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Services Marketing - Marketing Communications-2
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Services Marketing - Marketing Communications-2


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Modern marketing process involves something more than Just developing a good product (the First P), Pricing it attractively (the Second P), and Making it accessible (the Third P).
It also calls for communication with the present and potential stakeholders and the general public (the Fourth P). Marketing communications, in one form or another, are essential to a company's success.
For most companies today, the question is not whether to communicate, but rather what to say, to whom, and how often. So managers need to debate the question: “How should the Marketers communicate what our service has to offer?”
In addition to being a global force, communication is the unique tool that marketers use to persuade the consumers to act in a desired way, say to vote, to buy, to donate, to patronise, etc.
The location and atmosphere of a service delivery facility, corporate design features like the consistent use of colours and graphic elements, the appearance and behaviour of employees, website design—all of these factors contribute to an impression in the customer's mind.
Communications are in many forms, like verbal, visual or symbolic, and convey special meaning that the marketers want to impart to the consumers. Communications can evoke emotions that put consumers in more receptive frames of mind, and it can encourage purchases that help consumers solve problems or avoid negative outcomes.
In short, Communications is the bridge between marketers and consumers, and between consumers and their socio-cultural environments.
Definition of Sales Promotion :
Sales Promotion is an MC function that offers a tangible added value designed to motivate and accelerate a response.
“Adding tangible value” means offering something more to the buyers who respond to SP.
Examples may be 20% price off, 20% more goods, free samples of other products, “buy two get three”, one soap case free with two soaps, free talk time with handset, etc. SPs are mostly for a “limited period only”,
There are two basic types of SP, like :
Consumer Promotions :
The consumer promotions are targeted and designed for the end users directly.
Here, the marketers use a PULL strategy, which is the use of incentives to motivate end users to purchase a brand and thus put pressure on the retailer to stock that brand.
The consumers thus “PULL” the products thro’ the distribution line towards themselves.
Trade Promotions :
The trade promotions are targeted and designed for members of the distribution channels, such as distributors, wholesalers, retailers.
Here, the marketers use a PUSH strategy, which is the use of incentives to motivate the buying and reselling of products.
The traders thus “PUSH” the products down the distribution line towards the consumers.

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  • 2. Definition of Sales Promotion : • Sales Promotion is an MC function that offers a tangible added value designed to motivate and accelerate a response. • “Adding tangible value” means offering something more to the buyers who respond to SP. • Examples may be 20% price off, 20% more goods, free samples of other products, “buy two get three”, one soap case free with two soaps, free talk time with handset, etc. SPs are mostly for a “limited period only”, • There are two basic types of SP, like : 2
  • 3. Consumer Promotions : • The consumer promotions are targeted and designed for the end users directly. • Here, the marketers use a PULL strategy, which is the use of incentives to motivate end users to purchase a brand and thus put pressure on the retailer to stock that brand. • The consumers thus “PULL” the products thro’ the distribution line towards themselves. 3
  • 4. Trade Promotions : • The trade promotions are targeted and designed for members of the distribution channels, such as distributors, wholesalers, retailers. • Here, the marketers use a PUSH strategy, which is the use of incentives to motivate the buying and reselling of products. • The traders thus “PUSH” the products down the distribution line towards the 4
  • 5. Actions in various Lifecycle Stages INTRODUCTION GROWTH MATURITY DECLINE To Inform To Persuade To remind To wind up Publicity Reminder Advertising Sales Promotion in form of free samples Advertising to the brand attributes from those of competing brand Sales Promotion in forms of discounts and coupons Decrease the Marketing Communications Budget Sales force calling on Intermediaries Personal selling to intermediaries Limited personal selling Launching of a new or Re- launching of Product Advertising Direct Mail Reminders 5
  • 7. Promotional Strategies For Services • Sampling : It’s a technique for promoting products by offering them as a sample free of cost. It’s more widely used for packaged or physical goods. However, some service industries like credit card companies travel and tourism companies offer free services during the promotional period. For example, some credit card companies offer cards without initial charges. • Premiums : Premiums provide tangibility to services. This is used more regularly in insurance sectors where differentiation of services is not possible. An insurance company might fix the premiums depending on the initial deposits of the amount of policy insured by the customers. 7
  • 8. Promotional Strategies For Services • Prize Promotions : Prize promotions are adopted to keep up the interest of customers and involve them in the service consumption. • Price / Quantity Promotions : These promotions include reduction of price for a category of customers, or all customers for a limited time. For example, a company might offer a price reduction for the first fifty customers who will consume the 8
  • 9. Promotional Strategies For Services • Refunds and Future Discounts : These type of promotions aim to increase brand loyalty among customers and promise them certain amount of refund or discounts in future. For example, several airlines offer discounts as per the mileage points collected by the frequent fliers. • Coupons : Coupons may be offered for a direct reduction in prices, free services for one or more persons with the original customer, or a discount on the original service offer. 9
  • 10. Setting Communication Objectives • When planning a campaign, marketers need to formulate specific communications objectives and select the most appropriate messages and tools to achieve them. • For the campaign plan to succeed, customers must be informed about these new features and educated on how to take advantage of them. A specific set of communications objectives might be: 10
  • 11. Setting Communication Objectives • (1) to create awareness of the new offering among all existing customers; • (2) to attract the attention of prospective customers in the business traveller segment, inform them of the new features, and teach them how to use the new procedures effectively; • (3) to stimulate inquiries and increase pre- bookings; and • (4) to generate an increase in repeat patronage of 20 percent after six months. 11
  • 12. Setting Communication Objectives • Planning a marketing communications campaign should reflect a good understanding of the service product and the ability of prospective buyers to evaluate its characteristics in advance of purchase. • It's also essential to understand target market segments and their exposure to different media, as well as consumer awareness of the product and attitudes toward it. 12
  • 13. Setting Communication Objectives • Decisions include determining the content, structure, and style of the message to be communicated, its manner of presentation, and the media most suited to reaching the intended audience. • Additional considerations include: the budget available for execution; time frames (as defined by such factors as seasonality, market opportunities, and anticipated competitive activities); and methods of measuring and evaluating 13
  • 14. How To Design A Service Promotion : • Designing a successful promotion is not easy and involves inclusion of tangible attributes, which adds up the cost of campaign. A service provider should try to • (1) identify the services to be promoted, • (2) choose the target audience, • (3) estimate the value to be added, • (4) decide the timing and duration of the promotional campaign, • (5) the techniques to be used, and finally, • (6) determine how the promotion is different from those of the competitors. 14
  • 15. Which Service to Promote : • If the service provider is under heavy pressure from competition and his aim is to survive in the market, he may opt to promote his services accordingly. • If a service provider’s aim is to attract new customers then he should opt to promote a low-risk and relatively inexpensive service which will do the job successfully. 15
  • 16. Which Service to Promote : • Once new customers are attracted to the service, a service provider can sell other services apart from the original service offered (cross-selling). • On the other hand if the service provider’s aim is to stop the competition from snatching away customers a service provider can opt to increase the period of contract with customers. 16
  • 17. Who would be Target Consumer : • Service companies have an opportunity to target their promotional campaigns to a specific market segment or to the entire market. • This kind of promotion targeted at demographic segments is not possible in packaged goods industry. • Further services are flexible compared to packaged goods and have numerous opportunities for price differentiation. 17
  • 18. What would be the Value added to the Product / Brand : • Service providers should be careful when assessing the value to be offered to the customer. Factors like promotional objective, costs of promotion, and customer perceptions of value should be considered while developing value promotions. These can be of two types : –One is offering more for the same price, –The other is offering the same for a lower or discounted price. 18
  • 19. Is the Timing right for promotion and how long should a Promotional Campaign run : • The timing of the promotional campaign depends on the d • demand fluctuations in the service demand. The duration of the promotional campaign should be based on the value of the service offering, the target consumers’ purchasing power and finally it should be extended to make sure that most of the customers are covered by the campaign. • The frequency of promotions depends on the existing competition in the market and the target customer’s purchase cycle. 19
  • 20. Who’s benefited from the Promotion : • Service providers should carefully identify the group of customers whose purchase behaviour needs to be influenced by the promotional campaign. • After identifying the target customers, companies should verify if the end customer is benefited directly. For example, sometimes, the company sponsoring employees’ flights get the benefit of frequent fliers programme. 20
  • 21. How to Differentiate a Promotional Campaign : • A service provider who has designed an innovative promotional campaign soon finds hid competitor in the market imitating it. • To avoid this, a service provider should design a promotional campaign that can’t be easily imitated by competitors. • Otherwise, it should enter into agreements with other service companies to develop joint-promotions that make it impossible for the competitors to imitate easily. 21
  • 22. Strategies For Effective Promotion : • Some service companies no doubt design good promotional campaigns but use up or waste too much of resources like, time, money, effort, thereby greatly reducing the net outcome. • The following are the guidelines for implementing effective promotional campaigns : 22
  • 23. 1. Effective Planning : • Service organisations should develop a programme calendar to monitor the sequence of promotional events. • Further an exclusive promotion department in the marketing division of an organisation would help a service company monitor the promotional process continuously. • This would result in variety and innovativeness in the promotions, and a common thread of consistency can be maintained in developing the various 23
  • 24. 2. Focussed Objectives : • Service providers should set a few objectives, as it will help them to do a better job. • The choice of objectives should be according to their promotional expenditures rather than expecting too much from a single campaign and hoping to achieve too many objectives with one promotion. 24
  • 25. 3. Accurate Timing : • Service providers should decide on the timing of the promotional campaign, its duration, and the frequency of such campaigns. • Service providers should not extend the campaign to the extent that consumers tend to think it’s a permanent offer. These situations can cost the service provider heavily. 25
  • 26. 4. Adding Value through tie-ups and promotion overlays : • Often, service providers offer promotions in packages either by including other services of their own company or by tying-up with other service companies. • Further, if service providers tie-up with packaged goods then these promotional offers are quite attractive. 26
  • 27. 5. Employee Motivation : • A successful promotional campaign requires the efforts of the entire sales force and the marketing team. • Therefore, service companies should motivate their employees, consumers, sales intermediaries, etc. by using both PUSH and PULL strategies effectively. 27
  • 28. 6. Well Differentiated Campaign : • Service companies should ensure that their promotional campaigns are well understood and well-differentiated from those of their competitors. 28
  • 29. 7. Regular Evaluation of Campaigns • Service campaigns should evaluate increase in sales due to the launch of promotional campaigns. • This helps them assess the value- added by the promotions and evaluate their campaigns to identify avenues for improvement. 29
  • 30. MARKETING COMMUNICATIONS AND THE INTERNET • The Internet is playing an increasingly important role in marketing communications. Few companies of any size are now without a Web site and a substantial industry has sprung up to support the design and implementation of Internet-based marketing activities. • Perhaps the most remarkable aspect of the Internet is its ubiquity : A Web site hosted in one country can be accessed from almost anywhere in the world, offering the simplest form of international market entry available. 30
  • 31. MARKETING COMMUNICATIONS AND THE INTERNET • In fact, as Christian Gronroos points out, "the firm cannot avoid creating interest in its offerings outside its local or national market." • However, creating international access and developing an inter- national strategy are two very different things! 31
  • 32. Internet Applications • Marketers use the Internet for a variety of communications tasks. These include : • promoting consumer awareness and interest, • providing information and consultation, • facilitating two-way communications with customers through e-mail and chat rooms, • stimulating product trial, • enabling customers to place orders, and • measuring the effectiveness of specific advertising or promotional campaigns. 32
  • 33. Internet Applications • Firms can market through their own Web sites and place advertising on other sites. • Advertising on the Web allows companies to supplement conventional communications channels at a reasonable cost. • But like any of the elements of the marketing communications mix, Internet advertising should be part of an integrated, well-designed 33
  • 34. Internet Applications • Many early Web sites were little more than electronic brochures, featuring attractive graphics that took too long to download. • By contrast, interactive Web sites allow customers to engage in dialog with a database and come up with customised information. • Transportation firms like airlines and railroads offer interactive sites that allow travellers to evaluate alternative routes and schedules for specific dates, download printed information, and make reservations online. • Some sites offer discounts on hotels and airfare if reservations are made over the Internet—a tactic designed to draw customers away from intermediaries like travel agents. 34
  • 35. Internet Applications • The interactive nature of the Internet has the potential to increase customer involvement dramatically, since it enables "self-service" marketing in which individual customers control the nature and extent of their contact with the Web sites they visit. • Many banks allow customers to pay bills electronically, apply for loans over the Internet, and check their account 35
  • 36. "Permission Marketing" • Enabling marketers to communicate and establish a rapport with individual customers is one of the Web's greatest strengths. • These characteristics lend themselves to a new communications strategy called "Permission Marketing", which is based on the idea that traditional advertising doesn't work as well any more because it fights for attention by interrupting people. • For example, a 30-second television spot interrupts a viewer's favourite program, a telemarketing call interrupts a meal, and a print ad interrupts the flow of a magazine or newspaper article. 36
  • 37. "Permission Marketing" • In the permission marketing model, the goal is to persuade consumers to "volunteer" their attention. • In essence, customers are encouraged to "raise their hands" and agree to learn more about a company and its products in anticipation of receiving something of value to them. • This means that customers self-select into the target segment. 37
  • 38. Internet Advertising • The Internet has become a new advertising medium. Many firms pay to place advertising banners and buttons on portals like Yahoo or Netscape, as well as on other firms 'Web sites. • The usual goal is to draw online traffic to the advertiser's own site. In many instances, Web sites include advertising messages from other marketers with related but noncompeting services. 38
  • 39. Internet Advertising • However, the Internet has not proved to be as effective an advertising medium as many marketers originally anticipated. • Experience shows that simply obtaining a large number of exposures ("eyeballs") to a banner ad or button doesn't necessarily lead to increases in awareness, preference, or sales for the advertiser. • One consequence is that the practice of paying a flat monthly rate for banner advertising is falling out of favour. 39
  • 40. Internet Advertising • Even when visitors click through to the advertiser's site, this action doesn't necessarily result in sales. • Consequently, there's now more emphasis on advertising contracts that tie fees to marketing-relevant behaviour by these visitors, such as providing the advertiser with some information about themselves or making a purchase. 40
  • 41. Reciprocal Marketing • Some companies use reciprocal marketing, where an online retailer allows its paying customers to receive promotions for another online retailer and vice-versa, at no upfront cost to either party. • For example, customers received an online coupon offer from Starbucks when they logged onto the Red Envelope site. In exchange, Red Envelope had a promotional link on, enabling both companies to capture a percentage of the other site's41
  • 42. ETHICAL ISSUES IN MARKETING COMMUNICATION • A few aspects of marketing lend themselves so easily to misuse (and even abuse) as advertising, selling, and sales promotion. • The fact that customers often find it hard to evaluate services makes them more dependent on marketing communication for information and advice. • Communication messages often include promises about the benefits that customers will receive and the quality of service delivery. 42
  • 43. ETHICAL ISSUES IN MARKETING COMMUNICATION • When promises are made and then broken, customers are disappointed because their expectations have not been met. • Their disappointment and even anger will be even greater if they have wasted money, time, and effort and have no benefits to show in return or have actually suffered a negative impact. • Employees, too, may feel disappointed and frustrated as they listen to customers' complaints about unfulfilled expectations. 43
  • 44. ETHICAL ISSUES IN MARKETING COMMUNICATION • Some unrealistic service promises result from poor internal communications between operations and marketing personnel concerning the level of service performance that customers can reasonably expect. • In other instances, unethical advertisers and salespeople deliberately make exaggerated promises about the benefits that customers can hope to receive. 44
  • 45. ETHICAL ISSUES IN MARKETING COMMUNICATION • Finally, there are deceptive promotions that lead people to think that they have a much higher chance of winning prizes or awards than is really the case. • Fortunately, there are many consumer watchdogs on the lookout for these deceptive marketing practices. • They include consumer protection agencies, trade associations within specific industries, and journalists who investigate customer complaints and seek to expose fraud and misrepresentation. 45
  • 46. ETHICAL ISSUES IN MARKETING COMMUNICATION • A different type of ethical issue concerns unwanted intrusion into people's personal lives—including, perhaps, your own. • You can, of course, simply turn the page if you don't want to look at an advertisement in a newspaper or magazine. • Perhaps you ignore television advertising by pressing the mute button on your remote and by talking to friends or family members while the commercials are on. 46
  • 47. ETHICAL ISSUES IN MARKETING COMMUNICATION • However, the increase in telemarketing and direct mail is frustrating for those who receive unwanted sales communications. • How do you feel if your evening meal at home is interrupted by a telephone call from a stranger trying to interest you in buying services in which you have no interest? • Even if you are interested, you may feel, as many do, that your privacy has been 47
  • 48. ETHICAL ISSUES IN MARKETING COMMUNICATION • Trade associations like the Direct Marketing Association offer ways for consumers to remove their names from telemarketing and direct-mail lists in an attempt to address the growing hostility toward these types of direct-marketing techniques. • Ex. : Do Not Disturb Requests. 48
  • 49. END OF PART -2 © Himansu S M / 16-08-2013 49