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Slide ©2004 by Christopher Lovelock and Jochen Wirtz Services ...

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Slide ©2004 by Christopher Lovelock and Jochen Wirtz Services ...

  1. 1. Chapter 5 Designing the Communications Mix for Services
  2. 2. Advertising Implications for Overcoming Intangibility (Fig. 5-1) <ul><li>Problem Advertising Strategy </li></ul><ul><li>Generality </li></ul><ul><li>- objective claims Document physical system capacity Cite past performance statistics </li></ul><ul><li>- subjective claims Present actual service delivery incident </li></ul><ul><li>Nonsearchability Present customer testimonials </li></ul><ul><li>Cite independently audited performance </li></ul><ul><li>Abstractness Display typical customers benefiting </li></ul><ul><li>Impalpability Documentary of step-by-step process, </li></ul><ul><li>Case history of what firm did for customer </li></ul><ul><li>Narration of customer’s subjective experience </li></ul>Source: Mittal and Baker
  3. 3. Other Communications Challenges in Services Marketing <ul><li>Facilitate customer involvement in production </li></ul><ul><ul><li>prepare customers for service experience and demonstrate roles </li></ul></ul><ul><ul><li>teach customers about new technologies, new features </li></ul></ul><ul><li>Help customers to evaluate service offerings </li></ul><ul><ul><li>provide tangible or statistical clues to service performance </li></ul></ul><ul><ul><li>highlight quality of equipment and facilities </li></ul></ul><ul><ul><li>emphasize employee qualifications, experience, professionalism </li></ul></ul><ul><li>Simulate or dampen demand to match capacity </li></ul><ul><ul><li>provide information about timing of peak, off-peak periods </li></ul></ul><ul><ul><li>offer promotions to stimulate off-peak demand </li></ul></ul><ul><li>Promote contribution of service personnel </li></ul><ul><ul><li>help customers understand service encounter </li></ul></ul><ul><ul><li>highlight expertise and commitment of backstage personnel </li></ul></ul>
  4. 4. Setting Clear Objectives: Checklist for Marketing Communications Planning (“5 Ws”) <ul><li>W ho is our target audience? </li></ul><ul><li>W hat do we need to communicate and achieve? </li></ul><ul><li>Ho w should we communicate this? </li></ul><ul><li>W here should we communicate this? </li></ul><ul><li>W hen do communications need to take place? </li></ul>
  5. 5. Common Educational and Promotional Objectives in Service Settings (Table 5-2) <ul><li>Create memorable images of specific companies and their brands </li></ul><ul><li>Build awareness/interest for unfamiliar service/brand </li></ul><ul><li>Build preference by communicating brand strengths and benefits </li></ul><ul><li>Compare service with competitors’ offerings and counter their claims </li></ul><ul><li>Reposition service relative to competition </li></ul><ul><li>Stimulate demand in off-peak and discourage during peak </li></ul>
  6. 6. Educational and Promotional Objectives (cont.) <ul><li>Encourage trial by offering promotional incentives </li></ul><ul><li>Reduce uncertainty/perceived risk by providing useful info and advice </li></ul><ul><li>Provide reassurance (e.g., promote service guarantees) </li></ul><ul><li>Familiarize customers with service processes before use </li></ul><ul><li>Teach customers how to use a service to best advantage </li></ul><ul><li>Recognize and reward valued customers and employees </li></ul>
  7. 7. Marketing Communications Mix for Services (Fig. 10.4) Word-of-mouth (other customers) Personal Communications Selling Customer service Training Advertising Broadcast Print Internet Outdoor Direct mail Sales Promotion Sampling Coupons Sign-up rebates Gifts Prize promotions Publicity & Public Relations Press releases/kits Press conferences Special events Sponsorship Instructional Materials Web sites Manuals Brochures Video- audiocassettes Software CD-ROM Voice mail Signage Interior decor Vehicles Equipment Stationery Uniforms Corporate Design Telemarketing Word of mouth Trade Shows, Exhibitions Media-initiated coverage * Key: * Denotes communications originating from outside the organization
  8. 8. Originating Sources of Messages Received by a Target Audience (Fig. 5-5) A U D I E N C E Messages originating within the organization Messages originating outside the organization Production Channels Marketing Channels Front-line staff Service outlets Advertising Sales promotions Direct marketing Personal selling Public relations Word of mouth Media editorial
  9. 9. What is Brand Equity and Why Does It Matter? (From Berry, “Cultivating Brand Equity”) <ul><li>Definition: A set of assets and liabilities linked to a brand’s name and symbol that adds to (or subtracts from) the perceived value of the product </li></ul><ul><li>Insights </li></ul><ul><li>Brand equity can be positive or negative </li></ul><ul><li>Positive brand equity creates marketing advantage for firm plus value for customer </li></ul><ul><li>Perceived value generates preference and loyalty </li></ul><ul><li>Management of brand equity involves investment to create and enhance assets, remove liabilities </li></ul>
  10. 10. A Service Branding Model: How Communications + Experience Create Brand Equity Firm’s Presented Brand (Sales, Advertising, PR) What Media, Intermediaries, Word-of-Mouth Say re: Firm Customer’s Experience with Firm Awareness of Firm’s Brand Meaning Attached To Firm’s Brand Firm’s Brand Equity Source: Adapted from L. L. Berry ( Fig. 1) Marketer-controlled communications Uncontrolled brand communications
  11. 11. Marketing Communication and the Internet (1) <ul><li>International in Scope </li></ul><ul><ul><li>Accessible from almost anywhere in the world </li></ul></ul><ul><ul><li>Simplest form of international market entry </li></ul></ul><ul><li>Internet Applications </li></ul><ul><ul><li>Promote consumer awareness and interest </li></ul></ul><ul><ul><li>Provide information and consultation </li></ul></ul><ul><ul><li>Facilitate 2-way communications through e-mail and chat rooms </li></ul></ul><ul><ul><li>Stimulate product trial </li></ul></ul><ul><ul><li>Enable customers to place orders </li></ul></ul><ul><ul><li>Measure effectiveness of specific advertising/promotional campaigns </li></ul></ul>
  12. 12. Marketing Communications and the Internet (2) <ul><li>Web Site design considerations </li></ul><ul><ul><li>Memorable address that is actively promoted </li></ul></ul><ul><ul><li>Relevant, up-to-date content (text, graphics, photos) </li></ul></ul><ul><ul><li>Contain information that target users will perceive as useful/interesting </li></ul></ul><ul><ul><li>Easy navigation </li></ul></ul><ul><ul><li>Fast download </li></ul></ul><ul><li>Internet advertising </li></ul><ul><ul><li>Banners and buttons on portals and other websites seek to draw online traffic to own site </li></ul></ul><ul><ul><li>Limits to effectiveness—exposure (“eyeballs”) may not lead to increases in awareness/preference/sales </li></ul></ul><ul><ul><li>Hence, advertising contracts may tie fees to marketing relevant behavior (e.g., giving personal info or making purchase) </li></ul></ul>

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