positioning and promotion.pptx

8/10/2019 positioning and promotion.pptx

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Slide 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 6 - 1

Educating Customersand Promoting theValue Proposition


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Overview

Role of Marketing Communications Communicating Services Presents Both Challenges

Opportunities Setting Communication Objectives The Marketing Communications Mix Role of Corporate Design Marketing Communications and the Internet


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Role of Marketing Communication


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Adding Value through Communication Content

Information and consultation represent important ways tadd value to a product

Provide information to prospective customerso Service options available, cost, specific features, functions, service ben

Persuade target customers that service offers best solutto meet their needs and build relationship with them

Help maintain relationships with existing customerso Requires comprehensive, up-to-date customer database and ability to m

use of this in a personalized way

o Direct mail and contacts by telephone, e-mail, websites, text messages For example, doctors sending annual checkup reminders to

patients


5/92Slide 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 6 - 6

Communicating Services PresentsBoth Challenges and Opportunities



Overcoming Problems of Intangibility

May be difficult to communicate service benefits tocustomers, especially when intangible

Intangibility creates four problems:o Abstractness

No one-to-one correspondence with physical objects

o Generality Items that comprise a class of objects, persons, or events

o Nonsearchability Cannot be searched or inspected before purchase

o Mental impalpability Customers find it hard to grasp benefits of complex, multidimensional

new offerings



Advertising Strategies for OvercomingIntangibility

Intangibility problemAdvertising strategy

Generalityo objective claims : Document physical system capacity

Cite past performance statisticso subjective claims : Present actual service delivery incident

Nonsearchability : Present customer testimonials Abstractness : Display typical customers benefiting Impalpability :Documentary of step-by-step process,

Source: Banwari Mittal and Julie Baker, Advertising Strategies for Hospitality Services, Cornell Hotel and Restaurant Administration Quarterly

2002, 53


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Facilitate Customer Involvement in Production

When customers are actively involved in service production, tneed training to perform well- HOW ? -Show service delivery in

action Television and videos engage viewero Dentists showing patients videos of surgical procedures before

surgery Advertising and publicity can make customers aware of chang

service features and delivery systems in b2b and b2c contextso Sales promotions to motivate customerso Offer incentives to make necessary changes in their behaviouro Price discounts to encourage self-service on an ongoing basis



Help Customers to Evaluate Service Offerings

Customers may have difficulty distinguishing one firm fromanothero Provide tangible clues related to service performance

Some performance attributes lend themselves better toadvertising than otherso Airlines

Boast about punctuality Do not talk overtly in advertising about safety, admission that things

might go wrong make prospective travelers nervous Use indirect approach: promote pilot expertise, mechanics maintenan

skills, newness of aircraft

If Firms expertise is hidden in low-contact servicesEx ImpobusinessDHL -o Need to illustrate equipment, procedures, employee activities tha

take place backstageo With 100 sales offices worldwide, the global network of DHL and special

relations to national Public Postal Operators (PPOs) DHL Global Mail

can offer you direct connections to more than 200 countries.



Stimulate or Dampen Demand to Match Capacit

Live service performances are time-specific and canbe stored for resale at a later dateo For example, haircut on Tuesdayso Advertising and sales promotions can change timing of custome

Examples of demand management strategieso Reducing usage during peak demand periods- increase priceo Stimulating demand during demand during off-peak period, for

example: Run promotions that offer extra valueroom upgrades, free breakfast


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Promote the Contributions of Service Personne

Frontline personnel are central to service delivery inhigh-contact services

Ads should show employees at work and this helps customers understthe nature of service encounter and what to expect once they reach theservice center. Ex ICICI Banks New Ad _ Khayal Aapka

Show customers the work performed behind the sceto ensure good deliveryo To enhance trust, highlight expertise and commitment of employe

whom customers normally do not normally encountero

Service personnel should be informed about the content of newadvertising campaigns or brochures before launch


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Setting Communication Objectives


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Checklist for Marketing Communications PlanninThe 5 Ws Model

Who is our target audience?

What do we need to communicate and achieve? Howshould we communicate this? Where should we communicate this? When do communications need to take place?


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Target Audience: 3 Broad Categories

Prospectso Employ traditional communication mix because prospects are not

known in advanceEx Ads, PR, telemarketing etc Userso More cost-effective channels.exrelationship manager

Employeeso Secondary audience for communication campaigns through public

mediao Risk generating cynicism among employees if communication in

question promotes levels of performance that are seen as unrealio Communications may be directed specifically at employees as pa

internal marketing campaign, not accessible to customers


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Common Educational and Promotional ObjectiveService Settings (1)

Create memorable images of specific companies antheir brands

Build awareness/interest for unfamiliar service/bran Build preference by:

o Communicating brand strengths and benefitso Comparing service with competitors offerings and countering th

claims

Reposition service relative to competition

Stimulate demand in off-peak, discourage duringpeak


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Common Educational and Promotional ObjectiveService Settings (2)

Encourage trial by offering promotional incentives Reduce uncertainty/perceived risk by providing use

info and advice Provide reassurance (e.g., promote service

guarantees) Familiarize customers with service processes befor

use Teach customers how to use a service to best

advantage Recognize and reward valued customers and

employees


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Key Planning Considerations

Full understanding of service product and how wellprospective buyers can evaluate its characteristics

advance Knowledge of target market segments

o Exposure to different mediao Awareness of products and attitudes

Recognition of decisions to be madeo Content, structure, and style of messageo Manner of presentationo Most suitable mediao Budget, time frameso Methods of measuring and evaluating performance


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The Marketing CommunicationsMix


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Marketing Communications Mix

Numerous forms of communication Different forms have distinctive capabilitiesdepend

ono Types of messages that can be conveyedo Market segments most likely to be exposed to them

Two types of communicationo Personal communications: personalized messages that move in

directions between two partieso Impersonal communications: messages move in only one directio

Technology creates gray area between botho For example, combine word processing technology with informat

from database to create impression of personalization; interactivesoftware;


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Marketing Communications Mix for Services (1)

Key: *Denotes communications originating from outside the organization

Word-of-mouth

(other customers)

Personalcommunications

Selling

Customerservice

Training

Advertising

Broadcast,podcasts

Print

Internet

Outdoor

Direct mail

Sales promotion

Sampling

Coupons

Sign-uprebates

Gifts

Prizepromotions

Telemarketing

Word ofmouth

*



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Key: * Denotes communications originating from outside the organization

Publicity &public relations

Pressreleases/kits

Websites

Manuals

Brochures

Interactivesoftware

Voice mail

Signage

Interior decor

Vehicles

Equipment

Stationery

UniformsMedia-initiated

coverage*


Pressconferences

Sponsorship

Special Events

Trade Shows,exhibitions

Instructionalmanuals

Corporate design


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Sources of Messages Received by TargetAudience

Messages originatingwithin organization

Messages originatingoutside organization

Productionchannels

Marketingchannels

Fron t-l ine staff

Service out lets

Adver t is ing

Sales promot ions

Direct market ing

Personal sel l ing

Publ ic relat ions

Word of mouth

Media edito rial

Sources

Source: Adapted from a diagram by Adrian Palmer, Principles of Services Marketing, London: McGraw-Hill,4th ed., 2005, p. 397


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Messages Transmitted through ProductionChannels (1)

Developed within organization and transmitted throuproduction channels that deliver the service itself

Customer service from front-line staffo Shape customers perceptions of service experience and the firmo Responsible for delivering supplementary services such as provid

information, receiving payment, resolving problems, etc.o Firm may require customer service staff to cross-sell additional

services


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Messages Transmitted through ProductionChannels (2)

Customer trainingo Familiarize customers with service product and teach them how

use it to their best advantage. Eg Sales Rep training customers internet banking

Service outletso Planned and unintended messages reach customers through the

medium of the service delivery environment itselfo Servicescape: Physical design of service outlet


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Messages through Marketing Channels: PersonSelling

Interpersonal encounters educate customers andpromote preferences for particular brand or producto

Common in b2b and infrequently purchased serviceso For example, insurance, property

Relationship marketing strategies based on accountmanagement programso Customer assigned to a designated account managero Ongoing need for advice, education, and consultationo For example, insurance, investment, medical services

Face-to-face selling of new products is expensivetelemarketing is lower cost alternative


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Messages through Marketing Channels: TradeShows

Popular in b2b marketplace Stimulate extensive media coverage

Many prospective buyers come to shows Opportunity to learn about latest offerings from wide

array of supplierso Environment is very competitiveo Compare and contrasto Question company reps

Physical evidence displayed through exhibits, samp

demonstrations


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Messages through Marketing Channels:Advertising

Build awareness, inform, persuade, and remind Challenge: How does a firm stand out from the crow

o Yankelovitch study shows 65% of people feel constantly bombby ad messages; 59% feel ads have little relevance

o TV, radio broadcasts, newspapers, magazines, Internet, manyphysical facilities, transit vehiclesall cluttered with ads

o Wide array of paid advertising mediao Ads reinforced by direct marketing toolso Many e-tailers now using electronic recommendation agents (R

Effectiveness remains controversial Research suggests that less than half of all ads

generate a positive return on their investment

M th h M k ti Ch l Di t


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Mailings, recorded telephone messages, faxes, e-ma Potential to send personalized messages to highly

targeted microsegmentso Need detailed database of information about customers and

prospects

Messages through Marketing Channels: DirectMarketing (1)

M th h M k ti Ch l Di t


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Advance in on-demand technologies empowerconsumers to decide how and when they prefer to b

reached, and by whomo For example, e-mail spam filters, pop-up blockers, podcasting

Permission marketing: customers encouraged to ratheir hands and agree to learn more about a compaand its products in anticipation of receiving somethof valueo Enables firms to build strong relationships with customerso For example, people invited to register at a firms website and sp

what type of information they like to receive via e-mail

Messages through Marketing Channels: DirectMarketing (2)

M th h M k ti Ch l


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Defined as communication attached to an incentive Should be specific to a time period, price, or customer group Motivates customers to use a specific service sooner, in greater

with each purchase, or more frequently Provides a competitive edge during periods when demand wou

weak

Messages through Marketing Channels:Sales Promotion (1)

Messages through Marketing Channels:


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Speeds up introduction and acceptance of new servic Interesting sales promotions can generate attention a

firm in favorable light (especially if interesting resultspublicized)o For example, SAS International Hotelsif a hotel had vacant room

guests older 65 years old could get a discount equivalent to their yo When a guest announced his age as 102 and asked to be paid 2%

room rate in return for staying the night, he received itand got a gtennis with the general manager!

Messages through Marketing Channels:Sales Promotion (2)

Messages through Marketing Channels:


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PR/publicity involves efforts to stimulate positive intein an organization and its products through third partio For example, press conferences, news releases, sponsorships

Corporate PR specialists teach senior managers how present themselves well at public events, especially wfaced with hostile questioning

Unusual activities can present an opportunity to promcompanys expertiseo For example, FedEx safely transported two giant pandas from Che

China, to the National Zoo in Washington, D.C. in a FedEx aircraftrenamed FedEx PandaOne

Messages through Marketing Channels:Public Relations

Messages Originating from Outside the


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Messages Originating from Outside theOrganization (1)

Word of Mouth (WOM)o Recommendations from other customers viewed as more credibo

Strategies to stimulate positive WOM Referencing other purchasers and knowledgeable individuals Creating exciting promotions that get people talking about firms great

service Developing referral incentive schemes Offering promotions that encourage customers to persuade others to j

them in using the service Presenting and publicizing testimonials that stimulate WOM

Pass along e-mailsconsumers motivation, attitud

and behaviors

Messages Originating from Outside the


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Messages Originating from Outside theOrganization (2)

Blogsa new type of online WOM

Editorial coverageo Compares, contrasts service offerings from competing organizato Advice on best buys


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Ethical Issues in Communication

Advertising, selling, and sales promotion all lendthemselves easily to misuse

Poor internal communications between operations amarketing personnel concerning level of serviceperformance

Deliberately exaggerated promises to secure sales Deceptive promotions Unwanted intrusion by aggressive marketers into

peoples personal lives


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Role of Corporate Design


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Strategies for Corporate Design (1)

Many service firms employ a unified and distinctivevisual appearance for all tangible elements

o For example, logos, uniforms, physical facilities Provide a recognizable theme linking all the firms

operations in a branded service experience throughstrategic use of physical evidenceo e.g., BPs bright green and yellow service stations

Use of trademarked symbol as primary logo, with nasecondaryo Shells yellow scallop shell on a red backgroundo MacDonalds Golden Arches


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International companies need to select designscarefully to avoid conveying a culturally inappropria

message

Strategies for Corporate Design (2)

FedEx: Use of Company Name In Corporate


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FedEx: Use of Company Name In CorporateDesign (1)

Changed trade name from Federal Express toFedEx

Distinctive logo featuring new name Chose FedEx Ground when decided to rebrand the

RPS ground delivery service it had purchasedsome years earliero Transfer positive image of its air services to less expensive

small-package ground service

FedEx: Use of Company Name In Corporate


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FedEx: Use of Company Name In CorporateDesign (2)

Created FedEx family of companies consisting ofsubbrands for different serviceso

FedEx Expresso FedEx Groundo FedEx Home Deliveryo FedEx Freighto FedEx Custom Criticalo FedEx Supply Chain Serviceso FedEx Kinkos

Each subbrand has different color scheme for seconword to create differentiation for subbrandso Express is red/orangeo Ground is green


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Marketing Communications andthe Internet


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Marketing Communications and the Internet

Can be accessed from almost anywhere in the world Simplest form of international market entry available

The firm cannot avoid creating interest in its offeringsoutside its local or national marketChrist ian Grnro os


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Internet Marketing Offers Powerful Opportunitie


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g ppfor Interactivity (2)

Must be part of integrated, well-designedcommunications strategy

Able to establish rapport with individual customerso Interactive nature of the Internet can increase customer involvemo Facilitates permission marketing and self-service marketing

Banks allow customers to pay bills electronically, apply for loans over Internet, and check account balances online


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Website Design Considerations (1)

Contain useful, interesting information for targetcustomers

Facilitate self-service in information gathering Users expecto Fast accesso Easy navigationo Relevant and up to date content


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EasyJet Paints Its Website Address on Each of


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Its More than 200 Aircraft

Source: www.easyjet.com/EN/About/photogallery.html. easyJet airline company limited

Effective Advertising on Internet: Banner


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Advertising (1)

Placing advertising banners and buttons on portalssuch as Yahoo!, Netscape and other firms websites

Draw online traffic to the advertisers own site Websites often include advertisements of other rela

but noncompeting serviceso Advertisements for financial service providers on Yahoo!s stock

quotes pageo Small messages from Amazon.com on web pages devoted to a

specific topico Links relevant to e-mail content on GMail

Effective Advertising on Internet: Banner


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Advertising (2)

Easy for advertisers to measure how many visits toown website are generated by click-throughs

Limitationso Obtaining many exposures (eyeballs) to a banner does not

necessarily lead to increase in awareness, preference, or saleso Problem of fraudulent click-throughs designed to boost apparen

effectiveness

Effective Advertising on Internet: Search EnginAd i i (1)


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Reverse broadcast networksearch engines letadvertisers know exactly what consumer wants thro

their keyword search Can target relevant messages directly to desiredconsumers

Several advertising optionso Pay for targeted placement of ads to relevant keyword searcheso Sponsor a short text message with a click-through linko Buy top rankings in the display of search results

Advertising (1)

Effective Advertising on Internet: Search EnginAd ti i (2)


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GoogleThe New Online Marketing Powerhouseo Google AdWordsallows businesses to connect with potential

customers at the precise moment when they are looking at relate

topics; advertisers can display their ads at websites that are partthe Google content network

o Google AdSenseIn return for displaying relevant Google ads otheir websites, publishers receive a share of advertising revenuegenerated

Advertising (2)


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Developing an Integrated MarketingC i ti St t


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Communications Strategy

Isolating online marketing activities from othermarketing activities may result in conflicting messao Customers will not have a clear picture of a firms positioning an

value proposition

IMC ties together and reinforces all communicationsdeliver a strong brand identity

Communications in different media should form para single, overall message about the service firm (neconsistency within campaigns about specific servic

products targeted at specific segments)


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Positioning Services in Competitive Market


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Market Segmentation Forms theBasis for Focused Strategies

Market Segmentation


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Firms vary widely in ability to serve different types ofcustomers

Micro Segmentation Micro segmentation strategies target small groups of customers s

certain relevant characteristics at a specific point in time e.g., Royal Bank of Canada10 million customers Segmented monthly basis using data modeling algorithms on bas

Risk profile Current and projected profitability Life stage

Likelihood of leaving the bank

Preferred channel Products held Response to promotions

Identifying and Selecting Target Segments


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Target segments should be selected with reference too Firms ability to match or exceed competing offerings directed at th

segmento Not just profit potential

Some underserved segments can be huge, especialpoor consumers in emerging economieso For example: rural consumersFinancial Services focusing on this


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Service Attributes and Levels

Developing Right Service Concept for a SpecificSegment


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Use research to identify and prioritize which attributea given service are important to specific market segm

Individuals may set different priorities according to:o Purpose of using the serviceEx Selection of Restauranto Who makes decisiono Timing of useo Whether service is used alone or with a groupo Composition of that group

Important versus Determinant Attributes


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Consumers usually choose between alternative servofferings based on perceived differences between th

Important Attribute : Prime attribute for selection of service. Ex On time departure

Determinant attributes determine buyers choicesbetween competing alternatives : Collection of SpecAttributes

Ex availability of frequent flyer programs, ease ofmaking reservations, quality of food and in-flight serfor business class

Establishing Service Levels and Tiers


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Need to make decisions on service levelslevel ofperformance firm plans to offer on each attributeo Easily quantified attributes are easier to understandand

generalizable

Service tiering: Positioning strategy based on offerinseveral price-based classes of service concept

Industry Tiers Key Service Attributes and Physical Elemenused in Tiering

Hotel Based on StarRatings

Landscaping, Architecture, room size, amenitieetc

Airline Classes : Economy,Business, Premium

Reservation flexibility, Check in services, Seatwidth, meal and beverage service, lounges atairports etc


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Positioning Distinguishes a Brandfrom Its Competitors

Four Principles of Positioning Strategy


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Must establish position for firm or product in minds customers

Position should be distinctive, providing one simple

consistent message Position must set firm/product apart from competito A company cannot be all things to all peoplemust

focus its efforts

Principles of Positioning


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The service managers needs to answer these questions beforeplanning positioning strategy

What does our firm currently stand for in the minds of current

prospective customers? What customers do we serve now, and which ones would we li

target in the future? What is value proposition and target segment for each of our

current service offerings? How do our service offerings differ from competitors? What changes must we make to our offerings to strengthen ou

competitive position?

Avoid trap of investing too heavily in points ofdifferences that are easily copied

Role of Positioning in Marketing Strategy


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Positioning links market analysis and competitive analysiinternal corporate analysis

From the above 3 a positioning statement is developed

Positioning strategy can take place at different levelso Multi-site, multi-product business: Position may be established fo

organization, given service outlet or specific service outleto Consistency among services offered at same location because th

image of one may spill over to otherso Ex. Hospital is specialized in cardiac care. It should position- Hea

Care Hospital

Help prospective customers get mental fix on what to e Failure to select desired position in marketplace and deve

marketing action plan to hold this position may result in:o Head-on competition from a stronger competitoro Organizations position being so blurred that nobody knows what

distinctive competence really is

Market, Internal, and Competitor Analysis(Fig 7.3)


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Source: Developed from an earlier schematic by Michae

Size Composition Location Trends

MarketingActionPlan

MARKETANALYSIS

INTERNALANALYSIS

Resources Reputation Constraints Values

COMPETITORANALYSIS

- Strengths Weaknesses Current

Positioning

Define, AnalyzeMarket Segments

SelectTarget Segments

To Serve

ArticulateDesired Position

in Market

Select Benefitsto Emphasizeto Customers

AnalyzePossibilities forDifferentiation

Anticipating Competitive Response


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Competitors might pursue same market positiono Independently do same positioning analysis and arrive at similar

conclusionso Competitors may take steps to reposition own service

Get inside competitors headsconduct internalcorporate analysis for all current/potential challengerget sense of how they might act

Couple these insights with market data Analyze possible effects of alternative competitive mo

o Impact of price cut on demand, market share, and profitso Responses of different segments to changes in service attributes


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Positioning Maps

Using Positioning Maps to Plot CompetitiveStrategy


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Useful way to represent consumer perceptions of alternatproducts in visual format

Information about a product can be obtained from marketderived from ratings by representative consumers, or bot

If consumer perceptions of service characteristics differsharply from "reality" as defined by management, thenmarketing efforts may be needed to change these percept

Also known as perceptual maps

Positioning of Hotels :Price versus Service Level


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Expensive

Shangri-La

HighService

ModerateService

Grand

Regency

Sheraton

Italia

CastleAlexander IV

Airport Plaza

PALACE

Atlantic

Less Expensive

Positioning of Hotels in Belleville:Location versus Physical Luxury


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High Luxury

Shopping Districtand Convention Center

Shangri-La

Moderate Luxury

FinancialDistrict

InnerSuburbs

Grand

Regency

Sheraton

ItaliaCastle

Alexander IV

Airport Plaza

PALACE

Atlantic

Positioning after New Construction: Price versuService Level


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Expensive

Shangri-La

HighService

ModeraService

HeritageMandarin

New Grand

Marriott

Continental

Regency

Sheraton

Italia

Alexander IV

Airport Plaza

PALACE

Atlantic

No action?

Action?

Less Expensive

Castle

Positioning After New Construction:Location versus Physical Luxury


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High Luxury

Shangri-La

FinancialDistrict

InnerSuburbs

Heritage

Mandarin

New Grand

MarriottContinental RegencySheraton

ItaliaAlexander IV

Airport Plaza

PALACE

Atlantic

No act ion?

Ac t ion?

Moderate Luxury

Castle

Shopping District

and Convention Center


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Changing Competitive Positionin

Repositioning

Firm may have to make significant change in existin


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Firm may have to make significant change in existinposition

Improving negative brand perceptions may requireextensive redesign of core product

Repositioning introduces new dimensions intopositioning equation that other firms cannot immedimatch

Changing Perceptions through Advertising:Long Island Trust

Increased competition among banks in New York state a


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Increased competition among banks in New York state achange in banking laws led to opening of new branches

Long Island Trust rated below other banks on branch

availability, full range of offerings, service quality etc., b#1 on helping residents and economy of Long Island(suburban New York City)

Advertising played to perceived strengths rather than trto improve perceptions of attributes rated less favorablyo Why send your money to a city if you live on the Island? It mak

sense to keep your money to close to homewe concentrate o

developing Long Islando The city is a great place to visit, but would you want to bank tho Perceived strength of being a Long Island bank for Long Island

had a positive halo effect on other attributes

Documents

positioning and promotion.pptx