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 6 - 55 • 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 o Pay for targeted placement of ads to relevant keyword searches o Sponsor a short text message with a click-through link o Buy top rankings in the display of search results Effective Advertising on Internet: Search Engine Advertising (1)
  52. 52. Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 6 - 56 • Google – The New Online Marketing Powerhouse o Google AdWords—allows businesses to connect with potential customers at the precise moment when they are looking at related topics; advertisers can display their ads at websites that are part of the Google content network o Google AdSense—In return for displaying relevant Google ads on their websites, publishers receive a share of advertising revenue generated Effective Advertising on Internet: Search Engine Advertising (2)
  53. 53. Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 6 - 57 Developing an Integrated Marketing Communications Strategy • Isolating online marketing activities from other marketing activities may result in conflicting message o Customers will not have a clear picture of a firm’s positioning and value proposition • 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 (need consistency within campaigns about specific service products targeted at specific segments)
  54. 54. Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 6 - 58 Summary of Chapter 6: Educating Customers & Promoting the Value Proposition (1) • Marketing communications adds value through its content • Communicating services presents both challenges and opportunities o Overcome problems of intangibility—use metaphors to communicate value proposition o Facilitate customer involvement in production o Help customers to evaluate service offerings o Stimulate or dampen demand to match capacity o Promote the contribution of service personnel • Communication planning involves knowing (5Ws) o Who is our target audience? o What do we need to communicate and achieve? o How should we communicate this? o Where should we communicate this? o When do communications need to take place?
  55. 55. Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 6 - 59 Summary of Chapter 6: Educating Customers & Promoting the Value Proposition (2) • Marketing communications originate from within the organization through production and marketing channels • Production channels include o Front-line employees and call center staff o Service outlets o Self-service delivery points • Marketing channels include o Advertising o Public relations o Online marketing o Website o Direct marketing o Sales promotion o Personal selling
  56. 56. Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 6 - 60 Summary of Chapter 6: Educating Customers & Promoting the Value Proposition (3) • Marketing communications originating from outside organization include o Word of mouth o Blogs and online ratings o Media editorial • Corporate design strategies are part and parcel of communication mix • Internet is now a key communications element, offering powerful opportunities for interactivity o Website considerations such as ease of use and speed of download need to be addressed o Effective advertising involves banner advertising and search engine advertising • Need to coordinate all marketing communication efforts
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