SERVICES MARKETING MARKETING COMMUNICATIONS FOR SERVICES [ Part 2 ] Introduction: Modern marketing process involves something more than Just developing a good product (the First P), Pricing it attractively (the Second P), and Making it accessible (the Third P). It also calls for communication with the present and potential stakeholders and the general public (the Fourth P). Marketing communications, in one form or another, are essential to a company's success. For most companies today, the question is not whether to communicate, but rather what to say, to whom, and how often. So managers need to debate the question: “How should the Marketers communicate what our service has to offer?” Communications: In addition to being a global force, communication is the unique tool that marketers use to persuade the consumers to act in a desired way, say to vote, to buy, to donate, to patronise, etc. The location and atmosphere of a service delivery facility, corporate design features like the consistent use of colours and graphic elements, the appearance and behaviour of employees, website design—all of these factors contribute to an impression in the customer's mind. Communications are in many forms, like verbal, visual or symbolic, and convey special meaning that the marketers want to impart to the consumers. Communications can evoke emotions that put consumers in more receptive frames of mind, and it can encourage purchases that help consumers solve problems or avoid negative outcomes. In short, Communications is the bridge between marketers and consumers, and between consumers and their socio-cultural environments. Definition of Sales Promotion : Sales Promotion is an MC function that offers a tangible added value designed to motivate and accelerate a response. “Adding tangible value” means offering something more to the buyers who respond to SP. Examples may be 20% price off, 20% more goods, free samples of other products, “buy two get three”, one soap case free with two soaps, free talk time with handset, etc. SPs are mostly for a “limited period only”, There are two basic types of SP, like : Consumer Promotions : The consumer promotions are targeted and designed for the end users directly. Here, the marketers use a PULL strategy, which is the use of incentives to motivate end users to purchase a brand and thus put pressure on the retailer to stock that brand. The consumers thus “PULL” the products thro’ the distribution line towards themselves. Trade Promotions : The trade promotions are targeted and designed for members of the distribution channels, such as distributors, wholesalers, retailers. Here, the marketers use a PUSH strategy, which is the use of incentives to motivate the buying and reselling of products. The traders thus “PUSH” the products down the distribution line towards the consumers.

1. SERVICES
MARKETING
MARKETING
COMMUNICATIONS FOR
SERVICES [ Part 2 ]
Himansu S M
1

2. Definition of Sales Promotion :
• Sales Promotion is an MC function that
offers a tangible added value designed to
motivate and accelerate a response.
• “Adding tangible value” means offering
something more to the buyers who
respond to SP.
• Examples may be 20% price off, 20% more
goods, free samples of other
products, “buy two get three”, one soap
case free with two soaps, free talk time
with handset, etc. SPs are mostly for a
“limited period only”,
• There are two basic types of SP, like :
2

3. Consumer Promotions :
• The consumer promotions are
targeted and designed for the end
users directly.
• Here, the marketers use a PULL
strategy, which is the use of incentives
to motivate end users to purchase a
brand and thus put pressure on the
retailer to stock that brand.
• The consumers thus “PULL” the
products thro’ the distribution line
towards themselves.
3

4. Trade Promotions :
• The trade promotions are targeted and
designed for members of the
distribution channels, such as
distributors, wholesalers, retailers.
• Here, the marketers use a PUSH
strategy, which is the use of incentives
to motivate the buying and reselling of
products.
• The traders thus “PUSH” the products
down the distribution line towards the
4

5. Actions in various Lifecycle Stages
INTRODUCTION GROWTH MATURITY DECLINE
To Inform To Persuade To remind To wind up
Publicity Reminder
Advertising
Sales Promotion
in form of free
samples
Advertising to
the brand
attributes from
those of
competing brand
Sales Promotion
in forms of
discounts and
coupons
Decrease the
Marketing
Communications
Budget
Sales force
calling on
Intermediaries
Personal selling
to intermediaries
Limited personal
selling
Launching of a
new or Re-
launching of
Product
Advertising Direct Mail
Reminders
5

6. PUSH - & PULL - STRATEGIES
COMPANY CONSUMER
PULLTRADER
SALE
COMPANY TRADER
PUSHCONSUMER
SALE
6

7. Promotional Strategies For Services
• Sampling : It’s a technique for promoting
products by offering them as a sample free of
cost. It’s more widely used for packaged or
physical goods. However, some service
industries like credit card companies travel and
tourism companies offer free services during
the promotional period. For example, some
credit card companies offer cards without initial
charges.
• Premiums : Premiums provide tangibility to
services. This is used more regularly in
insurance sectors where differentiation of
services is not possible. An insurance company
might fix the premiums depending on the initial
deposits of the amount of policy insured by the
customers.
7

8. Promotional Strategies For Services
• Prize Promotions : Prize promotions are
adopted to keep up the interest of
customers and involve them in the service
consumption.
• Price / Quantity Promotions : These
promotions include reduction of price for
a category of customers, or all customers
for a limited time. For example, a company
might offer a price reduction for the first
fifty customers who will consume the
8

9. Promotional Strategies For Services
• Refunds and Future Discounts : These
type of promotions aim to increase brand
loyalty among customers and promise
them certain amount of refund or
discounts in future. For example, several
airlines offer discounts as per the mileage
points collected by the frequent fliers.
• Coupons : Coupons may be offered for a
direct reduction in prices, free services
for one or more persons with the original
customer, or a discount on the original
service offer. 9

10. Setting Communication Objectives
• When planning a campaign, marketers
need to formulate specific
communications objectives and select
the most appropriate messages and
tools to achieve them.
• For the campaign plan to
succeed, customers must be informed
about these new features and
educated on how to take advantage of
them. A specific set of
communications objectives might be:
10

11. Setting Communication Objectives
• (1) to create awareness of the new
offering among all existing customers;
• (2) to attract the attention of prospective
customers in the business traveller
segment, inform them of the new features,
and teach them how to use the new
procedures effectively;
• (3) to stimulate inquiries and increase pre-
bookings; and
• (4) to generate an increase in repeat
patronage of 20 percent after six months.
11

12. Setting Communication Objectives
• Planning a marketing communications
campaign should reflect a good
understanding of the service product
and the ability of prospective buyers to
evaluate its characteristics in advance
of purchase.
• It's also essential to understand target
market segments and their exposure
to different media, as well as
consumer awareness of the product
and attitudes toward it.
12

13. Setting Communication Objectives
• Decisions include determining the
content, structure, and style of the
message to be communicated, its manner
of presentation, and the media most
suited to reaching the intended audience.
• Additional considerations include: the
budget available for execution; time
frames (as defined by such factors as
seasonality, market opportunities, and
anticipated competitive activities); and
methods of measuring and evaluating
13

14. How To Design A Service Promotion :
• Designing a successful promotion is not
easy and involves inclusion of tangible
attributes, which adds up the cost of
campaign. A service provider should try to
• (1) identify the services to be promoted,
• (2) choose the target audience,
• (3) estimate the value to be added,
• (4) decide the timing and duration of the
promotional campaign,
• (5) the techniques to be used, and finally,
• (6) determine how the promotion is
different from those of the competitors.
14

15. Which Service to Promote :
• If the service provider is under heavy
pressure from competition and his aim
is to survive in the market, he may opt
to promote his services accordingly.
• If a service provider’s aim is to attract
new customers then he should opt to
promote a low-risk and relatively
inexpensive service which will do the
job successfully.
15

16. Which Service to Promote :
• Once new customers are attracted to
the service, a service provider can sell
other services apart from the original
service offered (cross-selling).
• On the other hand if the service
provider’s aim is to stop the
competition from snatching away
customers a service provider can opt
to increase the period of contract with
customers.
16

17. Who would be Target Consumer :
• Service companies have an
opportunity to target their promotional
campaigns to a specific market
segment or to the entire market.
• This kind of promotion targeted at
demographic segments is not possible
in packaged goods industry.
• Further services are flexible compared
to packaged goods and have numerous
opportunities for price differentiation.
17

18. What would be the Value added to the
Product / Brand :
• Service providers should be careful
when assessing the value to be offered
to the customer. Factors like
promotional objective, costs of
promotion, and customer perceptions
of value should be considered while
developing value promotions. These
can be of two types :
–One is offering more for the same price,
–The other is offering the same for a lower
or discounted price. 18

19. Is the Timing right for promotion and how
long should a Promotional Campaign run :
• The timing of the promotional campaign
depends on the d
• demand fluctuations in the service
demand. The duration of the promotional
campaign should be based on the value of
the service offering, the target
consumers’ purchasing power and finally
it should be extended to make sure that
most of the customers are covered by the
campaign.
• The frequency of promotions depends on
the existing competition in the market and
the target customer’s purchase cycle.
19

20. Who’s benefited from the Promotion :
• Service providers should carefully
identify the group of customers whose
purchase behaviour needs to be
influenced by the promotional
campaign.
• After identifying the target
customers, companies should verify if
the end customer is benefited directly.
For example, sometimes, the company
sponsoring employees’ flights get the
benefit of frequent fliers programme.
20

21. How to Differentiate a Promotional
Campaign :
• A service provider who has designed an
innovative promotional campaign soon
finds hid competitor in the market
imitating it.
• To avoid this, a service provider should
design a promotional campaign that can’t
be easily imitated by competitors.
• Otherwise, it should enter into
agreements with other service companies
to develop joint-promotions that make it
impossible for the competitors to imitate
easily.
21

22. Strategies For Effective Promotion :
• Some service companies no doubt
design good promotional campaigns
but use up or waste too much of
resources
like, time, money, effort, thereby
greatly reducing the net outcome.
• The following are the guidelines for
implementing effective promotional
campaigns :
22

23. 1. Effective Planning :
• Service organisations should develop a
programme calendar to monitor the
sequence of promotional events.
• Further an exclusive promotion
department in the marketing division of an
organisation would help a service
company monitor the promotional process
continuously.
• This would result in variety and
innovativeness in the promotions, and a
common thread of consistency can be
maintained in developing the various
23

24. 2. Focussed Objectives :
• Service providers should set a few
objectives, as it will help them to do a
better job.
• The choice of objectives should be
according to their promotional
expenditures rather than expecting too
much from a single campaign and
hoping to achieve too many objectives
with one promotion.
24

25. 3. Accurate Timing :
• Service providers should decide on
the timing of the promotional
campaign, its duration, and the
frequency of such campaigns.
• Service providers should not extend
the campaign to the extent that
consumers tend to think it’s a
permanent offer. These situations can
cost the service provider heavily.
25

26. 4. Adding Value through tie-ups and
promotion overlays :
• Often, service providers offer
promotions in packages either by
including other services of their own
company or by tying-up with other
service companies.
• Further, if service providers tie-up with
packaged goods then these
promotional offers are quite attractive.
26

27. 5. Employee Motivation :
• A successful promotional campaign
requires the efforts of the entire sales
force and the marketing team.
• Therefore, service companies should
motivate their
employees, consumers, sales
intermediaries, etc. by using both
PUSH and PULL strategies effectively.
27

28. 6. Well Differentiated Campaign :
• Service companies should ensure that
their promotional campaigns are well
understood and well-differentiated
from those of their competitors.
28

29. 7. Regular Evaluation of Campaigns
• Service campaigns should evaluate
increase in sales due to the launch of
promotional campaigns.
• This helps them assess the value-
added by the promotions and evaluate
their campaigns to identify avenues for
improvement.
29

30. MARKETING COMMUNICATIONS AND THE
INTERNET
• The Internet is playing an increasingly
important role in marketing
communications. Few companies of any
size are now without a Web site and a
substantial industry has sprung up to
support the design and implementation of
Internet-based marketing activities.
• Perhaps the most remarkable aspect of
the Internet is its ubiquity : A Web site
hosted in one country can be accessed
from almost anywhere in the world,
offering the simplest form of international
market entry available.
30

31. MARKETING COMMUNICATIONS AND THE
INTERNET
• In fact, as Christian Gronroos points
out, "the firm cannot avoid creating
interest in its offerings outside its local
or national market."
• However, creating international
access and developing an inter-
national strategy are two very different
things!
31

32. Internet Applications
• Marketers use the Internet for a variety of
communications tasks. These include :
• promoting consumer awareness and
interest,
• providing information and consultation,
• facilitating two-way communications with
customers through e-mail and chat rooms,
• stimulating product trial,
• enabling customers to place orders, and
• measuring the effectiveness of specific
advertising or promotional campaigns. 32

33. Internet Applications
• Firms can market through their own
Web sites and place advertising on
other sites.
• Advertising on the Web allows
companies to supplement
conventional communications
channels at a reasonable cost.
• But like any of the elements of the
marketing communications mix,
Internet advertising should be part of
an integrated, well-designed
33

34. Internet Applications
• Many early Web sites were little more than
electronic brochures, featuring attractive
graphics that took too long to download.
• By contrast, interactive Web sites allow
customers to engage in dialog with a database
and come up with customised information.
• Transportation firms like airlines and railroads
offer interactive sites that allow travellers to
evaluate alternative routes and schedules for
specific dates, download printed information, and
make reservations online.
• Some sites offer discounts on hotels and airfare if
reservations are made over the Internet—a tactic
designed to draw customers away from
intermediaries like travel agents.
34

35. Internet Applications
• The interactive nature of the Internet
has the potential to increase customer
involvement dramatically, since it
enables "self-service" marketing in
which individual customers control the
nature and extent of their contact with
the Web sites they visit.
• Many banks allow customers to pay
bills electronically, apply for loans over
the Internet, and check their account
35

36. "Permission Marketing"
• Enabling marketers to communicate and
establish a rapport with individual customers
is one of the Web's greatest strengths.
• These characteristics lend themselves to a
new communications strategy called
"Permission Marketing", which is based on
the idea that traditional advertising doesn't
work as well any more because it fights for
attention by interrupting people.
• For example, a 30-second television spot
interrupts a viewer's favourite program, a
telemarketing call interrupts a meal, and a
print ad interrupts the flow of a magazine or
newspaper article.
36

37. "Permission Marketing"
• In the permission marketing model, the
goal is to persuade consumers to
"volunteer" their attention.
• In essence, customers are encouraged
to "raise their hands" and agree to
learn more about a company and its
products in anticipation of receiving
something of value to them.
• This means that customers self-select
into the target segment.
37

38. Internet Advertising
• The Internet has become a new
advertising medium. Many firms pay to
place advertising banners and buttons
on portals like Yahoo or Netscape, as
well as on other firms 'Web sites.
• The usual goal is to draw online traffic
to the advertiser's own site. In many
instances, Web sites include
advertising messages from other
marketers with related but
noncompeting services.
38

39. Internet Advertising
• However, the Internet has not proved to be
as effective an advertising medium as
many marketers originally anticipated.
• Experience shows that simply obtaining a
large number of exposures ("eyeballs") to
a banner ad or button doesn't necessarily
lead to increases in awareness,
preference, or sales for the advertiser.
• One consequence is that the practice of
paying a flat monthly rate for banner
advertising is falling out of favour.
39

40. Internet Advertising
• Even when visitors click through to the
advertiser's site, this action doesn't
necessarily result in sales.
• Consequently, there's now more
emphasis on advertising contracts that
tie fees to marketing-relevant
behaviour by these visitors, such as
providing the advertiser with some
information about themselves or
making a purchase.
40

41. Reciprocal Marketing
• Some companies use reciprocal
marketing, where an online retailer allows
its paying customers to receive
promotions for another online retailer and
vice-versa, at no upfront cost to either
party.
• For example, RedEnvelope.com
customers received an online coupon
offer from Starbucks when they logged
onto the Red Envelope site. In exchange,
Red Envelope had a promotional link on
Starbucks.com, enabling both companies
to capture a percentage of the other site's41

42. ETHICAL ISSUES IN MARKETING
COMMUNICATION
• A few aspects of marketing lend
themselves so easily to misuse (and even
abuse) as advertising, selling, and sales
promotion.
• The fact that customers often find it hard
to evaluate services makes them more
dependent on marketing communication
for information and advice.
• Communication messages often include
promises about the benefits that
customers will receive and the quality of
service delivery.
42

43. ETHICAL ISSUES IN MARKETING
COMMUNICATION
• When promises are made and then
broken, customers are disappointed
because their expectations have not been
met.
• Their disappointment and even anger will
be even greater if they have wasted
money, time, and effort and have no
benefits to show in return or have actually
suffered a negative impact.
• Employees, too, may feel disappointed
and frustrated as they listen to customers'
complaints about unfulfilled expectations.
43

44. ETHICAL ISSUES IN MARKETING
COMMUNICATION
• Some unrealistic service promises result
from poor internal communications
between operations and marketing
personnel concerning the level of service
performance that customers can
reasonably expect.
• In other instances, unethical advertisers
and salespeople deliberately make
exaggerated promises about the benefits
that customers can hope to receive.
44

45. ETHICAL ISSUES IN MARKETING
COMMUNICATION
• Finally, there are deceptive promotions
that lead people to think that they have a
much higher chance of winning prizes or
awards than is really the case.
• Fortunately, there are many consumer
watchdogs on the lookout for these
deceptive marketing practices.
• They include consumer protection
agencies, trade associations within
specific industries, and journalists who
investigate customer complaints and seek
to expose fraud and misrepresentation.
45

46. ETHICAL ISSUES IN MARKETING
COMMUNICATION
• A different type of ethical issue concerns
unwanted intrusion into people's personal
lives—including, perhaps, your own.
• You can, of course, simply turn the page if
you don't want to look at an advertisement
in a newspaper or magazine.
• Perhaps you ignore television advertising
by pressing the mute button on your
remote and by talking to friends or family
members while the commercials are on.
46

47. ETHICAL ISSUES IN MARKETING
COMMUNICATION
• However, the increase in telemarketing
and direct mail is frustrating for those who
receive unwanted sales communications.
• How do you feel if your evening meal at
home is interrupted by a telephone call
from a stranger trying to interest you in
buying services in which you have no
interest?
• Even if you are interested, you may feel,
as many do, that your privacy has been
47

48. ETHICAL ISSUES IN MARKETING
COMMUNICATION
• Trade associations like the Direct
Marketing Association offer ways for
consumers to remove their names
from telemarketing and direct-mail
lists in an attempt to address the
growing hostility toward these types of
direct-marketing techniques.
• Ex. : Do Not Disturb Requests.
48

49. END OF PART -2
© Himansu S M / 16-08-2013
49