1. Slide ©2004 by Christopher Lovelock and Jochen Wirtz Services Marketing 5/E 5 - 1 Chapter 5 Designing the Communications Mix for Services

2. Slide ©2004 by Christopher Lovelock and Jochen Wirtz Services Marketing 5/E 5 - 2 Advertising Implications for Overcoming Intangibility (Fig. 5-1) Physical Representation Advertising Strategy  System DocnDocument physical system capacity  Performance DocnCite past performance statistics  Service-Performance EpisodePresent actual service delivery incident  Consumption DocnPresent customer testimonials  Reputation DocnCite independently audited performance  Service-Consumption DocnDisplay typical customers benefiting  Service-Process DocnDocumentary of step-by-step process,  Case-history episodeCase history of what firm did for customer  Service-ConsumptionNarration of customer’s subjective experience Source: Mittal and Baker

3. Slide ©2004 by Christopher Lovelock and Jochen Wirtz Services Marketing 5/E 5 - 3 Other Communications Challenges in Services Marketing  Facilitate customer involvement in production  prepare customers for service experience and demonstrate roles  teach customers about new technologies, new features  Help customers to evaluate service offerings  provide tangible or statistical clues to service performance  highlight quality of equipment and facilities  emphasize employee qualifications, experience, professionalism  Simulate or dampen demand to match capacity  provide information about timing of peak, off-peak periods  offer promotions to stimulate off-peak demand  Promote contribution of service personnel  help customers understand service encounter  highlight expertise and commitment of backstage personnel

4. Slide ©2004 by Christopher Lovelock and Jochen Wirtz Services Marketing 5/E 5 - 4 Setting Clear Objectives: Checklist for Marketing Communications Planning (“5 Ws”)  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 communications need to take place?

5. Slide ©2004 by Christopher Lovelock and Jochen Wirtz Services Marketing 5/E 5 - 5 Common Educational and Promotional Objectives in Service Settings (Table 5-2)  Create memorable images of specific companies and their brands  Build awareness/interest for unfamiliar service/brand  Build preference by communicating brand strengths and benefits  Compare service with competitors’ offerings and counter their claims  Reposition service relative to competition  Stimulate demand in off-peak and discourage during peak

6. Slide ©2004 by Christopher Lovelock and Jochen Wirtz Services Marketing 5/E 5 - 6 Educational and Promotional Objectives (cont.)  Encourage trial by offering promotional incentives  Reduce uncertainty/perceived risk by providing useful info and advice  Provide reassurance (e.g., promote service guarantees)  Familiarize customers with service processes before use  Teach customers how to use a service to best advantage  Recognize and reward valued customers and employees

7. Slide ©2004 by Christopher Lovelock and Jochen Wirtz Services Marketing 5/E 5 - 7 Word-of-mouth (other customers) Marketing Communications Mix for Services (Fig. 10.4) Personal Communications Selling Customer service Training Advertising Broadcast Print Internet Outdoor Direct mail Sales Promotion Sampling Coupons Sign-up rebates Gifts Prize promotions Publicity & Public Relations Press releases/kits Press conferences Special events Sponsorship Instructional Materials Web sites Manuals Brochures Video- audiocassettes Software CD-ROM Voice mail Signage Interior decor Vehicles Equipment Stationery Uniforms Corporate Design Telemarketing Word of mouth Trade Shows, Exhibitions Media-initiated coverage * Key: * Denotes communications originating from outside the organization

8. Slide ©2004 by Christopher Lovelock and Jochen Wirtz Services Marketing 5/E 5 - 8 Originating Sources of Messages Received by a Target Audience (Fig. 5-5) Messages originating within the organization Messages originating outside the organization Production Channels Marketing Channels Front-line staff Service outlets Advertising Sales promotions Direct marketing Personal selling Public relations Word of mouth Media editorial A U D I E N C E

9. Slide ©2004 by Christopher Lovelock and Jochen Wirtz Services Marketing 5/E 5 - 9 What is Brand Equity and Why Does It Matter? (From Berry, “Cultivating Brand Equity”) Definition: A set of assets and liabilities linked to a brand’s name and symbol that adds to (or subtracts from) the perceived value of the product Insights  Brand equity can be positive or negative  Positive brand equity creates marketing advantage for firm plus value for customer  Perceived value generates preference and loyalty  Management of brand equity involves investment to create and enhance assets, remove liabilities

10. Slide ©2004 by Christopher Lovelock and Jochen Wirtz Services Marketing 5/E 5 - 10 A Service Branding Model: How Communications + Experience Create Brand Equity Firm’s Presented Brand (Sales, Advertising, PR) What Media, Intermediaries, Word-of-Mouth Say re: Firm Customer’s Experience with Firm Awareness of Firm’s Brand Meaning Attached To Firm’s Brand Firm’s Brand Equity Source: Adapted from L. L. Berry ( Fig. 1) Marketer-controlled communications Uncontrolled brand communications