SM: Session 8 Service Promotion

The word promotion is derived from the Latin word meaning ‘to move forward’. In services marketing mix, promotion is the fourth P. Many service businesses do not spend much on promotional activities. For example, advertising agencies do not advertise-for themselves. Marketing Research companies rarely advertise (in India). The reasons may be...

• For many service products, the target market may be a narrow segment
• Many service providers rely on word of mouth

Many services also need trials. Service provider needs a critical mass of early birds to try your service product in the initial stages. For this, an objective-based promotion plan is a must. In today’s jargon, it could be termed an Integrated Marketing Communication plan.

Role of Marketing Communications

Marketing communications in services not only establishing brand image and equity through customer oriented positioning and differentiation but also performs several tasks:

Service Differentiation

Due to service characteristics, customers may have difficulty distinguishing one firm from another. However, service firm may promote the tangible clues related to service performance. There are performances attributes lend themselves better to advertising than others. For example, Indigo Airlines promoting on the attributes like no delays, low fares and more connectivity. Service firms also need to illustrate equipment, procedures, employee activities that take place backstage.  For example an airliner may advertise with information on acquisition on a new aircraft.

People Differentiation

Frontline personnel are central to service delivery in high-contact services. These are the ones who make the service more tangible and personalized. Advertisement with people creates a very good impact on customer’s psychology. Many firms show customers work performed behind the scenes to ensure good delivery. Like restaurants showing kitchen. 

Such advertisements also enhance trust, highlight expertise and commitment of employees. But these advertisements must be realistic as these messages help set customers’ expectations.  Service personnel should be informed about the content of new advertising campaigns or brochures before launch.

Customer Role

In services where customers are actively involved in service production; they need training to perform well, the service provider show service delivery in action. For example, dentists show patients videos of surgical procedures before surgery.

Demand Management

Live service performances are time-specific and can’t be stored for resale at a later date. Advertising and sales promotions can change timing of customer use. Some examples of such strategies:

• Firm may advertise less to reducing usage during peak demand periods
• Stimulating demand during off-peak period with heavy advertisement and discounts.
  

Overcoming Problems of Intangibility

Generality

 This refers to the items that comprise a class of objects, persons, or events. For example, airline seat, flight attendant and cabin services. Service firm’s use this as strong point of difference and design their value proposition around it. Many attractions and hotel provide 360 degree view of the facility on their website to help customer overcome this problem.

Abstractness

Most service products are abstract like financial security, wellness, and life-time experience. There is no one-to-one correspondence with physical objects. To overcome this problem, firms may show processes, testimonials and experience through videos.

Non-searchability

Services cannot be searched or inspected before purchase. Though physical facilities may be known in advance but the actual service experience can only be experience. Many service providers like medical practioners, restaurants and hotels display the credential to help customer overcome the perceived risk.

Mental impalpability

Customers find it hard to grasp benefits of complex, multi-dimensional new offerings. A lot of visuals and brochures help in such cases.

Overcoming Problems of Intangibility

To overcome intangibility the firm should use tangible cues in advertising. They are also seen using metaphors to communicate benefits of service offerings, like SIDBI – “Giving a helping hand”

Objectives of Promotion in Services

Customer Education

The biggest objective of promotion is to create wide (100% or close) awareness about a service. Service promotions also aim to convert a certain percentage of the aware consumers into buyers of the service brand. Promotions can build strong brand equity.

They can also be used to create awareness about an unknown service product. For example, ICICI bank offers quick and easy individual tax payment facility.

Promotions also aim to inform customer about the individual benefits that they can look forward from a service.

 Useful information and awareness can also reduce customer perceived risk.

Customer education can also be imparted by giving demonstrations.

Competition

Companies can place its product positioning favourably with competitors offerings. Advertisement and other promotional tolls also help firms reposition them relative to competition.

They can build preference by communicating strengths and benefits advertisement and sales promotional programs. For example, Drunkin’ donuts had this campaign where they asked respondent to taste and compare the coffee with Starbucks.

Other Promotional Objective

Promotion also help consumer form expectations and provide assurance to customers. For example, B-school advertise their rankings and placement data to assure good future to it's students.

Promotions also help consumer decide or change the timing of customer demand for the  service.

Lastly, loyalty programs, contests and discounts can reward and retain loyal customers.

Service Promotion Mix

The service marketers have to decide between personal form of communication and non-personal form of communication. With the use of technology and digitalization of customer information, the marketers can target large number of customers through personal channels like emails. Though the promotional program originates from service provider, the importance of word of mouth cannot be ignored by the service marketers. Also apart from conventional promotion, a huge amount of promotion happens through production of service itself. Hence the role and important of frontline staff and their interaction with the customer is very important. Many service firms treat training of frontline employees as a part of the promotions only.  The role of customer in the production of services can also be crucial.

Advertising

Advertising is any paid form of non-personal presentation about services through an appropriate medium like television, radio, magazines, newspapers and internet. It is the most dominant and persuasive form of marketing communications since ages. The service providers use advertising to show the processes, equipment and other important service features.

Advertisement though and effective for most service product, it is an expensive form of communication and may get unnoticed due to clutter. It is a non-personal form of communication and hence may not be suitable for many customers.

Personal Selling

Personal Selling is done through presentation of services in conversation with one or more prospective purchasers. It is most preferable for small firms as it is more personal than advertising and aims at maintaining long term relationships with customers. This is also very useful for services where there is a constant need for customer counselling, education and consultation. For example, banking and other financial services.

Other cost effective form of personal selling is telemarketing.

Publicity

It is defined as non-personal stimulation of demand for a service by obtaining commercially significant news / presentation about it in any medium not paid by the service provider. 

Press releases, testimonials from celebrities,  and hosting or sponsorship are important form of publicity. For example, FedEx safely transported two giant pandas from Chengdu, China, to the National Zoo in Washington, D.C. in a FedEx aircraft renamed FedEx PandaOne.

Sales Promotion

Marketing activities other than the above that stimulates customer purchasing and use and enhance dealer effectiveness. Competitions, coupons and discounts are very common in service promotions. For example, SAS International Hotels—if a hotel had vacant rooms; guests older 65 years old could get a discount equivalent to their years.

When a guest announced his age as 102 and asked to be paid 2% of the room rate in return for staying the night, he received it—and  got a game of tennis with the general manager! 

Direct Marketing

A very personal mode of communication use mails, telephones and other direct channels. In permission marketing model, the firm reach out to only those customers who have allowed the communication through emails and sms. 

The choice of promotion mic tool, however depends upon number of internal and external factors:

• Different sources of messages that a customer receives
• Selection criteria for the promotion
• Overall marketing objectives
• Nature of the service
• Characteristics of target consumers
• Nature and attitudes of intermediaries
• Competitors
• Cost effectiveness
• Integration with other marketing elements
• Requirements for effective implementation