Chapter 6

Dedications v
About the Authors vi

About the Contributors of the Cases xi
Preface xxiii
Acknowledgements xxxiii
Part I: Understanding Service Products, 2
Consumers and Markets
Chapter 1 Introduction to Services Marketing 4
Chapter 2 Consumer Behavior in a Services Context 32
Chapter 3 Positioning Services in Competitive Markets 56
Part II: Applying the 4Ps to Services 82
Chapter 4 Developing Service Products:
Core and Supplementary Elements 84
Chapter 5 Distributing Service hrough Physical and
Electronic Channels 110
Chapter 6 Setting Prices and Implementing Revenue Management 134
Chapter 7 Promoting Services and Educating Customers 168
Part III: Managing the Customer Interface 196
Chapter 8 Designing and Managing Service Processes 198
Chapter 9 Balancing Demand Against Productive Capacity 228
Chapter 10 Crafting the Service Environment 252
Chapter 11 Managing People for Service Advantage 276
Part IV: Implementing Profitable Service Strategies 304
Chapter 12 Managing Relationships and Building Loyalty 306
Chapter 13 Complaint Handling and Service Recovery 338
Chapter 14 Improving Service Quality and Productivity 365
Chapter 15 Organizing for Change Management and
Service Leadership 408
Part V: Cases 430
Glossary 541
Credits 549
Name Index
Subject Index
Brief Contents
561
3 55
T
i-xxxii_ESM_SL.indd 1 8/15/08 4:45:29 PM
168 Chapter 7 Promoting Services and Educating Customers
..
C
H
A
P
T
E
R
7
LEARNING OBJECTIVES
By the end of this chapter, students should be able to:
LO 1
LO 2
Discuss the role of marketing
communications in services.
Understand the challenges of
service communications.
Know the 5 Ws of marketing
communications planning.
Describe the variety of
marketing communication tools
that can be used.
Identify the different
sources of communications
messages received by the
target audience and the
different communication
tools related to the source
of communications.
Understand the role
of corporate design in
communications.
promoting services and
EDUCATING
CUSTOMERS
LO 3
LO 4
THE WESTIN HOTELS AND RESORTS NEW
MULTI-MILLION GLOBAL AD CAMPAIGN
HELPS YOU TO EXPERIENCE THE BRAND
It was an experiential campaign to make it seem as if people were
actually undergoing the experience. Imagine this. After a long tiring
day at work, you take that slow walk to the subway station. When you
ride on the escalator, you suddenly feel as if you are in the middle of
a rushing waterfall. This is because you are looking at the escalator
wrap. Somehow, you feel less tired and a little more refreshed. When
you step into the train, you are a little lost for a moment and wonder
OPENING VIGNETTE
1

Figure 7.1 Spires of the Westin
Bonaventure at sunrise,
downtown Los Angeles.
LO 5
LO 6
Applying the 4Ps to Services 169
P
A
R
T

I
I
..
where you are. The car seems transformed into a sauna. Your mind tries hard to
understand what has happened. Since all the seats are taken, you walk further
along and instead of the wooden panels of the sauna, you step into a striking blue
environment at the next car. Now, you feel as if you are in the Underwater World
theme park! Curious, you decide to explore the other cars to see what you would be
able to nd. You discover that you can be in the green rainforest, or the white snow
covered mountains. It is almost like taking a holiday around the world! After your
round the world trip, you decide to take a seat at Iceland. That is when something
else catches your attention. When the train moves, you see the effects of a ower
slowly bloom as the train passes by some portion of walls along the tunnel. As you
journey further, you see waves crashing. By the time you leave the subway, you
feel as if you have lived a lifetime of experiences that leave you feeling refreshed
even though it is the end of a work day! You have just been through the Westin
experience.
Westin Hotel spent $30 million on this campaign, called This is How it Should Feel.
The campaign uses a range of traditional and non-traditional media like print, radio,
online and multiplatform. There are more than 270 different visuals and 2,754 media
placements. The different experiences in the train itself are part of the shuttle wrap.
Apart from that, they also used escalator and column wraps. The blooming ower
is part of the sub-media, which uses the motion of the train to have the images on
the wall of the tunnel move like a giant ipbook. They also used image shifting
lenticulars (ads that change as you move) that may change from an emergency exit
door to a forest. Outdoors, there were larger-than-life three dimensional billboards
spread over ve major cities in the United
States. In Boston, for example, there are a few
three-dimensional skydivers placed in front of a
beautifully printed sky.
This very interesting campaign tells the guests
what they will feel at a Westin. It will be a
relaxing, renewing and personal experience.
Starwood, the parent company, wanted to
reposition and redene the brands of hotels
in its group and embarked on this campaign
to reinforce Westins new position as one of
personal renewal.
promoting services and
EDUCATING
CUSTOMERS
...Te sleepy
routine of
commuters
across major
cities in America
is given a bit
of pep by
the Westin
Experience...
Figure 7.2 Chicagoans are transported
to an exotic mountain side while using
the escalator in Union Station.
Figure 7.3 Manhattanites explore the
depths of the sea while transiting.
P
A
R
T

I
I
THE ROLE OF MARKETING
COMMUNICATIONS
T
here is a lot of confusion over the
scope of marketing communi-
cations. Some people still dene this
element of the services marketing mix
too narrowly. Communications is more
than just advertising, public relations
and professional salespeople. It is for
good reason that we dene the marketing
communication element of the 7 Ps
as Promotion and Education. Trough
communication, marketers explain and
promote the value proposition that their
rm is oering. In the Westin campaign,
they use experiential advertising to
communicate an experience of renewal.
It is a promise of what customers can
expect if they stay at the Westin hotels.
Marketing communication is very important for a companys success. Without
eective communication, potential customers may never learn of a service rms
existence. Tey may not know the oerings available and the value proposition of
each of its products (Figure 7.4). Let us look at some specic roles performed by
marketing communication.
Position and Differentiate the Service
Companies use marketing communications to persuade target customers that
their service product oers the best solution to meet their needs, compared to
the competing oerings (Figure 7.5). Communication eorts serve not only
to attract new users but also to maintain contact with existing customers and
build relationships with them. Marketing communications is used to convince
target customers about the rms superior performance on determinant
attributes (see Chapter 3).
Help Customers to Evaluate Service Offerings
and Highlight Differences that Matter
Even if customers understand what a service is supposed to do, they may
nd it hard to tell the dierence between oerings from dierent suppliers.
Companies may use concrete clues to communicate service performance.
Examples include the quality of equipment and facilities, or employee
qualications and professionalism. Some performance attributes are easier
or more appropriate to communicate than others. Airlines do not advertise
safety because even the suggestion that things might go wrong makes many
passengers nervous. Instead, they approach this ongoing customer concern
indirectly by advertising the expertise of their pilots, the newness of their
aircraft, and the skills and training of their mechanics.
Figure 7.4 A sales agent for an insurance
company explains the available offerings to
a prospective client.
Figure 7.5 eBay brightly promotes the
sheer value and range of their services.
Discuss the role of marketing
communications in services.
LO 1
P
A
R
T

I
I
Promote the Contribution of Service Personnel
and Backstage Operations
High quality front line sta and backstage operations can be important dierentiators
for services. In high-contact services, front line personnel are the main source of
service delivery. Tey often help to make the service more concrete and personal.
Advertising, brochures, and websites can show customers the work that goes on
backstage to ensure good service delivery. For example, Starbucks has publicity
materials and web pages showing customers what service personnel are doing
behind the scenes. Starbucks shows how coee beans are cultivated, harvested, and
produced, highlighting its use of the nest and freshest. Emphasizing the expertise
and commitment of employees whom customers normally never meet may increase
trust in the organizations competence and commitment to service quality.
Advertising messages set customer expectations, so advertisers must show service
personnel in realistic ways. Tey should also inform employees about the content of
new advertising campaigns or brochures that promise specic attitudes and behavior.
If a rms communications show friendly, smiling workers but most of them turn out
to be glum or rude in practice, customers will be disappointed.
Add Value through Communication Content
Information and consultation are important ways to add value to a product. Potential
customers may need information and advice about the kind of services available to
them, the place and time of availability and the cost of these services, and the specic
features, functions and service benets that come with these services.
Facilitate Customer Involvement in Production
When customers are actively involved in service production, they need training
to help them perform well. Tis benets the company because it helps to improve
productivity. One approach to training customers, recommended by advertising
experts, is to show service delivery in action. Video is a good medium where viewers
can see the sequence of events. Some dentists show their patients videos of surgical
procedures before the surgery takes place so that customers know what to expect.
Marketers often use sales promotions as incentives to encourage customers to make
the necessary changes in their behavior. For example, giving price discounts is one
way to encourage self-service. Other incentives to change customer behavior include
promotions that oer a chance to win a reward.
Stimulate or Dampen Demand to Match Capacity
Many live service performances, like a seat at the theater for a performance, or a
haircut at Jean-Louis David, Europes largest hairdresser chain, are time-specic and
cannot be stored for resale at a later date. Advertising and sales promotions can help
to change the timing of customer use. Low demand outside peak periods is a serious
problem for service industries with high xed costs, like hotels. One strategy is to
run promotions that oer extra value, such as a room upgrade and a free breakfast,
to stimulate demand without decreasing price. When demand increases and during
peak periods, the number of promotions can be reduced or even eliminated.

CHALLENGES OF SERVICE COMMUNICATIONS
A
fter having discussed the role of market communications, let us explore some
of the challenges service rms face. Since services are performances rather
than objects, it can be dicult to communicate their benets to customers. Tis is
especially true when the service does not involve any tangible actions to customers,
or their possessions.
2

Problems of Intangibility
Intangibility creates four problems for marketers: generality, non-searchability,
abstractness, and mental impalpability. Table 7.1 presents the implications of each
problem and proposes specic communications strategies for dealing with them.
Generality refers to items that make up a class of objects, persons, or events. For
the airline industry, we would refer to airline seats, ight attendants, and cabin
service. Most consumers of the service know what they are. However, a key
task for marketers is to communicate what makes a specic oering distinctly
dierent from (and better than) competing oerings.
u
Table 7.1 Advertising strategies for
overcoming intangibility.
Intangibility Problem
Incorporeal Existence
Advertising Strategy
Physical Representation
Description
Show Physical Components of Service
Generality:
For objective claims System documentation
Performance documentation
Objectively document physical system capacity
Document and cite past performance statistics
For subjective claims Service performance episode Present an actual service delivery incident
Non-searchability Consumption documentation
Reputation documentation
Obtain and present customer testimonials
Cite independently audited performance
Abstractness Service consumption episode Capture and display typical customers benefiting from the service
Impalpability Service process episode
Case history episode
Service consumption episode
Present a vivid documentary on the step-by-step service process
Present an actual case history of what the firm did for a specific
client
An articulate narration or depiction of a customers subjective
experience
Banwari Mittal and Julie Baker, Advertising strategies for hospitality services. Cornell Hotel and Restaurant
Administration Quarterly, 43 (April 2002): 53. Copyright Cornell University. All rights reserved. Used by permission.
Source
Understand the challenges of
service communications.
LO 2
P
A
R
T

I
I
Non-searchability refers to the fact that intangibles cannot be searched for
or inspected before they are purchased. Physical service attributes, such as the
appearance of a health club and the type of equipment installed, can be
checked in advance. However, the experience of working with the trainers
can only be known through experience. And as noted in Chapter 2,
credence attributes are those that one must trust, such as a surgeons skill.
Abstractness refers to the lack of one-to-one connection with physical
objects. Financial security or investment related matters (Figure 7.6),
expert advice such as legal or medical advice are examples of such abstract
concepts.
Mental impalpability. Many services are su ciently complex, multi-
dimensional, or new such that it is di cult for consumers to understand
what the experience of using them will be like and what benets will
result. An example of such a service would be plastic surgery.
Overcoming the Problems of Intangibility
Tangible cues and metaphors can be eective in overcoming the challenge of
intangibility.
Tangible Cues
Using tangible cues is one strategy commonly used in advertising. It is helpful to
include information that catches the audiences attention and will produce a strong,
clear impression on the senses, especially for services that are complex and highly
intangible.
3
For example, many business schools feature successful alumni to make
the benets of its education tangible and communicate what its education could do
for prospective students.
Use Metaphors
A metaphor is a symbol representing something else. Some
companies have created metaphors to help communicate the
benets of their service oerings. Insurance companies often use
this approach to market their highly intangible products. Tus,
Allstate advertises that Youre in Good Hands and Prudential uses
the Rock of Gibraltar as a symbol of corporate strength. Professional
service rms sometimes use metaphors to communicate their
value propositions more dramatically. To bring to life the abstract
idea of helping clients achieve high performance, Accenture, an
international consulting rm, features the champion golfer, Tiger
Woods, in eye-catching situations (Figure 7.7).
u
u
u
Figure 7.6 Julius Br, a Swiss private
bank shows how the intangibility of
providing excellent private banking
services can be communicated.
Figure 7.7 Tiger Woods spearheads Accentures
image of high-performance businesses.
Te Merrill Lynch bull has been a steadfast
symbol for the investment banks business
philosophy, which suggests both the
market bull run and a strong commitment
towards investment (Figure 7.8).
Reaching the top is the metaphor employed
by MasterCard to appeal to the hearts and
minds of customers. Te indication is that
with MasterCard on your side the skys
the limit (Figure 7.9).

MARKETING COMMUNICATIONS PLANNING
A
fter having discussed the role of market communications and how to overcome
the challenge of intangibility of service oerings, we now turn our discussion to
how to plan and design an eective communications strategy. Planning a marketing
communications campaign requires a good understanding of the service product.
It is also necessary to understand target market segments and to research such
factors as:
the dierent media through which they can be reached
their awareness of the product
their attitudes toward it.
Decisions include deciding on 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, time
frames for the campaign, and methods of measuring and evaluating performance.
u
u
u
Figure 7.8
imposing gure on the Brooklyn-
Battery Tunnel toll road.
LO 3
Know the 5 Ws of marketing
communications planning.
Figure7.9 MasterCard puts no
price on scaling the heights.
The Merrill Lynch bull is a
P
A
R
T

I
I
Te 5Ws model provides useful checklist for marketing communications planning:
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 the communications need to take place?
We will rst consider the issues of dening the target audience and specifying
communication objectives. Ten we will review the wide variety of communication
tools available to service marketers. Issues relating to the location and scheduling
of communication activities tend to be situation-specic, so we will not address
them here.
Target Audience
Prospects, users, and employees represent three broad target audiences for any services
communications strategy.
ProspectsMarketers do not know them. Hence, they need to use traditional
communications mix, like media advertising, public relations, and use of
purchased address lists.
UsersTey can be reached by cost eective channels, including selling
eorts by customer contact personnel, point-of-sale promotions, and other
information distributed during service encounters. If the rm has a membership
relationship with its customers and a database containing contact information,
it can distribute highly targeted information through e-mail, direct mail, or
telephone.
EmployeesEmployees serve as a secondary audience for communication
campaigns through public media. Advertising can help to shape employees
behavior, as employee behavior shown in the ads can serve as a role model and
benchmark. Communications can also be directed specically at sta. Tese
are part of an internal marketing campaign, using company-specic channels,
and so are not accessible to customers. We will discuss internal marketing in
Chapter 11.
Communication Objectives
After we are clear about our target audience, we need to now specify what exactly
we want to achieve with this target audience. Marketers need to be clear about their
goals, otherwise it will be di cult to formulate specic communications objectives
and select the most appropriate messages and communication tools to achieve them.
Communication objectives answer the question of what we need to communicate and
achieve. Common educational and promotional objectives for service organizations
include:
Create memorable images of companies and their brands.
Build awareness of and interest in an unfamiliar service or brand.
Compare a service favorably with competitors oerings.
u
u
u
u
u
u
Build preference by communicating the strengths and benets of a specic
brand.
Reposition a service relative to competing oerings (see Service Insights 7.1).
Reduce uncertainty and perceived risk by providing useful information and
advice.
Provide reassurance, such as by promoting service guarantees.
Encourage trial by oering promotional incentives.
Familiarize customers with service processes in advance of use.
u
u
u
u
u
u
SERVICE INSIGHTS 7.1
UPS Repositions itself To Deliver
Founded as a messenger company in the United
States in 1907, UPS has become one of the worlds
top service brands developing new services and
expanding into new markets around the globe.
In recent years, the company has had to develop
communication strategies to change the perceptions
of both current and potential customers. Although
recognized as a leader in the ground shipping
business, the company wanted wider awareness of
its other services like supply chain management,
multi-modal transportation, and nancial services.
So it started a rebranding and repositioning exercise
to make sure that all UPS services were closely
identied with the UPS name.
Research showed that UPS was strongly associated
with the color brown, used for the paintwork on
its trucks and the design of its employee uniforms.
Tis color also gave UPS an image of being
trustworthy and reliable. Seeking to clarify that
UPS could do more for customers than just deliver
packages, UPS adopted the tag line What Can
Brown Do For You? and combined it with a new
slogan, Synchronizing the world of commerce.
Te company understood that changing the
perception of a brand had to start with the
employees rst. Although it can be di cult to
change peoples mindsets about a companys vision,
UPS succeeded. Employees accepted the new
brand positioning strategy and learned to work
with each other across business units. Working
together, they were able to serve customers better.
Today, the company operates in more than 200
countries and territories worldwide. In 2007,
it served 7.9 million customers daily and had
operating revenues of close to $50 billion. UPS has
a very strong retail presence, with over 4,500 retail
stores, 1,300 mail boxes, 1,000 customer centers,
17,000 authorized outlets and 40,000 drop boxes.
Teir website has an average of 15 million tracking
requests daily. Te UPS jet aircraft eet is the
eighth largest in the world.
Vivian Manning-Schaffel. UPS Competes to Deliver, http://www.brandchannel.com/features_effect.asp?pf_id=210, 17 May
2004, accessed on 18 May 2007; http://www.ups.com/content/sg/en/about/facts/worldwide.html, accessed February 2008.
Source for picture: http://www.ups.com/content/us/en/about/history/2007.html, accessed February 2008.
Source
P
A
R
T

I
I
Figure 7.10a The marketing
communications mix for services.
Web sites
Manuals
Brochures
Video-
audiocassettes
Software
CD-ROM
Voice mail
Signage
Interior Decor
Vehicles
Equipment
Stationery
Uniforms
Personal
Communications
Selling
Key: * Denotes communications originating from outside the organization
Advertising
Sales
Promotion
Publicity &
Public Relations
Instructional
Materials
Corporate Design
Customer
Service
Training
Telemarketing
Word of mouth
Broadcast
Print
Internet
Outdoor
Direct Mail
Sampling
Coupon
Sign-up
rebates
Gifts
Prize
promotions
Press
releases/kits
Press
conferences
Special events
Sponsorship
Trade shows,
Exhibitions
Media-initiated
coverage
*
LO 4
Describe the variety of
marketing communications
tools that can be used.
Teach customers how to use a service to their own best advantage.
Stimulate demand in low-demand periods and shift demand during peak
periods to low-demand periods.
Recognize and reward valued customers and employees.
THE MARKETING COMMUNICATIONS MIX
A
fter understanding our target audience and our specic communications
objectives, we now need to select a mix of cost eective communications
channels. Tere are a number of forms of communication referred to collectively as the
marketing communications mix. Tese show us the various ways we can communicate.
As shown in Figure 7.10a, the mix includes personal contact, advertising, publicity
and public relations, sales promotion, instructional materials, and corporate design.
Communications Sources
As shown in Figure 7.10b, the traditional communications mix shown in Figure 7.10a
can also be categorized into two main channelsthose that are controlled by the
organization, and those that are not. Not all communications messages originate from
the service provider. Rather, some messages originate from outside the organization.
Furthermore, Figure 7.10b shows that messages from an internal source can be
further divided into those transmitted through marketing channels (traditional
media and the Internet), and those transmitted through the service rms own
service delivery channels. Let us look at the communications mix within each of
these originating sources.
u
u
u
*
Figure 7.10b Sources of messages received by a target audience.
Front line staff
Service outlets
Self-Service delivering points
Advertising
Public relations
Direct marketing
Sales promotions
Personal selling
Trade shows
Internet
Word of mouth
Blogs
Media coverage
Messages originating
within the organization
Messages originating
outside the organization
A
U
D
I
E
N
C
E
P
ro
d
u
c
tio
n

C
h
a
n
n
e
ls
M
a
rk
e
tin
g

C
h
a
n
n
e
ls
Messages Transmitted through Traditional
Marketing Channels
As shown in Figure 7.10b, service marketers have a wide variety of communication
tools that they can use. We briey review the principal elements.
Advertising
As the most dominant form of communication in consumer marketing, advertising
is often the rst point of contact between service marketers and their customers.
Advertising serves to build awareness, inform, persuade, and remind. It plays a vital
role in providing factual information about services and educating customers about
product features and capabilities.
One of the challenges facing advertisers is how to get their messages noticed. In
general, people are tired of ads in all forms. A recent study by Yankelovich Partners,
an American marketing-services consultancy rm, found that 65 percent of people
feel constantly bombarded by ad messages and that 59 percent feel that ads have
very little relevance to them.
4
Robert Shaw of Craneld School of Management runs
a forum in which large companies try to monitor the marketing payback from
advertising. According to Shaw, the results were never terribly good, with less than
half of the ads generating a positive return on their investment.
5
Adapted from a diagram by Adrian Palmer, Principles of Services Marketing, London: McGraw-Hill,
4th ed., 2005, p. 397.
Source
LO 5
Identify the different sources
of communications messages
received by the target audience
and the different communication
tools related to the source of
communications.
P
A
R
T

I
I
Marketers are trying to be more creative with their advertising to allow
their messages to be more eective. Tey are now putting advertisements
in the video games. Tese can even be dynamic advertisements if the
games consoles are connected to the Internet.
6
(Figure 7.11)
Public Relations
PR involves eorts to generate positive interest in an organization and its
products. A basic element in public relations strategy is the preparation
and distribution of press releases (including photos and/or videos) that
feature stories about the company, its products, and its employees.
Corporate PR specialists at many service organizations also teach senior
managers how to present themselves well at news conferences, or in radio
and television interviews. Other widely used PR techniques include recognition and
reward programs, getting testimonials from public gures, community involvement
and support, fundraising, and obtaining favorable publicity for the organization
through special events. Firms can also win wide exposure through sponsorship of
sporting events and other high-prole activities, like the World Cup for soccer.
Unusual activities can present an opportunity to
promote a company. FedEx gained a lot of positive
publicity when it safely transported two giant
pandas from Chengdu, China, to the National Zoo
in Washington, DC. Te pandas ew in specially
designed containers aboard a FedEx aircraft
renamed FedEx PandaOne. In addition to press
releases, the company also featured information
about the unusual shipment on a special page in
its web site (Figure 7.12).
Direct Marketing
Tis category includes tools like e-mails, direct
mailers, and telemarketing. Tese channels allow
personalized messages to be sent to highly targeted micro-segments. Tesco is an
example of a company that has used direct marketing to great success (see Service
Insights 7.2).
Advances in on-demand technologies like e-mail spam lters, TiVo, and podcasting
allow consumers to decide how and when they prefer to be reached and by whom.
Tis led permission marketing to become more widely used. In the permission
marketing model, the goal is to persuade consumers to volunteer their attention.
By reaching out only to individuals who have previously expressed interest in
receiving a certain type of message, permission marketing enables service rms to
build stronger relationships with their customers. E-mail, in combination with
websites, can be integrated into a one-to-one permission-based medium.
7
Sales Promotion
A useful way of looking at sales promotions is as a communication that comes
with an incentive. Sales promotions are usually specic to a time period, price, or
customer groupsometimes all three. Typically, the objective is to get customers
Figure 7.12 FedEx donated the use of
its extensive global network, granting
the logistical resources to move
the animals, which were previously
housed at the Beijing Zoo and the
Figure 7.11 Avatars crowd in
front of Sony BMGs media island.
Virtual video game worlds like
Second Life lead the new wave of
dynamic in-game advertising.
P
A
R
T

I
I
Zoo Shanghai .
to make a purchase decision faster or encourage customers to use a specic service
sooner, in greater volume with each purchase, or more frequently. Sales promotions
for service rms may take such forms as samples, coupons and other discounts, gifts,
and competitions with prizes. Sales promotions need to be used with care because
research shows that customers acquired through sales promotions may have
lower repurchase rates and lower life time values.
8
Some years ago, SAS International Hotels devised an interesting sales
promotion targeted at older customers. If a hotel had vacant rooms, guests
over 65 years of age could get a discount equivalent to their age (e.g. a
75-year old could save 75 percent of the normal room price). All went well
until a Swedish guest checked into one of the SAS chains hotels in Vienna,
announced his age as 102, and asked to be paid 2 percent of the room rate
in return for staying the night. Tis request was granted, and the energetic
centenarian challenged the general manager to a game of tennisand got
that, too. (Te results of the game, however, were not disclosed!) In this
case, a clever promotion led to a humorous, widely reported story that
placed the hotel chain in a positive light.
Personal Selling
Personal selling is the interpersonal encounter where eorts are made to educate
customers and promote preference for a particular brand or product (Figure 7.13).
Many rms, especially those marketing business-to-business services, have dedicated
sales forces, or use agents and distributors to do the personal selling eorts on their
Tescos Success With Direct Marketing
Tesco is a UK-based food retailer and the worlds
largest online grocery store. Tesco has built on
the complex analysis of existing customer data to
launch successful products that are unrelated to its
core products. For example, before the company
launched a credit card, it used detailed analysis
of data from its loyalty card. Tis allowed the
company to construct proles of target customers
for the service. Within months of the launch, Tesco
became one of the UKs leading credit card issuers by
volume. Taking advantage of customer intelligence
technology, Tesco could build on the strength of
direct marketing by focusing on customers and
giving them discounts on things that they buy
routinely. Each cardholder gets a letter at the
end of each quarter containing vouchers worth
1 percent of what they have spent. At the same
time, cardholders also get coupons that allow them
to have discounts on products in Tescos database.
In the last quarter of 2006, the store sent out
six million versions of this letter, each oering
slightly dierent discounts, customizing to
cardholders purchase patterns and buying
preference.
Cover Story: Customer-driven Innovation: The Next Frontier, AT&T : Enterprise Business: Issue 3, 2006. Downloaded
from http://www.business.att.com/newsletter.jsp?slotnum=1&rtype=Article&rvalue=nv_customer_driven_innovation,
in August 2007
Source
Figure 7.13 To persuade customers
of the superiority of ones brand,
body language is also important.
P
A
R
T

I
I
behalf. For services that are bought less often like property,
insurance and funeral services, the rms representative may act as
a consultant to help buyers make their selections. For industrial
and professional rms that sell relatively complex services,
customers may have an account manager they can turn to for
advice, education and consultation.
However, face-to-face selling to new prospects is expensive. A
lower-cost alternative is telemarketing. Telemarketing involves
the use of the telephone to reach prospective customers. At the
consumer level, there is growing frustration with telemarketing
because it is often timed to reach people when they are home in the
evening or at weekends (Figure 7.14).
Trade Shows
Trade shows are a popular form of publicity, especially for business-to-
business services and include important personal selling opportunities
(Figure 7.15). In many industries, shows receive extensive media
coverage. Tey oer business customers an opportunity to learn
about the latest oerings from a wide variety of suppliers and are
one of the few occasions when large numbers of potential buyers
come to the marketer rather than the other way around. A sales
representative who usually reaches four to ve potential customers
per day may be able to get ve qualied leads per hour at a show.
Messages transmitted through
the Internet
Messages transmitted through the Internet can come from the
companys own web site, or from advertisements it places on a variety of other
sites. Internet advertising has become an important part of the communications
mix for most service rms but should be part of an integrated, well-designed
communications strategy.
9
Companys Web Site
Marketers use the Internet for a variety of communications tasks:
Creating consumer awareness and interest
Providing information and consultation
Allowing two-way communications with customers through e-mail and chat
rooms
Encouraging product trial
Allowing customers to place orders
Measuring the eectiveness of specic advertising or promotional campaigns.
Innovative companies are continually looking for ways to improve the appeal and
usefulness of their sites. Te appropriate communication content varies widely
from one type of service to another. A B2B site may oer visitors access to a
u
u
u
u
u
u
Figure 7.14 Telemarketers
call in the evenings.
Figure 7.15 Trade shows are a good way
to showcase a companys offerings.
P
A
R
T

I
I
library of technical information (e.g. Siebel or SAP both provide quite a lot of
information on their customer relationship management solutions at their respective
websites at www.siebel.com and www.sap.com.) By contrast, the website for a
universitys executive MBA program may include attractive photographs featuring
the location, the facilities and past students, and short videos showing the university,
its professors and facilities, student testimonials and even the graduation ceremony.
(See, for example, the dual degree Executive MBA program oered by UCLA and
the National University of Singapore at www.ucla.nus.edu.)
Online Advertising
Tere are two main types of online advertising, namely banner advertising and search
engine advertising. In each instance, advertisers can include moving images and create
links to more extended video presentations. Te use of online advertising as part of
an integrated communications strategy can bring success to a rm.
Banner Advertising
Many rms pay to place advertising banners and buttons on portals like Google,
Yahoo or Netscape, as well as on other rms web sites (Figure 7.16). Te usual
goal is to draw online trac to the advertisers own site. Advertisements are often
placed from other websites that oer services that are related but do not compete
directly with the rms own services. For example, Yahoos stock quotes page features
a sequence of advertisements for various nancial service providers.
Simply obtaining a large number of exposures (eyeballs) to a banner (a thin
horizontal ad running across all or part of a web page), a skyscraper (a long skinny ad
running vertically down one side of a website), or a button does not necessarily lead to
increases in awareness, preference, or sales for the advertiser. As a result, there is now
more emphasis on advertising contracts that tie fees to marketing-relevant behavior
by these visitors. Tese include providing the advertiser with some information about
themselves or making a purchase. Internet advertisers increasingly pay only if a visitor
to the host site clicks through on the link to the advertisers site. Tis is similar to
paying for the delivery of junk mail only to households that read it.
Search Engine Advertising
Search engines are a form of a reverse broadcast network. Instead of advertisers
broadcasting their messages to consumers, search engines let advertisers know exactly
what consumers want through their key word search. Advertisers can then target
relevant marketing communications directly at these consumers. Advertisers have
several options. Tey can:
pay for the placement of ads to keyword searches that are related to their rm
sponsor a short text message with a click-through link, located parallel to the
search results
buy top rankings in the display of search results through a pay-for-placement
option. Pricing for these ads and placements can be based on either number
of impressions (i.e., eyeballs) or click-throughs, both of which are achieved by
placing sponsored links at the top of search results. One company that built
a successful business model around highly targeted Internet advertising is
Pinstorm (see Service Insights 7.3).
u
u
u
Figure 7.16 Web banners function
similarly to traditional banners:
Turning consumers attention to
the product or service and selling
a pitch, though service-provider
and consumer interaction is more
realized with the click through of
online advertisement.
P
A
R
T

I
I
Moving from Impersonal to Personal Communications
Communication experts divide personal communications, like personal selling,
telemarketing, and word of mouth, and impersonal communications, where messages
move in only one direction and are generally targeted at a large group of customers
and prospects rather than at a single individual. However, technology has created a
gray area between personal and impersonal communications. Tink about the direct
mail and e-mail messages that you have received, containing perhaps some reference
to your specic situation or past use of a particular product.
PinstormThe Company that Takes the Advertising World by Storm
In 2005, when it was only 15 months old,
Pinstorm was picked as among Asias 100 hottest
companies, by Red Herring, a weekly magazine
that covers high-tech businesses. Pinstorm is a
search engine marketing company based in India.
How does a company like Pinstorm allow you to
set up a marketing campaign in Google or Yahoo
and achieve better results for the same amount of
dollars spent?
Te main income for search engines like Google
or Yahoo is through the Sponsored Links. In
order for companies to appear on the rst page of
a Google search, they have to pay for the keywords
that they think their potential customers will search
for. However, the price for these keywords is not
xed. A company has to outbid other advertisers
on phrases that they want to be on. As a result,
common search terms are typically expensive.
Pinstorm applies the Long Tail phenomenon to
keyword searches. Tis phenomenon is one where
search terms that are low in demand or infrequently
used can together make up a signicant share
of search terms. Pinstorm has the technology
(BroadWords technology) to look for the long tail
of low-priced keywords that are relevant to their
clients oering.
Pinstorm has a business model that guarantees
results. Clients do not have to pay if there are
no results. Results by their denition could be
measured by visits, unique visitors, online actions,
leads or even sales. Hence, the company does
everything to make sure that it gets results. Apart
from picking eective words that are low-priced,
they also develop eective online ads for their
clients. Tese are tested again and again during
a campaign until they nd one that performs
best. Pinstorm tracks millions of searches and
understands demand for a particular product
category and even geographical region. As a result,
they are able to micro-target and micro-market.
Te leads they deliver to their clients are therefore
self-selected and of high quality. Clients will be
able to know where the leads came from, the time
they visited, and the search terms used. All these
kinds of information provide the clients with a lot
more understanding about their customers.
Among Pinstorms clients are famous companies
like eBay, HP, National Geographic, Dell, Qantas,
and Swissotel Hotels and Resorts. Tey also have
many clients who are not as well known yet, but
Pinstorm hopes that with their help, their clients
will become famous.
http://www.pinstorm.com, accessed June 2008; The Long Tail. Wikipedia, http://en.wikipedia.org/wiki/The_Long_Tail,
accessed 13 August 2007.
Source
Another way of personalized communications are electronic recommendation agents
that are increasingly used by online retailers. Interactive software, voice recognition
technology, and computer-generated voice prompts and responses can be like a
two-way conversation. Recommendation agents are virtual salespeople who help
customers make their selections from among a large number of oerings. Tis can
be done by generating alternative lists ranked based on customers preferences.
10

As customers become more technology savvy, more companies are beginning to
experiment with web-based agents that move, speak, and even change expression.
With the advances of on-demand technologies, consumers are increasingly
empowered to decide how and when they like to be reached. Tis development is
transforming marketing communications on radio, television, the Internet and even
mobile phones (see Service Insights 7.4).
New Media and Its Implications for Marketing Communications
Technology has created some exciting new
communication channels oering important
opportunities for targeting. Among the key
developments are TiVo, podcasting and YouTube.
TiVo (also known as Digital Video Recorder
(DVR) or Personal Video) TiVo can record
programs digitally on its hard disk, very much like
a VCR. However, unlike a VCR, TiVo is always
on and continuously stores up to some 30 minutes
of TV programming. Tis means that TiVo users
can pause or rewind live TV. In fact, many users
begin watching a TV program after the broadcast
has started so that they can fast-forward and skip
the commercials. Tis is worrying for advertisers.
Interestingly, while customers liked TiVo because it
can be commercial free, TiVo is attracting marketers
and advertisers as well.
Charles Schwab & Co. became the rst nancial-
services company in June 2004 to use TiVos new
interactive technology, employing a 30-second spot
featuring golfer Phil Mickelson. Te spot allowed
viewers to move from the commercial into a four-
minute video to watch three segments hosted by
the golf pro. Viewers could also order information
on Schwabs golf-rewards program at the same
time. Te eectiveness of ads can be immediately
measured based on viewer responses. Schwab began
testing large billboards and small logos that pop
up as an alternative way to generate revenue.
When users fast-forward, they will also see a static
image ad, which is more suitable than a broken
video stream.
Podcasting. Tis term comes from the words
iPod and broadcasting. It refers to a group
of technologies for distributing audio or video
programs over the Internet using a publisher/
subscriber model. Podcasting gives broadcast
radio or television programs a new method of
distribution. Once someone has subscribed to a
certain feed, they will automatically receive new
episodes that become available. Podcasting
is so popular that it has several variations now,
including video podcasting for delivery of video
clips, mobilecast for downloads onto a cell phone,
and blogcast for attachment of an audio or video
le to a blog. It is benecial to include podcasting
as part of a rms marketing communications
program because once a listener has subscribed to
a specic show, this means the listener is interested
in the topic. Hence, podcasts can reach a wide
audience of listeners that have a narrow focus,
more like narrowcasting than broadcasting.
When the advertising message is more targeted,
this leads to a higher return on investment for the
advertising dollars spent.
P
A
R
T

I
I
YouTube. YouTube was founded in mid February
2005, and the company was bought over by Google
in late 2006. YouTube is a trendy video sharing
website where registered users can upload videos,
and unregistered users can watch most videos
and also post responses to those videos. Already
in 2006, some 100 million YouTube video clips
were viewed daily, and 65,000 new videos were
uploaded every 24 hours. Advertisers were quick to
see the advantages of using YouTube as a marketing
communications channel.
Te CEO of Red Hat, Matthew Szulik, used a
video called Truth Happens to open a keynote
address four years ago. Tat video has been viewed
more than 50,000 times on YouTube. Today, the
company uses YouTube, blogs and its own magazine
as marketing communications tools.
Mobile advertising. Mobile advertising is a form
of advertising through cell phones and other mobile
wireless devices, but currently mainly targeted at cell
phones. Mobile advertising is quite complex as it
can involve the Internet, video, text, gaming music
and much more. For example, advertisements can
come in the form of an SMS, MMS, advertisements
in mobile games, or videos or even some music
before a voicemail recording. Trough mobile
advertising and the use of a global positioning
system, customers can walk into shopping malls
and receive advertisements from those malls where
they can activate coupons, or get discounts if they
visited a particular store within the mall. What will
this mean for the consumer? It might be greater
convenience, more targeted advertising, or does it
mean the invasion of privacy?
Web 2.0. Web 2.0 technology facilities the rise of
user-generated content. Tis uses the power of peer
to peer communication. Wikipedia and Flickr are
examples of web sites that ride on the technologies
oered by Web 2.0, where content is generated
by multiple users and shared. Marketers cannot
control what is being said. Terefore, they need to
understand Web 2.0, carefully integrate it into its
marketing mix, and sometimes even participate in
conversations.
Social networks and communities. Internet-
based virtual worlds like Second Life and social
networks like Facebook oer communication
and learning opportunities for marketers. In
Second Life are virtual advertising rms and
virtual advertising campaigns in the dierent
communities, with business functions just like in
the real world. As social networks gain popularity,
marketers have begun to use applications to
analyze the networks within the communities to
enable them to identify those people who may
be more inuential in spreading the word about
specic services for example. Marketers who want
to take advantage of these rich networks need to
remember though, that they are in a community
where people would not welcome the intrusion
of marketers. Hence, marketers have to come up
with creative ways to engage the participants in
these networks.
Silverthorne, S.(2004) .TiVo ready to fast forward? HBS Working Knowledge, (November)15; TiVo. http://www.en.wikipedia.
org/wiki/TiVo, accessed June 2008; Podcast http://en.wikipedia.org/wiki/Podcast, accessed June 2008; Rumford, R.. (2005) What
you dont know about podcasting could hurt your business: How to leverage & benet from this New Media technology. Podcasting
White Paper, The Info Guru LLC, (June); YouTube serves up 1000 million videos a day online. USA Today, Gannett Co. Inc, 16 July
2006; Daniels, C. (2007). Animated Conversation. PRweek, New Your: 25 June, 10 (25): 15; Fichter, D. (2007). Seven strategies for
marketing in a Web 2.0 World. Marketing Library Services, 21 no. 2, (Mar/Apr) in http://www.infotoday.com/mls/mar07/Fichter.
shtml, accessed June 2008; Jesdanun, A. (2007). Mobile advertising still at tryout stage. USA Today, 29 December, http://new.
yahoo.com/s/ap/20071229/ap_on_hi_te/advertising_on_the_go, accessed December 2007; Smith, B. (2008). Mobile advertising
reaches for the sky. Wireless Week, 15 August, http://www.wirelessweek.com/Mobile-Advertising.aspx, accessed June 2008;
Mobile Advertising http://en.wikipedia.org/wiki/Mobile_advertising, accessed June 2008.
Source
Messages Transmitted through Service
Delivery Channels
Tis category comprises communications developed within the organization and
transmitted through the channels that deliver the service itself, mainly front line
sta, service outlets, and self-service delivery points.
Customer Service Employees
Employees in front line positions may serve customers face-
to-face or by telephone. Communication from front line sta
takes the form of the core service and a variety of supplementary
services, including providing information, taking reservations,
receiving payments, and solving problems. New customers, in
particular, often rely on customer service personnel for help
in learning to use a service eectively and to solve problems.
When several dierent products are available from the same
supplier, rms encourage their customer service sta to cross-
sell additional services, or to upsell to higher value services.
Service Outlets
Messages can be communicated in the form of banners,
posters, signage, brochures, video screens, and audio. We
will discuss in Chapter 10 the physical design of the service
outletwhat we call the servicescape
11
(Figure 7.17).
Self-service Delivery Points
ATMs, vending machines and web sites are all examples of self-service delivery
points. Promoting self-service delivery requires clear signage, step-by-step
instructions (perhaps through diagrams) on how to operate the equipment, and
user-friendly design.
Messages Originating from Outside
the Organization
Some of the most powerful messages about a company and its products come from
outside the organization and are not controlled by the marketer. Tey include word
of mouth, blogs and media coverage.
Word of Mouth (WOM)
Word of mouth has a powerful inuence on peoples decisions to use (or avoid using)
a service. Tis is because it is viewed as more believable than promotional activities
of rms. In fact, the greater the risk that customers perceive in purchasing a service,
the more actively they will seek and rely on WOM to guide their decision making.
12

In addition, whether or not customers are willing to give positive WOM for a rm is
the single most important predictor of top-line growth.
13
Since WOM is so powerful, some marketers use a variety of strategies to encourage
existing customer to provide positive and persuasive comments.
14
Tese include:
Figure 7.17 The Salentein Winery
in Argentina exudes a distinctive
servicescape.
P
A
R
T

I
I
Having satised customers providing comments that will
encourage WOM.
Using other purchasers and knowledgeable individuals as a
reference. For instance: We have done a great job for ABC Corp.,
and if you wish, feel free to talk to Mr. Cabral, their MIS manager,
who oversaw the implementation of our project.).
Creating exciting promotions that get people talking about the
great service that the rm provides.
Oering promotions that encourage customers to persuade others
to join them in using the service, such as bring two friends, and
the third eats for free or subscribe to two mobile service plans,
and well waive the monthly subscription fee for all subsequent
family members.
Developing referral incentive schemes, such as oering an existing
customer some units of free or discounted service in return for
introducing new customers to the rm (Figure 7.18).
In addition to WOM, we also have word of mouse. Viral marketing
has spread so fast, that rms cannot ignore it.
15
One of the early success
stories of viral marketing was the Hotmail free e-mail service. Te
service grew from zero to 12 million users in 18 months on a very small
advertising budget, thanks mostly to the inclusion of a promotional
message with Hotmails URL in every e-mail sent by its users. eBay and
other electronic auction rms rely on users to rate sellers and buyers in
order to build trust in the items oered on their websites.
BlogsA New Type of Online WOM
16
Web logs, commonly referred to a blogs, are becoming increasingly
popular. Tey can be best described as online journals, diaries or news listings, where
people can post anything, about whatever they like. Teir authors, known as bloggers,
usually focus on narrow topics. Blogs can be about anything, ranging from baseball
and sex, to karate and nancial engineering. Tere are a growing number of travel-
oriented sites, ranging from Hotel.chatter.com (focused on boutique hotels), to
CruiseDiva.com (reporting on the cruise industry), and pestiside.hu (the daily dish
of cosmopolitan Budapest). Some sites, such as the travel-focused Tripadvisor.com,
allow users to post their own reviews or ask questions that more experienced travelers
may be able to answer.
17
Marketers are interested in the way blogs have evolved into a new form of social
interaction on the web. Communications include consumers experiences with
service rms and their recommendations on avoiding or buying from certain rms.
In the exchange of dialog, owners of weblogs add hyperlinks into their weblogs,
which allow readers to click on these hyperlinks and access information that they
want to share. Te additional information also inuences opinions of a brand
or product. Some service rms have started to monitor blogs, viewing them as a
u
u
u
u
u
Figure 7.18 Word of
mouth can be an effective
promotional tool.
form of immediate market research and feedback.
Some service companies have even started their
own blogs, see for example Googles blog at
http://googleblog.blogspot.com (Figure 7.19).
Media Coverage
A signicant amount of media coverage of rms and
their services is done by rms public relations activities
which inform the media about the latest news services
and exciting company news. Media coverage can also take
several other forms. For example, journalists responsible
for consumer aairs often contrast and compare service
oerings from competing organizations, identifying their
strong and weak points, and oering advice on best
buys. In a more specialized context, Consumer Reports,
the monthly publication of US-based Consumers
Union, periodically evaluates services that are oered on
a national basis, including nancial services and telecommunications. Furthermore,
investigative reporters may conduct an in-depth study of a company, especially if they
believe it is putting customers at risk, cheating them, using deceptive advertising,
damaging the environment, or exploiting poor workers in developing countries.
Ethical and Consumer Privacy Issues
in Communications
We have been focusing on the various communications tools and channels of
communication where customers receive information about the rm. Firms, however,
also need to consider the ethical and privacy issues associated with communications.
It is very easy to misuse or even abuse advertising, selling, and sales promotion.
Since customers often nd it hard to evaluate services, they rely on marketing
communication for information and advice. Communication messages often include
promises about the benets that customers will receive and the quality of service
delivery. When promises are made and then broken, customers are disappointed
because their expectations have not been met. Teir disappointment and even anger
will be even greater if they have wasted money, time, and eort and have no benets
to show in return or have actually suered a negative impact.
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 overpromise in order to get sales. Finally, there are promotions that lead
people to think that they have a much higher chance of winning prizes or awards
than there really is. Fortunately, there are many consumer watchdogs on the lookout
for these unethical marketing practices.
Figure 7.19 Google has come on
board the social and marketing
phenomenon of blogging.
P
A
R
T

I
I
A dierent type of ethical issue concerns privacy. Te increase in telemarketing, direct
mail and e-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 violated (see
Service Insights 7.5). Trade associations like the Direct Marketing Association oer
ways for consumers to remove their names from telemarketing and direct mail lists to
try to decrease the growing anger towards these types of direct marketing techniques.
Governments are coming up anti-spam laws to stop this intrusion into consumers
private lives. In the US, Federal Communications Commission regulations do not
allow telemarketers to use equipment that automatically dials cell phone numbers to
make cold calls.
Consumer Concerns about Online Privacy
Technology advances have made the Internet a very
powerful threat to user privacy. Information is being
collected on not just people who register and shop,
or use e-mail, but also on those who are just surng
the Internet! Individuals are increasingly fearful of
databases and concerned about their online privacy.
Hence, they use several ways to protect themselves
including.
Providing false information about themselves.
Using technology like anti-spam lters, e-mail
shredders, and cookie-busters to hide the identity
of their computers from websites.
Refusing to provide information and avoid
websites that require personal information to be
disclosed.
Such consumer responses will make information
collected in CRM systems inaccurate and
incomplete, and even drive potential customers
away from a rms website. Te result will be reduced
eectiveness of a rms customer relationship
marketing and its eorts to provide customized
service. Tere are several steps that rms can take

to reduce privacy concerns.
Firms should have a good privacy policy in place.
Tis privacy policy should be easily noticed on
the websites. It should be in a language that is
easy to understand, and comprehensive enough
to be eective.
If the information being requested is highly
sensitive, the information asked for should
be perceived to be related to the transaction.
Terefore, rms should clearly communicate
why the information is needed, and how such
information will benet the consumer through
more convenience, more customization, and
improved oers.
Firms should have high ethical standards of
data protection. Tey can use third party
endorsements like TRUSTe or Better Business
Bureau, and have the recognizable privacy seals
displayed clearly on their website.
Lwin, M., Wirtz, J. & Williams, J.D. (2007). Consumer online privacy concerns and responses: A power-reponsibility
equilibrium perspective. Journal of the Academy of Marketing Science, 35.pp. 572-585; Wirtz, J., Lwin, M., & Williams,
J.D. (2007). Causes and consequences of consumer online privacy concern, International Journal of Service Industry
Management, 18(4), pp. 326-348.
Source
THE ROLE OF CORPORATE DESIGN
S
o far, we have focused on communications media and content, but not much
on design. Corporate design is key to ensure a consistent style and message is
communicated through all a rms communications mix channels. Have you noticed
how some rms stick in your mind because of the colors that they use, their logos,
the uniforms worn by their personnel, and the design of their physical facilities? If
you were to be asked, you would probably be able to identify the corporate colors of
DHL as red and yellow. Tese colors are on their packages, their uniforms, and their
vehicles. If you ask children worldwide to identify the McDonalds Golden Arches,
it is unlikely that any of them will get it wrong (Figure 7.20).
Many service rms use one distinctive visual appearance for all their tangible elements.
Te objective is to help recognition and strengthen a desired brand image. Corporate
design strategies are usually created by external consulting rms and cover stationery
and promotional literature, retail signage, uniforms, and color schemes for vehicles,
equipment, and building interiors. Corporate design is particularly important for
companies operating in competitive markets where it is necessary to stand out from
the crowd and to be instantly recognizable in dierent locations. Companies can do
that in several ways:
Use of colors in corporate designs. If we look at gasoline retailing, we see BPs
bright green and yellow service stations, Texacos red, black and white, and
Sunocos blue, maroon, and yellow.
Companies in the highly competitive express delivery industry tend to use their
names as a central element in their corporate designs. When Federal Express
changed its trading name to the more modern FedEx, it also changed its logo
to feature the new name in a distinctive logo.
Many companies use a trademarked symbol, rather than a name, as their
primary logo, Shell displays a yellow scallop shell on a red background. Tis has
the advantage of making its vehicles and service stations instantly recognizable
(Figure 7.21).
Some companies have succeeded in creating tangible, recognizable symbols
to connect with their corporate brand names. Animal motifs are common
physical symbols for services. Examples include the eagles of the US Postal
Service (AeroMexico and Eagle Star Insurance also feature an eagle), the lions
of ING Bank and the Royal Bank of Canada, the ram of the investment rm T.
Rowe Price, the Chinese dragon of Hong Kongs Dragonair and the kangaroo
on Qantas Airlines. Merrill Lynch, the global nancial services company, used
its famous slogan, Were Bullish on America as the basis for its corporate
symbola bull. Easily recognizable corporate symbols are especially important
when services are oered in markets where the local language is not
written in Roman script or where a signicant proportion of the
population is are unable to read (Figure 7.22).
u
u
u
u
Figure 7.21 The Shell brand is one
of the most instantly-recognizable
global commercial symbols.
Figure 7.22 Qantas Airlines is
living up to its ying kangaroo
billing.
Figure 7.20 The Golden Arches
prominently displayed on the
exterior of the Times Square
McDonalds restaurant.
LO 6
Understand the role of corporate
design in communications.
CHAPTER SUMMARY
The role of service marketing communication
is to position and differentiate the service, help
customers to evaluate service offerings, promote
the contribution of service personnel, add value
through communication content, facilitate
customer involvement in production, and stimulate
or dampen demand to match capacity.
The intangibility of services presents challenges
for communications. To overcome the problem
of intangibility, service marketers can emphasize
tangible clues like its facilities, certicates and
awards, or its customers. Another way of doing so
is through using metaphors to communicate the
value proposition, like Accenture and Julius Br.
After understanding the challenges of service
communications, service marketers need to plan
and design an effective communications strategy.
They can use the 5 Ws model to guide service
communications planning. The 5 Ws are:
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 the communications need to take
place?
After understanding the target audience and
knowing the communication objectives, we can
use a variety of communication tools and channels
for communication. Messages come from a variety
of sources and the services communications is
discussed within each of these originating sources:
u
u
u
u
o Messages from traditional marketing channels.
These are advertising, public relations, direct
marketing, sales promotions, personal selling
and tradeshows. There are also messages
transmitted through the Internet using company
websites, and online advertising like banner
advertising and search engine advertising.
o Messages can also come from within the
organization through its service delivery
channels like customer servivce employees,
service outlets, and self-service delivery
points.
o Communicating messages originating from
outside the organization include word of mouth,
blogs, and media coverage.
o When designing their communication strategy,
rms need to bear in mind the ethical and
privacy issues in communication.
Besides the communication tools, corporate design
can also help rms to achieve a unied image in
the minds of customers. Good corporate design
uses a unied and distinctive visual appearance
for all tangible elements, including stationery,
promotional literature, retail signage, uniforms,
vehicles, equipment, and building interiors.
u
LO 1
LO 2
LO 3
LO 4
LO 5
LO 6
UNLOCK YOUR LEARNING
1. Marketing communications
2. Promotion and education
3. Abstractness
4. Challenges of service
communications
5. Generality
6. Intangibility
7. Non-searchability
8. Mental impalpability
9. Metaphor
10. Symbol
11. Tangible cues
12. 5Ws model
13. Communication objectives
14. Employees
15. Marketing communications
planning
16. Prospects
17. Target audience
18. Users
19. Marketing communications mix
20. Advertising
21. Banner advertising
22. Blogs
23. Communication sources
24. Customer service employees
25. Direct marketing
26. Ethical issue
27. Eyeballs
28. Facebook
29. Google
30. Impersonal communications
31. Media coverage
32. Mobile advertising
33. Online advertising
34. Permission marketing
35. Personal communications
36. Personal selling
37. Podcasting
38. Privacy
39. Public relations
40. Sales promotion
41. Search engine advertising
42. Second Life
43. Employees
44. Service outlets
45. Servicescape
46. Self-service delivery points
These keywords are found within the sections of each Learning Objective (LO). They are integral in understanding
the services marketing concepts taught in each section. Having a rm grasp of these keywords and how they
are used is essential in helping you do well for your course, and in the real and very competitive marketing scene
out there.
LO 1
LO 3
LO 2
LO 4
LO 5
SCORE
0 9 Services Marketing is done a great disservice.
10 20 The midnight oil needs to be lit, pronto.
21 30 I know what you didnt do all semester.
31 41 A close shave with success.
42 51 Now, go forth and market.
52 59 There should be a marketing concept named after you.
47. Skyscraper
48. Social networks
49. Telemarketing
50. TiVo
51. Trade shows
52. Website
53. Yahoo
54. YouTube
55. Word of mouth
56. Word of mouse
57. Viral marketing
58. Corporate design
59. Logo
LO 6
194 Chapter 7 Promoting Services and Educating Customers 194 Chapter 7 Promoting Services and Educating Customers
1. What role does marketing communications
play in services?
2. What are some challenges in service
communications and how can they be
overcome?
3. Which elements of the marketing
communications mix would you use for each
of the following scenarios? Explain your
answers.
A newly established hair salon in a suburban
shopping center
An established restaurant facing declining
patronage because of new competitors
A large, single-ofce accounting rm in a major
city that serves primarily business clients.
1. What tangible cues could a scuba diving school
or a dentist ofce use to position itself as
something attractive to wealthy customers?
2. Describe and evaluate recent public relations
efforts made by service organizations in
connection with three or more of the following:
(a) launching a new offering; (b) opening a
new facility; (c) promoting an expansion of an
existing service; (d) announcing an upcoming
event; or (e) responding to a negative
situation that has happened. (Pick a different
organization for each category).
3. If you were exploring the institution that you
are now studying in, or research the program
Review Questions
Application Exercises
KNOW YOUR ESM
WORK YOUR ESM
4. What roles do personal selling, advertising,
and public relations play in (a) attracting new
customers to visit a service outlet, (b) retaining
existing customers?
5. Discuss the relative effectiveness of brochures
and web sites for promoting (a) a ski resort,
(b) a business school, (c) a tness centre, and
(d) an online broker.
6. Why is word of mouth considered so
important for the marketing of services? How
can a service rm that is the quality leader in
its industry encourage and manage word of
mouth?
7. How can companies use corporate design to
differentiate themselves?
you are now in, what could you learn from
blogs and any other online word of mouth?
How would that information inuence the
decision of a potential new applicant to your
institution? Since you are a student in the
institution, how accurate do you think is the
information that you found online?
4. Register at Amazon.com and Hallmark.
com, and analyze their permission-based
communications strategy. What are their
marketing objectives? Evaluate their
permission-based marketing for a specic
customer segment of your choicewhat is
excellent, what is good, and what could be
further improved?
ENDNOTES
1 Westin Turns Traditional Hotel Advertising on its
Head, http://www.hotelmarketing.com/index.php/
content/print/070802_westin_turns_traditional_
hotel_advertising_on_its_head, 6 August 2007
(article downloaded on 13 August 2007). Source
for photos: http://www.westinadvertising.com/,
accessed March 2008.
2. Devlin J.F., & Azhar, S. (2004). Life would be a lot
easier if we were a Kit Kat: Practitioners views
on the challenges of branding nancial services
successfully. Brand Management, 12(1), pp.
1230.
3. Hill, D.J., Blodgett, J., Baer, R. & Wakeeld,
K. (2004). An investigation of visualization and
documentation strategies in service advertising.
Journal of Service Research, 7 (November), pp.
155166; Grace, D. & OCass, A. (2005). Service
branding: Consumer verdicts on service brands.
Journal of Retailing and Consumer Services, 12,
pp. 125139.
4. The future of advertisingThe harder hard sell.
(2004, June 24). The Economist.
5. The Economist, op. cit.
6. Got game: Inserting advertisements into video
games holds much promise. (2007, June 9). The
Economist, p. 69.
7. Godin, S. & Peppers, D. (1999). Permission
marketing: Turning strangers into friends and
friends into customers. New York, Simon &
Schuster.
8. Lewis, M. (2006). Customer acquisition
promotions and customer asset value. Journal of
Marketing Research, XLIII (May), pp. 195203.
9. Lagrosen, S. (2005). Effects of the Internet
on the marketing communication of service
companies. Journal of Services Marketing, 19(2),
pp. 6369.
10. Aksoy, L., Bloom, P.N., Nicholas, H.L., & Cooil, B.
(2006). Should recommendation agents think like
people? Journal of Service Research, 8(May), pp.
297315.
11. Bitner, M.J. (1992). Servicescapes: The impact
of physical surroundings on customers and
employees. Journal of Marketing, 56(April), pp.
5771.
12. Bansal, H.S., & Voyer, P.A. (2000). Word-of-mouth
processes within a service purchase decision
context. Journal of Service Research, 3(2),
(November 2000), pp. 166177.
13. Reichheld, F.F. (2003). The one number you need
to grow. Harvard Business Review, 81(12), pp.
4655. Malcom Gladwell explains how different
types of epidemics, including word-of-mouth
epidemics, develop. Gladwell, M. (2000). The
Tipping Point, N.Y.: Little Brown and Company,
p.32.
14. Wirtz, J. & Chew, P. (2002). The effects of
incentives, deal proneness, satisfaction and
tie strength on word-of-mouth behaviour.
International Journal of Service Industry
Management, 13(2), pp. 141162. Hogan,
J.E., Lemon, K.N., Libai, B. (2004). Quantifying
the ripple: Word-of-mouth and advertising
effectiveness. Journal of Advertising Research,
(September), pp 271280.
15. Phelps, J.E., Lewis, R., Mobilio, L., Perry, D. &
Raman, N. (2004). Viral marketing or electronic
word-of-mouth advertising: Examining consumer
responses and motivations to pass along emails.
Journal of Advertising Research, (December),
pp. 333348; Datta, P.R., Chowdhury, D.N. &
Chakraborty, B.R. (2005). Viral marketing: New
form of word-of-mouth through Internet, The
Business Review, 3(2), (Summer), pp. 6975.
16. Thielst, C.B. (2007). Weblogs: A communication
tool. Journal of Healthcare Management, 52,
(September/October), pp. 297289; Yates, J.,
Orlikowski, W.J. & Jackson, A. (2008). The six
key dimensions of understanding media. MIT
Sloan Management Review, 49(2), (Winter), pp.
6269.
17. Kurutz, K. (2005).For travelers, blogs level the
playing eld. New York Times, (2005, August 7)
pp. TR-3.

Chapter 6

Caricato da

Informazioni sul documento

Copyright

Formati disponibili

Condividi questo documento

Condividi o incorpora il documento

Opzioni di condivisione

Hai trovato utile questo documento?

Questo contenuto è inappropriato?

Copyright:

Formati disponibili

Chapter 6

Caricato da

Copyright:

Formati disponibili

Dedications v

About the Authors vi

service. Tere are several steps that rms can take

Potrebbero piacerti anche