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Service Marketing Ch. 7 Notes

by: Megan Angelo

Service Marketing Ch. 7 Notes Crim-26704-300

Megan Angelo
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About this Document

Chapter 7 Notes Promoting Services and Educating Customers
Issues in Law and Society
George M. Pickett
Class Notes
services, Marketing




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This 9 page Class Notes was uploaded by Megan Angelo on Saturday October 8, 2016. The Class Notes belongs to Crim-26704-300 at Kent State University taught by George M. Pickett in Fall 2016. Since its upload, it has received 6 views. For similar materials see Issues in Law and Society in Law and Legal Studies at Kent State University.

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Date Created: 10/08/16
Ch. 7 Promoting Services and Educating Customers 7.1 Role of Marketing Communications • Position and differentiate service • Promote contribution of personnel and backstage operations • Add value through communication content • Facilitate customer involvement in production • Stimulate or shift demand to match capacity 7.2 Challenges of Service Communications • May be difficult to communicate service benefits to customers, especially when intangible • Intangibility creates 4 problems: – Abstractness ○ Services have no one-to-one correspondence with physical objects – Generality ○ Physical objects representing the service are not specific enough – Non-searchability ○ Many service attributes cannot be evaluated before purchase – Mental impalpability ○ Customers find it hard to grasp benefits of complex, multidimensional, or new service offerings • To overcome intangibility – Use tangible cues in advertising – Use metaphors to communicate benefits of service offerings 7.3 Marketing Communications Planning 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? Target Audience: Three Broad Categories • Prospects – Employ traditional communication mix, because prospects are not known in advance • Users – More cost effective channels, based on knowledge of customers • Employees – Secondary audience for communication campaigns through public media – Shape employee behavior if they better understand customers; be careful not to over-promise on behalf of employees – Internal promotional activities may be directed only toward staff (see chapter 11) • Create memorable images of specific companies and their brands • Build awareness or interest for unfamiliar service/brand • Compare a service favorably with competitors’ offerings • Build preference by communicating brand strengths and benefits • Reposition service relative to competitive offerings • Reduce uncertainty and perceived risk by providing useful information and advice Common Educational and Promotional Objectives in Service Settings (2) • 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, shift during peak • Recognize and reward valued customers 7.4 The Marketing Communications Mix Advertising: Purposes: Build awareness, inform, persuade, and remind • Effectiveness remains controversial: – 65% of people feel “constantly bombarded” by ad messages (The Economist 2004) – 59% feel ads have little relevance (The Economist 2004) – Less than half of all ads generate a positive return on their investment (Shaw 2004) • Challenge: How to stand out from the crowd? – Longer, louder, larger is not the answer – For low involvement services, use emotional appeals and focus on the service – Use striking designs, formats, and humor – Consider new media such as video games, smartphone apps • Public Relations: Public relations (PR) stimulates positive media interest in an organization and its products – use press conferences, news releases, event sponsorships • Other PR techniques include: – Recognition and reward programs – Testimonials from public figures – Community involvement and fundraising • Unusual opportunities can be used to promote a company’s expertise – e.g. FedEx safely transported two giant pandas from Chengdu, China, to the National Zoo in Washington, D.C. in an aircraft renamed “FedEx PandaOne” • Direct Marketing: Uses a detailed database to send mailers, email, and text messages • Personalized messages can be sent to highly targeted customers – Need detailed database of information about customers and prospects • 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 persuades customers to volunteer their attention, and reaches individuals who express interest – e.g. people can register at a firm’s website and specify what type of information they like to receive via email – Enables firms to build stronger relationships with customers Sales Promotion: Consider it “communication with an incentive” (p. 201) • Usually 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 – Samples (e.g. short service experience) – Coupons/discounts – Gifts (possibly with purchase) – Competitions • Interesting sales promotions can generate attention and put firm in favorable light (especially if interesting results publicized) • Customers acquired via promotions tend to have lower repurchase rates and lifetime values Personal Selling: Interpersonal encounters educate customers and promote a particular brand or product • For infrequently purchased or complex services, the sales rep may act as a consultant • Many B2B firms have a dedicated sales force • Face-to-face selling of new products is expensive—telemarketing is a lower cost but potentially frustrating alternative Trade Shows: Popular in B2B marketplaces, where they include personal selling • Stimulate media coverage by providing new product information • Many suppliers and prospective buyers attend trade shows • Opportunity to see physical evidence in the form of exhibits, samples, demonstrations, and brochures (e.g. Sunkist provides cooking demonstrations in which chefs use citrus fruit) • Sales reps may generate five qualified leads per hour Company Website: Websites should offer quality content, be quick to open, easy to use, and updated frequently • Websites can: – Create consumer awareness and interest – Provide information and consultation – Allow two-way communication through email and chat rooms – Encourage product trial – Allow customers to place orders – Measure effectiveness of advertising or other promotional activities • Innovative companies look for ways to improve the appeal and usefulness of their sites – B2B sites may offer technical information – Consumer sites might include photos or videos Online Advertising: Banner advertising may appear on portals such as Yahoo, CNN, etc. – Draw online traffic to the advertiser’s own site – Websites may include advertisements of other related, not competing services – Increasing trend toward fees based on customers engaging in behaviors such as providing information or purchasing • Search engine advertising – Lets advertisers know exactly what consumers want through their keyword searches – Can target relevant messages directly to desired consumers – Options include paying for ads related to relevant keyword searches, sponsoring a short text message with a click- through link, and buying rankings in the display of search results Impersonal versus Personal Communications • These used to be different and separate, but technology has created a gray area • Although both are forms of direct marketing, direct mail and email can be personalized • Electronic recommendation agents can also personalize communications • With advances in on-demand technologies, consumers are increasingly empowered to decide how and when they like to be reached (see Service Insights 7.3) Messages through Service Delivery Channels • Service outlets – Planned and unintended messages are sent through banners, posters, signage, brochures, video screens, audio etc. – It is important how the servicescape is designed (chapter 10) • Frontline employees – Serve customers face-to-face, by phone, or by email – Communications may be related to the core service or to supplementary services – New customers in particular may need help – Personal experiences can impact brand equity (remember the service journals?) • Self-service delivery points – ATMs, vending machines and websites are examples; they require communications about how to use them Messages Originating from Outside the Organization • Word of Mouth (WOM) – Recommendations from other customers are viewed as credible, and reduce customer risk – Strategies to encourage satisfied customers to share WOM: ○ Create exciting promotions that get people talking ○ Offer promotions that encourage customers to persuade others to join them in the service ○ Develop referral incentive schemes ○ Reference other buyers and knowledgeable people ○ Present and publicize testimonials • Blogs – A new type of online WOM – Communications about customer experiences influence opinions of brands and products – Some firms monitor blogs as a form of market research and feedback • Twitter – Becoming increasingly popular – was the fastest-growing social networking service • Media Coverage – Compares, contrasts service offerings from competing organizations – Consumer affairs journalists offer advice on “best buys” Ethical Issues in Communication • Consumers find services difficult to evaluate, making them more dependent on marketing communications • Communications often include promises about benefits and quality of service; this leads to unmet customer expectations • Why do expectations go unmet? – Poor internal communications between operations and marketing personnel concerning level of service performance – Overpromising in order to secure sales – Deceptive promotions • Unwanted intrusion by telemarketers, direct mail, and email into people’s personal lives 7.5 The Roles of Corporate Design • Many service firms employ a unified and distinctive visual appearance for all tangible elements, such as logos, uniforms, physical facilities • Colors provide recognition and strengthen brand image – e.g. BP’s bright green and yellow service stations • Company names may be incorporated into logos or designs – e.g. “FedEx” is featured within its new logo • A trademarked symbol may be widely recognized – e.g. McDonald’s “Golden Arches” • Create tangible recognizable symbols associated with brands – e.g. Qantas’ use of the kangaroo


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