SERVICE MANAGEMENT, T.Y.

BBA (SEM 5), VNSGU – SURAT

CHAPTER 5

SERVICE – PROMOTION

DEFINITION & MEANING

“PROMOTION / MARKETING COMMUNICATION is to communicate with individuals groups or

organizations to directly or indirectly facilitate exchanges by informing and persuading one or more
audiences to accept an organization’s products”.

In marketing, Promotion is communicating with the public in order to influence them towards buying
products /services. Communication has a very important place in marketing. Communication perform
the function of informing the target customer about the nature and type of the product and services,
their benefits, uses and features as well as the price and place at which those would be available in the
market.
Marketing communication tries to influence the behaviour of the consumer in favour of the company’s
offer. Hence, marketing communication is said to be persuasive. These persuasive communications are
commonly called "Promotion". From marketing point of view, Promotion is the communication used by
marketers to exchange persuasive messages and information between the firm and its customers and
general public.

ROLE OF MARKETING COMMUNICATION

With the growing competition in the market as well as the customers becoming better informed and
more choosy, it is important now that marketing communications of the right kind are made to the
right group of target buyers. The role of marketing communication is;

1. TO INFORM
The job of marketing is to identify consumer wants and then satisfy these wants with the right kind of
products, at the right place and at the right price. The purpose of promotion in the marketing function
is to convey to customers about the features of the product and how it will satisfy consumer wants or
any other relevant information needed by consumers to affect sales. For example, if a refrigerator
manufacturer is planning to offer off-season discount, it is essential to communicate to potential
customers about the extent of discount, period during which discount is available, name of the stores
where it is available etc. If all such information is not communicated to potential customers, lowering
of prices will not be beneficial to either the consumer or the manufacturer. Promotion is, thus, an
essential part of the marketing function as it is essentially communication.

2. TO PERSUADE
In any free enterprise system where firms develop and offer a wide range of new and better products,
there are full of messages and distractions of all sorts. Consumer often has to select the products
from among a wide range of competing products. As consumers do not have time and energy to
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compare the competing products physically, they turn to advertisements for product information. The
present business environment being highly competitive, each firm wants the customers to buy its
brand. Thus, persuasion is another goal of promotion. In other words, promotion is persuasive
communication.

3. TO REMIND
Consider a customer who regularly buys Colgate Toothpaste or Lux Soap. Do marketers of Colgate
Toothpaste or Lux Soap advertise to appeal to such customers? The answer is yes, because even the
most loyal customers must be reminded that t product has served them well over the years and about
the features that make the product attractive. This is more so in an environment where competitors
consistently attempt to attract the customers of competing brands with their own informative and
persuasive message. Thus, in addition to informing and persuading, another important purpose of
promotion is reminding customers. This is why even when the manufactures of well established
products like Colgate, Lux, Surf, Nescafe, Lifebuoy etc. also advertise quite extensively to sustain
customer’s preference for these products.

4. TO DIFFERENTIATE
Marketing communication aims to differentiate the services, especially when there is no differentiation
available. For example, there is not much differentiation possible in the banking services – where
Allahabad Bank, State Bank of Hyderabad and Union Bank are all advertising their education loan. They
all provide loans unto Rs 7.5 lakh(for studies in India) and Rs 15 lakh(for studies abroad), but Allahabad
bank focuses on a better career; State bank of Hyderabad focuses on the right support and Union Bank
talks about the good future, education, and the right bank to bank upon. Thus, with the help of
advertising, all these banks have tried to differentiate their products to appear as unique in the minds
of customers.

PROMOTION MIX / MARKETING COMMUNICATION MIX

1. ADVERTISING:
Definition: “Paid form of non-personal communication about an organization or its products
that is transmitted to a target audience through a mass/broadcast medium”.
It is done through non personal channels or media. Print advertisements, advertisements in
Television, Radio, Billboard, Brochures and Catalogues, Direct mails, In-store display, motion
pictures, emails, web pages, and posters are some of the examples of advertising. Paid
promotion and presentation of goods, services, ideas by a sponsor comes under the
advertisement.

Advantages
 Flexibility allows you to focus on a small, clearly defined segment,(e.g. children
magazine) or a mass market (e.g. national news channel)
 Cost efficient- reach to a large number of potential customers at a low cost per person
and allows the message to be repeated, and can improve public image.
 Allows for repeating the message and allows the buyer to receive and compare the
messages of various competitors.

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 Very expressive, allows for dramatization.

 Also used to build a long term image of a product.
 Often generates quick sales

Limitations
 Total cost can be very high
 Does not often provide quick feedback
 Less persuasive than personal selling
 Audience does not have to pay attention
 Indirect feedback (without interaction)

2. PERSONAL SELLING:
“Personal selling occurs through personal communication in an exchange situation”.
It is a process by which a person persuades the buyer to accept a product or convince the buyer
to take specific action through face to face contact. It uses oral presentation of products or
services. Target audience may very from product to product and situation to situation. In other
words personal selling is a person to person process by which the seller learns about the
prospective buyer's wants and seeks to satisfy them by making a sale. Examples: Sales
Meetings, sales presentations, sales training and incentive programs for channel members,
sales people, samples and telemarketing etc. It can be done face-to-face or through telephone
contact.

Advantages
 More specific communication aimed at one or more persons.
 Effective at building buyers preferences, convictions and actions.
 Cost per person is high, most expensive promotional tool.
 Greater impact on consumers
 Provides immediate feedback
 Allows marketers to adjust message quickly to improve communication.
 Buyer feels a great need to listen and respond.

Limitations
• Sales persons can not create exactly same messages to all the customers whom they meet.
• High cost
• Not effective in reaching all the customers.
• It may not be ethical sometimes.

3. PUBLIC RELATIONS/PUBLICITY:
Definition: “Publicity is news story about an organization or its products or both, through mass medium
such as newspaper or television etc at no charge”.
Publicity is a Non-personal stimulation of demand for a product, service or business unit by generating
commercially important news about it in published media or obtaining favourable presentation of it on
radio, television or any other mass media. It is not paid form of communication done by the
sponsor. Thus, publicity is news carried in the mass media about an organization, its products, policies,
actions, personnel etc. It can originate with the media or the marketer, and is published or broadcast
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at no charge for media space and time. Examples: Magazine and Newspaper articles/reports, radio
and television presentations, charitable contributions, speeches, issue advertising, and
seminars. Publicity can be favourable (positive) or unfavourable (Negative). The message is in the
hands of media and not controlled by the organization/firm.

Advantages
 Catches people attention off guard.
 Communication to large audience at a time
 More Credible than advertising.

Limitations
* Media must judge publicity to be news worthy, timely, interesting and accurate.
* Cannot control the content or timing
* May delete the most important part.

4. SALES PROMOTION:
Definition: “Materials that act as a direct inducement, offering added value, or incentive for the
product, to resellers, sales persons or consumers”
It is designed for immediate (short term) increase in product sales. It is any activity that offers an
incentive for a limited period to obtain a desired response from the target audience or intermediaries
which includes wholesalers and retailers. It stimulates consumer demand, market demand and
improves product availability. Examples: Contests, product samples, Coupons, sweepstakes, rebates,
tie-ins, self-liquidating premiums, trade shows, trade-ins, and exhibitions
Following are some of the methods by which sales promotion activities are done for customers;

Coupons: Coupons are given with the Product. e.g. - scratch and win.
Demonstrations: E.g.:- vehicles showrooms or ICICI given loans advertisements on roads.
Frequent user incentives: Major airlines companies provide benefits to those who use their airlines
frequently.
Pont of purchase display: It includes outside signs, window displays, display racks. 90% of retailers
believe that point of purchase materials sell products. It is essential for product introductions. Also
with 2/3 of purchasing decisions made in the store, they are important.
Free samples: It stimulates trial of product. Increase sales volume at the early stage of product life
cycle and obtain desirable distribution. This is the most expensive sales promotion technique.
Money refunds/rebates: Submit proof of purchase and mail specific refund, usually need multiple
purchase for refund. Helps promote trial use, due to the complexity of the refund, it has little impact.
Customers have a poor perception of rebate offered products.
Rs.-off offer: This is strong incentive for trying a product-very similar to coupons, but is a part of the
package.
Consumer contests: Consumers compete based on their analytical or creative skills. Must be accurate
or you will anger customers/retailers.

Advantages
• Easily measured response • Quick objective achievement
• Flexible • Can be cheap at times
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Limitations
• Brand image problem • Brand message not clear
• Short term advantage
• Stressful for retailers

5. PUBLIC RELATIONS
The marketing function that evaluates public attitudes identifies areas within the organization that the
public may be interested in, and executes a program of action to earn public understanding and
acceptance.
Following are some of the features of public relations;
 Communication is usually indirect and non-personal.
 Reaching large audience is very fast.
 E.g.: Press kits, Speeches, Seminars, Annual reports, Charitable donations, Sponsorship,
Company magazine.

MEDIA

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GENERAL GOVERNM
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SUPPLIER SHAREHO
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Advertising
• Building Credibility. • Building Awareness
• Holds down promotion Cost • Maintain a positive image
• Lead Generation • Educate the public about the company’s
• Ability to reach specific groups objectives
• Image building.

Disadvantages
• No or Very little Feedback • Lack of Co-ordination
• Conflicts with Marketing Department

6. DIRECT SELLING
It enables companies to reach out directly to consumers without intermediary channels such as
those required for advertising.
 It includes: Direct mail, catalogs, coupons and inserts, telemarketing, online marketing and
television infomercials.
 Example: Catalogs, Mailings, Tele marketing, Electronic marketing, TV shopping.
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Advantages
• Potential to earn unlimited amount of money.
• Initial Cost is fairly cheap
• Opportunities to meet new people.
• Email potential customers can create a marketing list easily.
• Can receive Customer views.

Disadvantages
• Time consuming Process
• Hard time to convince people which are expensive

7. WORD OF MOUTH
Word of mouth is an unpaid form of promotion in which satisfied customers tell other people how much
they like a business, product or service. Word-of-mouth is triggered when a customer experiences
something more than what was expected. Given below are some suggestions for stimulating a positive
word of mouth (apart from providing excellent service quality)
 Offering a gift, discount or other reward to customers who bring in new customers.
 Asking customers who express satisfaction, to tell their friends.
 Running a newsletter and asking customers to contribute. Contribution may be in terms of
letters, stories or ideas. This can also be done through website.
 � Reward your regular customers with some freebies.
 � Target opinion formers.

Advantages
 Customers are in control
 Great user’s experience.
 Web creates permanent Records.
 Happy customers refer others and business grows.
 Builds long-term customer relationship.

Disadvantages
• Time consuming Process.
• Negative word-of-mouth once spread brings customer dissatisfaction and business does not
grow.
• Hard core selling to benefit from increased commission is widely responsible for many potential
buyers being put off.

Following are few more Marketing Communication Mix:

• 1.Branding(Image and Reputation)
• 2.Merchandising(Point-of-sale)
• 3.Trade Fairs
• 4. Exhibitions.
• 5. Sponsorship

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INTEGRATED MARKETING COMMUNICATION (IMC)

DEFINITION & MEANING: According to the American Marketing Association, Integrated Marketing
Communications is “a planning process designed to assure that all brand contacts received by a
customer or prospect for a product, service, or organization are relevant to that person and consistent
over time.”

Integrated marketing communication is a broad marketing concept in which all communication tools
are integrated to generate maximum benefits. Each communication tool has its own unique
characteristics & costs. The tools that marketers commonly use to achieve their communication
objectives are:

ROLE / IMP /BENEFITS OF INTEGRATED MARKETING COMMUNICATION: The main advantages of the
integrated marketing communication are as follows:
1. Organisation can develop a strategic and comprehensive service marketing approach. For example,
an organisation can change its image from very high cost service provider to cost effective service
provider.
2. It helps in developing a consistent image of the organisation and delivers the message, which helps
in building the image of the organisation and the services. For example, an organisation can have the
reputation of being punctual for service delivery.
3. It provides the organization the ability to target different market segments for their services,
without changing their brand image. For example, organisation can concentrate on both youth and
children while marketing their services.
4. It is a cost effective approach as it integrates all the communication and branding approach in one
approach. For example, organisation can integrate the promotion and brand imaging in a single policy
and can implement them easily.
Marketers benefit from IMC due to following reasons;
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1) Improvements in customer attitudes and behaviors arising from improved and more consistent
experiences of brand value.
2) Increase in profitability from improvements in customer attitudes and behaviors.
3) More efficient (and effective) media choices help in better communication effect.
4) More efficient (and effective) business processes, creating higher added value.
5) Improvements in staff morale, work rate, cohesion and creativity.
6) Reduced employee replacement costs, employee cost/benefit gain and an improved employee
cost/customer value ratio.
Although Integrated Marketing Communications requires a lot of effort, it delivers many benefits. It
can create competitive advantage, boost sales and profits, while saving money, time and stress.

LEVELS OF IMC: Service marketing communication is applied at three levels as shown in the following
diagram
1. Internal Marketing Communication(between company and its employees)
2. External Marketing Communication(between company and customers)
3. Interactive Marketing Communication(between employees and customers)

INTERNAL MARKETING EXTERNAL MARKETING

Vertical Communications Advertising
Horizontal Communications Sales Promotion
Public Relations
Direct Marketing

INTERACTIVE MARKETING
Personal Selling
Customer Service Center
Service Encounters
Servicescapes
1. INTERNAL MARKETING COMMUNICATION: It works at two levels i.e. at the vertical level and
the horizontal level.
Vertical communication works from bottom to top and from top to bottom level of organization.
This means that the communication between the superior and the subordinate and vice-versa. This
channel of communication operates within the employees of an organization and hence it is
termed as Internal Marketing Communication.
Horizontal communication works at the same of level of organization. This means that the
communication between the employees of same rank is known as horizontal communication.
Different departmental heads communicate at this level.

2. EXTERNAL MARKETING COMMUNICATION: This is a common method of communication that

applies both for physical goods and services. Different tools used for external marketing
communication are advertising, sales promotion, personal selling, direct marketing, publicity,
public relations, internet marketing etc. Word of mouth communication is also an important
mode of communication that happens from consumers to other consumers.
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3. INTERACTIVE COMMUNICATION: The method of communication that works between the

service employees and the customers is known as interactive communication. It is a direct
mode of communication done by the service providers with the customers. Some of the modes
of communication which is interactive in nature are customer service centres, personal selling,
servicescapes, service encounters etc.

APPROACHES FOR INTEGRATED MARKETING COMMUNICATION: In Integrated marketing

communication, the goal of the service provider organisation is to deliver better services according to
the promises that it had made in its communication through advertisements and other promotion
mixes. In order to do this, the company has to manage the following four actions;
1. Manage Customer education: The following actions are necessary in order to manage customer
education;
a. Prepare customers before providing the services. For example, a doctor must mentally prepare
his patients for a surgery before going for a surgery or an operation.
b. Clarify the expectations after the service is provided. After the operation, a doctor must make
sure that the patients expectations do not get too high and understand the reality of the
situation.
c. Teach customers to avoid peak demand periods and try to find out slow demand periods. If
customers can visit the service provider during slow demand periods, then there are chances
that the service delivered will be as per the expectations of the customers. If the customer visits
during peak demand period then there are chances that the service will not be perceived by the
customers as per the expectations.

2. Manage customer expectation: The service provider may have to manage his offer as per the
expectations of the customers. The service provider should take the following actions in order to
manage the expectations of the customers;
a. The service provider must offer choices to the customers.
b. The service provider must offer different choices at different price-value relations
c. The service provider must clearly communicate the criteria of success to the customers before
delivering the service
d. If the customers have any unrealistic expectations from the service, then the service provider
must try to clarify this before the service is delivered.
3. Manage service promises:
a. The service provider must create an effective service communication.
b. the external communication like advertisements, direct marketing, publicity, public relations
etc must be co-ordinated
c. The service provider must make realistic promises.
d. The service providers must offer service guarantees to the customers.

4. Manage internal communication:

a. The service provider must create an effective vertical communication between the superior and
the subordinates within the organization
b. The service provider must also create an effective horizontal communication among the
employees at equal rank within the organization.
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