SERVICE BRANDS:The difference, Hard side of service selling, Solutions

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Brand Management (MKT624)

Lesson 42

SERVICE BRANDS

Introduction

The emphasis of this lecture is on the nature of service brands and application of brand

management concepts to them.

Service Brands

Service brands are finding out very fast similarities involved in the branding process with that

of tangible product brands. There is not much difference in developing a service product and

then leveraging it as a brand; may that be a banking product, insurance product, one by a car

rental company, or a courier service.

You develop brand picture, brand contract, create a position for it, and then communicate that

position from the standpoint of differentiation and segmentation. All service businesses are

getting convinced by one fact that they already are into a branding age and, therefore, having a

distinction and differentiation of their products with that of competition is the only way to keep

them different from the rest of the crowd.

With the exception of banking, insurance, and certain computer services, most of the businesses

are a combination of tangible products and intangible services. Even manufacturers provide

services like after-sales etc. Taking a look at restaurants, car rentals, airline tickets, and other

travel services explains the phenomenon. There is a physical product that you use or come into

contact with because that is what you pay for; the rest is service.

We, however, are dealing with the service element that is intangible and want to see what is it

that should be done to brand that element.

The difference

There are four elements that really set services apart from other tangible products. Those are:

· Intangibility: You cannot see a service. It cannot be felt and touched.

· Perish ability: You cannot store services like inventory items. Seats not sold are lost

for ever.

· Inseparability: You cannot separate a service from a product. Service is sold right at

the time of delivery. Service therefore is the product.

· Variability: Services are offered by people who vary in temperament, behavior, and

values. The same service offered at a different time or place can vary from the other.

The above elements imply that:

1. Marketing and operational areas in a service firm are more closely intertwined than

they are in a manufacturing concern restaurants and banks are perfect examples.

2. The core values of a brand must be understood by all through internal marketing to

be able to build the brand on a consistent basis.

For both implications, the staff or people responsible for delivery have to know what they

are delivering. However, there are certain problems with service selling, which make it a

hard area of selling:

Hard side of service selling

1. Services can be copied easily: Because of this factor, businesses find it very hard as to

how to differentiate. You will agree that differentiation through different physical

features is easy to demonstrate than through something that does not have tangible

features.

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2. Services are hard to summarize and communicate: Expressing the core of a service

brand is a lot more difficult than that of a tangible product brand. Tangible products can

be shown and explained, whereas the intangibility of service products does not offer this

ease to itself.

It is because of the difficulty of expression that service brands generally have slogans.

The attempt is made to communicate the inner core of the brand through an outward

expression. The expression may be very appropriate and may not be in certain cases. It

is a real challenge! "We serve with a smile" and "This is where you feel secure" are

examples of slogans.

3. Quality is hard to evaluate: Services cannot be laid side by side like products sit on the

retail shelves. This offers the difficulty of comparison for buyers and communication

for sellers. It also offers buyers the problem of not being able to judge the value for their

money. This further leads to pricing problem on part of the sellers.

4. Standardization is difficult: Because of the involvement of the human factor,

standardization into routines and procedures becomes difficult while you sell services.

The paradox comes to the surface while a service is delivered by a highly motivated

person who is also empowered.

The moment you prescribe procedures that seem to carry away or diminish

empowerment, it affects the level of motivation of that person and, hence, the quality of

service. Imposition of controls therefore brings in the conflict between motivation and

empowerment and that breeds contradiction1.

5. No inventories: Unlike tangible products that can be stored in view of fluctuating

demand for different seasons; services cannot be stored.

Lack of responsiveness to customers during peak times is a renowned problem that

must be faced and handled by services. Examples are utility bill deposits at banks and

long queues at retail stores during EID shopping. Service sellers have to either hire

extra staff or do something more ingenious to cope with such situations.

Solutions

In order to overcome these problems, we have to look at the ways and means toward brand

building of service products. Why do two couriers offering overnight delivery service

anywhere in the country charge differently? In our national market, the strongest brand (TCS)

charges about 20-25% more as compared to many of its competitors. The one charging more is

definitely a strong brand.

This exemplifies that problems are solvable and there are tools and techniques to the problems.

1. Capitalize on additional elements: It is not that the service setup is full of handicaps. It

also has some extra elements which if exploited sensibly add value to the brand and can

leverage it to phenomenal heights.

Apart from the "four Ps" of marketing mix, the three additional elements of service

brands are people, process, and physical evidence. Well trained people are the real

assets of the company. Take the example of the courier company that you think is the

largest in the country - TCS. It is the people who have made it what it is. Through their

service, they have assured the target market of delivery of the product's contract. That

testifies perfect handling of the service they sell.

If people in that company are so well trained and deliver perfectly, then that must owe

to what the management has turned into a well structured process. It is the meshing of

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the two elements in a way that the paradox of empowerment and motivation is also

taken care of.

Another example is airlines giving personalized service to their passengers in terms of

food of their choice. If passengers have a strong perception that this airline will not

breach the contract and deliver on the promise, it is a test that the airline is using its

people and the process to its best.

The airline is able to do that because of having a process backed by contemporary

technology. This not only strengthens its data bank of passengers, but also highlights

their socio-cultural background, a piece of information that leverages brand-building

efforts.

Getting back to the example of the courier TCS, we must take a look at the physical

evidence that that company has in the form of their collection points (offices).

Remember, in services, pure or hybrid, the physical evidence carries weight of

unlimited proportions.

An appearance of the office, the staff, and other manifestations of standardized nature

enhance the image in your eyes of the brand. It is that appearance in evidence with

which you and I develop emotional relationships.

Think of a fast food company just delivering out of its kitchen food at your doorstep

versus another company doing the same but also having restaurants here and there. You

will definitely develop emotional ties with the latter which has its presence through

physical evidence also.

The need to be savvy at the décor and other elements of the physical existence takes on

very important dimensions.

2. Innovate continuously: Since services can be copied easily with not as great an

investment as that in a manufacturing concern, the only options but very credible ones

are that you:

· Maintain differentiation of delivery (in cases like fast food and courier service)

· Carry out continuous innovation of products to stay ahead of competition (in cases

of banking and insurance consumer products and travel and logistical services)

Toward brand-building effort, companies have got to invest into human resource that

can give practical shape to both the options.

In order to achieve that, brand managers should approach the effort in just about the

same way as they would for tangible products. A brand-based customer model should

be developed.

3. Improve distribution: Just like in case of tangible products, the markets of services also

require effective distribution and outreach. Just look at the banking industry. To be able

to penetrate the markets, they have to have meaningful presence in all areas. The more

the areas covered, the higher the sales. Today's consumer banking is very customer-

centric and product models are customer-based. From personal credits to credit cards to

deposits to car financing and the like, banks are into a real marketing mode. Their

mission is all about fulfilling customer needs. Needs have a better chance to be fulfilled

if services are sold closer to points of customers' preference. Any bank with thin

presence should not hope for a big share of the market.

Insurance industry in our country is not as developed as banks, because it has not paid

due attention to the retail side of business. It has been focused on big accounts, that is,

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industries and other big businesses. The retail side has as much potential as the

corporate side carries. The answer lies in prioritizing their strategic moves.

4. Make the brand tangible: The effort should be towards making the service tangible.

This can be done by keeping the premises through which the service is delivered very

standardized having a striking uniqueness. This is very closely related to the physical

evidence phenomenon as well as communicating your position.

The attributes of service can be summed up on positioning. You can see that in

advertising campaigns of airlines through which the businesses attempt to highlight

their positioning of hospitality. The element of tangibility along with the summing up of

the main attribute on positioning differentiates the brand and stimulates sales.

5. Use testimonials: Those services that cannot be easily summed up on positioning

unlike showing an umbrella for an insurance product or hospitality reflected by an

airline's airhostess should be communicated with the help of testimonials, that is, a

celebrity talking about the benefits the service provides. Nothing gives credibility to

service benefits more than having a celebrity endorsing the company's claim.

It goes without saying that the claim has got to be very consistent with positioning and

the brand contract. Endorsement works best when the promise is perceived deliverable.

6. Develop a continuing relationship: The importance of this factor takes on added

importance when it comes to selling services. In most of the cases of service selling, the

data about customers is maintained and updated. This is an advantage that service

selling offers businesses. What is an imperative becomes easy to maintain. Customers

have got to be cultivated. A continuous touch with them enables the company

o To communicate any new product developments and quality initiatives.

o To measure brand dynamics on different dimensions that tell you the

return on brand investment.

o To maintain customer loyalty toward your brand.

7. Manage consumers: This refers to improving the process to preempt any negative

situations that arise out of fluctuating demand in service. Supermarkets and general

stores have to keep an allowance for serving their customers efficiently during high

sales periods. The inability to do so turns the positive situation into a negative one.

8. Industrialize the service: This boils down to setting overall systems and procedures and

their implementation at every point of sale that you have. You must control all the

variables by way of standardizing them and then training people to handle those in a

very consistent and mechanical way. A consistent output according to standard

operating procedures "SOPs" guarantees quality service. Examples are fast food

restaurants and courier services. McDonald's is a classical example of industrializing

the service. A burger is made in exactly the same way and in as much the time in

Karachi as it takes in Kuala Lumpur.

Standard procedures ensure a balance between motivation and empowerment.

9. Select and train staff carefully: To be able to recruit and then train staff according to the

mission of the company and the vision of the brand is a hard task. Once recruited, the

staff members must gain full understanding of the service they are to deliver. This

understanding calls for complete desire, honest intention, passionate inspiration, and

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engagement in terms of delivering the service. Major airlines are an example of this

phenomenon.

There are companies that offer incentives not on improved sales, but on feedback of

improved service. Such a feedback is possible only if the company has a mechanism to

gauge the brand dynamics, i.e. have the models in place to measure the service or brand

performance on different strategic dimensions. Such measures tell you customer

satisfaction and their loyalty.

Summary

Branding is penetrating the service selling areas very fast. Service businesses have a growing

realization on their part of the importance of brand management. The principles are no different

when it comes to leveraging a service brand. Managers, however, have to be sensitive to the

additional elements of people, processes, and physical evidence to make their services

distinctive and differentiated. These elements offer opportunities to compensate for the inherent

drawbacks in service selling. If capitalized in a sensible way, these elements lay the foundation

for real leveraging of the brand.

Suggested readings:

1. Geoffrey Randall: "Branding A Practical Guide to Planning Your Strategy", Kogan

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