4

Service Promotion and

Distribution
 Chapter 4

Copyright © 2011 Dorling Kindersley (India) Pvt. Ltd.

Service Promotion and Distribution

Services Marketing: Text and Cases, 2e Author: Harsh Verma

 Introduction
• Promotion was once frowned upon: “good professionals
do not advertise because they don’t have to”

Copyright © 2011 Dorling Kindersley (India) Pvt. Ltd.

• Changing trends:

8 out of top 10 advertisers in US are from services

domain

McDonald’s, Burger King, Sears, Olive Garden…

• Communication: Important part of the marketing mix

• Growing relevance of social media

Services Marketing: Text and Cases, 2e Author: Harsh Verma

 Communication
Pre-purchase stage
• Two dimensions: Risk and uncertainty

Copyright © 2011 Dorling Kindersley (India) Pvt. Ltd.

• Consequences:
Financial
Performance
Social
Psychic

• Implications:
Provide information: Communication to mitigate risk and
uncertainty
Be part of consideration set: Communication
Target right consumers: Homogeneity of consumers
Focus on consumer expectations : Multi-attribute model

Services Marketing: Text and Cases, 2e Author: Harsh Verma

 Communication
Consumption stage
• Defining and communicating roles

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Consumer is active member of service process
Roles must be acceptable to service provider and
consumer
Roles must be effectively communicated

• Convey and clarify roles

To providers as well as consumers
Education needed for changing roles (manual to automatic
service)

• Encourage role-based performance

Encourage and reward consumers to stick to prescribed
roles

Services Marketing: Text and Cases, 2e Author: Harsh Verma

 Issues in Service Promotion
• Tangible clues
Unlike products, services rely on surrogate tangibles to allow
consumer to form an opinion about intangible service

Copyright © 2011 Dorling Kindersley (India) Pvt. Ltd.

• Word-of-mouth
Service purchase behaviour based on word-of-mouth advice
is difficult to manage and control

• Ownership
Services cannot be owned and hence alternate tools are
needed to show-off services being consumed

• Ties with customer

Consumers need to tie up with service providers and not the
sales team. Operations does the marketing and relationship
management.

Services Marketing: Text and Cases, 2e Author: Harsh Verma

 Guidelines
• Refrain from overpromising
• Advertise for employees

Copyright © 2011 Dorling Kindersley (India) Pvt. Ltd.

Internal advertising to motivate people to perform better
and live up to consumer expectations
• Encourage by word-of-mouth
• Tangibilize the service offer
• Make service understood
Translating the service experience into a message that
can be communicated to the customers
Pictorial language, imagery etc.
• Maintain continuity in communication to build strong
association

Services Marketing: Text and Cases, 2e Author: Harsh Verma

 Service Channels
Why intermediaries?
• Efficiency of transactions through decentralization

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• Flow of goods and services
Time, space, possession utilities
• Routine building
Standardization of ordering, evaluation, payment
• Search
Reducing search costs for consumers – for services
Reducing search costs for producers – for consumer needs
• Feasibility
Managing distribution

Services Marketing: Text and Cases, 2e Author: Harsh Verma

 Service Distribution

Copyright © 2011 Dorling Kindersley (India) Pvt. Ltd.

• Availability is critical for consumption

• Goods are storable and transportable

• Services cannot be pre-produced and stored

• Inseparable from provider

• Obstruction in adoption of goods-oriented approach

Services Marketing: Text and Cases, 2e Author: Harsh Verma

 Service Outputs

• Spatial convenience

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How easy is it to reach the product and service?

• Lot sizes
Flexibility in lot size of purchase depending on customer need

• Waiting time
Time between placing an order and receiving the service

• Assortment breadth
Variety available to customer

Services Marketing: Text and Cases, 2e Author: Harsh Verma

 Channel Options

Copyright © 2011 Dorling Kindersley (India) Pvt. Ltd.

Services Marketing: Text and Cases, 2e Author: Harsh Verma
 Service Distribution Strategy
Multi-site strategy
• Standardization of processes and services

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• Service consistency is essential for success
• Control of operations at all sites is imperative
• Careful analysis of environment is must before expansion
Multi-service strategy
• Growth through addition of services
• Leveraging equity of existing services to sell new ones
• Suited for firms competing on functional quality and
customized offerings
• Built on operational flexibility
• Identify what is core and what is peripheral to the service
offering
Contd…

Services Marketing: Text and Cases, 2e Author: Harsh Verma

 Service Distribution Strategy
Multi-segment strategy
• Services offered remain constant, the market segment

Copyright © 2011 Dorling Kindersley (India) Pvt. Ltd.

served varies
• Unrelated segments should not come into contact with
each other
• Constraints:
finding another segment that needs the same service
Modifying the service to cater to a different segment

Hybrid strategy
• In reality, firms use a combination of above three
strategies to achieve growth
• Ensure that no confusion is created in consumers’ minds
as to what is the service offerings of the firm

Services Marketing: Text and Cases, 2e Author: Harsh Verma

 Service Distribution Strategy
Franchising

Copyright © 2011 Dorling Kindersley (India) Pvt. Ltd.

• Advantages:
Growth opportunities
Minimization of financial risks
Local knowledge of consumers is gained

• Challenges:
Ensuring service quality
Ensuring image consistency
Franchisee motivation
Managing customer relationships

Services Marketing: Text and Cases, 2e Author: Harsh Verma

 Service Location
• Key decision for service providers

Copyright © 2011 Dorling Kindersley (India) Pvt. Ltd.

• Considerations:
Access
Visibility
Parking
Traffic congestion
Expansion opportunities
Surroundings
Competition
Regulatory aspects

Services Marketing: Text and Cases, 2e Author: Harsh Verma

 Franchising: Common Form of
Reaching to Customers
• Nirula’s

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• Dominos

• NIIT

• Lakme Parlours

• Dr Lal’s PathLabs

• Subhiksha

Services Marketing: Text and Cases, 2e Author: Harsh Verma

 Merits and Challenges of
Franchising
• Risk sharing

Copyright © 2011 Dorling Kindersley (India) Pvt. Ltd.

• Growth

• Knowledge gains
Image inconsistencies
Ownership of customer franchise
Motivation and control
Disputes

Services Marketing: Text and Cases, 2e Author: Harsh Verma

 Service Location

Copyright © 2011 Dorling Kindersley (India) Pvt. Ltd.

• Importance of location: Convenience considerations

• Preempting competition by location

• Location and demand management

• Location considerations: Access, visibility, parking,

expansion possibilities, regulatory considerations

Services Marketing: Text and Cases, 2e Author: Harsh Verma