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MKTG 7504Services MarketingSeminar 12
Managing Service Promises, IMC & Pricing
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The Communications Gap
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Key Factors Leading to ProviderKey Factors Leading to Provider
Gap 4Gap 4
The Communications GapThe Communications Gap
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Discuss the key service communication
challenges. Introduce the concept of integrated service
marketing communications.
Discuss ways to integrate marketingcommunications in service organisations.
Present specific strategies for addressingservice intangibility, managing promises,managing customer expectations, educating
Objectives Chapter 16:Integrated Services Marketing
Communications
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Communications and theCommunications and the
Services Marketing TriangleServices Marketing Triangle
Firms need to ensure thatmessages from all companysources are consistent
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Integrated Services Communications a strategy that carefully integrates all external and
internal communication channels to present a consistentmessage to customers
This means coordination across: sales and service people print Internet
other forms of tangible communication including theservicescape
How is this done in services? advertising sales presentations service encounters with employees servicescape and other tangibles
Integrated ServicesCommunications
public relations pricing service guarantees customer education
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Key Service CommunicationChallenges
7
Service intangibilityService intangibility
Management of service promisesManagement of service promises
Management of customer expectationsManagement of customer expectations
Customer educationCustomer education Internal marketing communicationInternal marketing communication
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Five Major Approaches to OvercomeService Communication Channels
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Addressing Service
Intangibility Use narrative to
demonstrate the serviceexperience
Present vividinformation
Use interactive imagery Focus on the tangibles Use brand icons to
make the servicetangible
Use association,physical representation,documentation, and
visualisation
Use buzz or viral
marketing Leverage social media Aim messages to
influencers Create advertising that
generates talk becauseit is humorous,compelling, or unique
Feature satisfiedcustomers in the
communication Generate word-of-
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Service Brand Icons
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Services Advertising StrategiesMatched with Properties of Intangibility
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Create a strong service brand
Coordinate external communication
Approaches for ManagingApproaches for Managing
Service PromisesService Promises
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Service Branding Model
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Worlds Most Valuable Brands(2010)
Coca-Cola continues its reign as#1 global brand
Technology brands dominate the
top 10: IBM (#2), Microsoft(#3), Google (#4), Intel (#7),and HP (#10).
The fastest gainer is Apple,from #20 to #17 with a 37%
increase in its brand valuation. The top five losers in ranking:Harley-Davidson, -24% inbrand valuation; Toyota -16%;Nokia -15% (from #5 to #8);Dell -14% (from #35 to #41);
and Citi, -13%
1. Coca Cola $70.452bn +2%2. IBM $64.727bn +7%3. Microsoft $60.895bn +7%
4. Google $43.557bn +36%5. GE $42.808bn -10%6. McDonalds 33.578bn +4%7. Intel $32.015m +4%8. Nokia $29.495bn -15%9. Disney $28.731bn +1%10. HP $26.867bn +12%
http://www.interbrand.com/en/knowledge/best-global-brands/best-global-brands-2008/best-global-brands-2011.aspx
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Make realistic promises
Offer service guarantees
Offer choices
Create tiered-value service offerings
Communicate the criteria and levels of
service effectiveness
Approaches for Managing
Customer Expectations
15
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Prepare customers for the service
process
Confirm performance to standards andexpectations
Clarify expectations after the sale
Teach customers to avoid peakdemand eriods and to seek slow
Approaches for ManagingCustomer Education
http://www.qantas.com.au/travel/airlines/checkin/global/en
http://www.nrma.com.au/car-insurance/index.shtml
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Create effective vertical communications Sell the brand inside the company Create effective upward communication Create effective horizontal
communications Align back-office and support personnel
with external customers throughinteraction or measurement
Create cross-functional teams of sales,service, and operations people when
developing new services or engaging inservice im rovements
Approaches for Managing InternalMarketing Communication
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Employing integrated services
marketing communication strategiesaround everything and everyone thatsends a message or signal.
Manage customer expectationseffectively throughout the experience.
Develop mechanisms for internalcommunication to avoid over-
promising and ensure successful
Best Practices for Closing theCommunication Gap (Gap 4)
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Source: http://www.newdhl.com/advertising.asp?cid=dhlbt1hmpg1
DHLs Integrated Marketing Campaign
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DHLs Outdoor Advertising
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DHLs Print Advertising
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DHLs Print Advertising Links toEmployees
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DHL Global Advertisements
23
Watch the following videos and consider if DHL is sending a standardised
message within the global marketplace?
Video: DHL India - A customised or globalised service message?http://www.johnwiley.com.au/highered/asx/4078High.asx
Video: DHL China - A customised or globalised message?
http://www.johnwiley.com.au/highered/asx/4080High.asx
Video: DHL United States - A customised or globalised message?http://www.johnwiley.com.au/highered/asx/4079High.asx
http://www.johnwiley.com.au/highered/asx/4078High.asxhttp://www.johnwiley.com.au/highered/asx/4080High.asxhttp://www.johnwiley.com.au/highered/asx/4079High.asxhttp://www.johnwiley.com.au/highered/asx/4079High.asxhttp://www.johnwiley.com.au/highered/asx/4080High.asxhttp://www.johnwiley.com.au/highered/asx/4078High.asx -
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http://mumbrella.com.au/nrma-insurance-stages-never-without-a-car-live-faceboo
http://mumbrella.com.au/nrma-insurance-stages-never-without-a-car-live-facebook-stunt-48228http://mumbrella.com.au/nrma-insurance-stages-never-without-a-car-live-facebook-stunt-48228 -
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http://mumbrella.com.au/nrma-spot-portrays-a-life-without-a-car-41377
http://mumbrella.com.au/nrma-spot-portrays-a-life-without-a-car-41377http://mumbrella.com.au/nrma-spot-portrays-a-life-without-a-car-41377 -
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http://www.bandt.com.au/news/breaking-campaign--nrma-asks-drivers-to-experience
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Customers often lack reference prices for
service Service variability limits knowledge
Providers are unwilling to estimate prices
Individual customer needs vary Collection of price information by customers
is difficult
Prices are not visible
Customer Often Lack of Knowledgeof Service Prices
http://www.budgetdirect.com.au/cheap-car-insurance/car-insurance-quotes-customer-savings.html
http://www.bandt.com.au/news/breaking-campaign--nrma-asks-drivers-to-experiencehttp://www.bandt.com.au/news/breaking-campaign--nrma-asks-drivers-to-experiencehttp://www.bandt.com.au/news/breaking-campaign--nrma-asks-drivers-to-experiencehttp://www.bandt.com.au/news/breaking-campaign--nrma-asks-drivers-to-experiencehttp://www.bandt.com.au/news/breaking-campaign--nrma-asks-drivers-to-experiencehttp://www.bandt.com.au/news/breaking-campaign--nrma-asks-drivers-to-experiencehttp://www.bandt.com.au/news/breaking-campaign--nrma-asks-drivers-to-experiencehttp://www.bandt.com.au/news/breaking-campaign--nrma-asks-drivers-to-experiencehttp://www.bandt.com.au/news/breaking-campaign--nrma-asks-drivers-to-experiencehttp://www.bandt.com.au/news/breaking-campaign--nrma-asks-drivers-to-experiencehttp://www.bandt.com.au/news/breaking-campaign--nrma-asks-drivers-to-experiencehttp://www.bandt.com.au/news/breaking-campaign--nrma-asks-drivers-to-experiencehttp://www.bandt.com.au/news/breaking-campaign--nrma-asks-drivers-to-experiencehttp://www.bandt.com.au/news/breaking-campaign--nrma-asks-drivers-to-experiencehttp://www.bandt.com.au/news/breaking-campaign--nrma-asks-drivers-to-experiencehttp://www.bandt.com.au/news/breaking-campaign--nrma-asks-drivers-to-experiencehttp://www.budgetdirect.com.au/cheap-car-insurance/car-insurance-quotes-customer-savings.htmlhttp://www.budgetdirect.com.au/cheap-car-insurance/car-insurance-quotes-customer-savings.html -
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Time costs Search costs
Convenience costs
Psychological costs
The Role of Non-monetaryPrice
Customers will trade money for time savings
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40
Total User Cost
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Reducing Non MonetaryCosts
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Trade-off between Monetary& Non-monetary costs
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Price as an Indicator of ServicePrice as an Indicator of Service
QualityQuality
Can price attract somecustomers?
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Price as an Indicator of ServicePrice as an Indicator of Service
QualityQuality
Infers Low Quality Service
InfersHigh QualityService
http://www.budgetdirect.com.au/cheap-car-insurance/car-insurance-quotes-customer-savings.htmlhttp://www.budgetdirect.com.au/cheap-car-insurance/car-insurance-quotes-customer-savings.htmlhttp://www.budgetdirect.com.au/cheap-car-insurance/car-insurance-quotes-customer-savings.htmlhttp://www.budgetdirect.com.au/cheap-car-insurance/car-insurance-quotes-customer-savings.htmlhttp://www.budgetdirect.com.au/cheap-car-insurance/car-insurance-quotes-customer-savings.htmlhttp://www.budgetdirect.com.au/cheap-car-insurance/car-insurance-quotes-customer-savings.htmlhttp://www.budgetdirect.com.au/cheap-car-insurance/car-insurance-quotes-customer-savings.htmlhttp://www.budgetdirect.com.au/cheap-car-insurance/car-insurance-quotes-customer-savings.htmlhttp://www.budgetdirect.com.au/cheap-car-insurance/car-insurance-quotes-customer-savings.htmlhttp://www.budgetdirect.com.au/cheap-car-insurance/car-insurance-quotes-customer-savings.html -
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A Customer-Focussed Approach toThe Pricing Process
Th B i M k ti P i St t
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Three Basic Marketing Price Structuresand Challenges for Services
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Approaches to PricingServices
Cost-based pricingCost-based pricing- Set prices relative to financial costs.Set prices relative to financial costs.
-
Challenges (e.g., costs difficult to trace)Challenges (e.g., costs difficult to trace)Competition-based pricingCompetition-based pricing
- Monitor competitors pricing strategy (esp if serviceMonitor competitors pricing strategy (esp if service
lacks differentiation)lacks differentiation)
- Who is the price leader? Does one firm set theWho is the price leader? Does one firm set thepace?pace?
- Challenges (e.g., size dependent)Challenges (e.g., size dependent)
Demand-based PricingDemand-based Pricing
Cost Based Pricing E ample
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Cost Based Pricing Example:Activity Based Cost Management
Systems
An activity is a set of tasks that
combine to compose the processesneeded to create and deliver theservice
Managers need to move beyondseeing costs from just an accountingperspective to viewing them, morerelevantly, as an integral part of the
companys efforts to create value for
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Blueprint examplelueprint examplelueprint example
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Competition Based Pricing
Demand Based Pricing
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Demand Based Pricing:Airline example
51
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Service Pricing Strategies forService Pricing Strategies for
Four Customer Definitions of ValueFour Customer Definitions of Value
Pricing Strategies When the
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Pricing Strategies When theCustomer Defines Value as Low
Price
Pricing Strategies When the
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Pricing Strategies When theCustomer Defines Value as
Everything Wanted in a Service
Pricing Strategies When the
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Pricing Strategies When theCustomer Defines Value as
Quality for the Price Paid
r c ng ra eg es en e
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r c ng ra eg es en eCustomer Defines Value as Allthat Is Received for All that Is
Given
P tti St t i t
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Putting Strategy intoPractice
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