Marketing Strategy
in Service Business
- amegaro@unisa.it -
Programme
• Marketing and Service Marketing: an overview
• Marketing plan
• New marketing strategies approaches: Relationship Marketing
and Many-to-Many network; Experience marketing; Nonconventional
marketing
• New marketing vision: Service Research - from S-D logic &
Service Science to service ecosystems & service systems
Case studies
Examples
Project work
Agenda: Lesson 3
• New approaches: Relationship Marketing and Many-toMany
network; Experience marketing; Non-conventional
marketing
Examples
From Traditional Marketing to
Relationship Marketing
3.2
From
Traditional Marketing
to
Relationship Marketing
O Q
O Q
From traditional to Relationship
Marketing
A New Perspective of Marketing
Relationship marketing involves a change in managing the
relationship with customers and other stakeholders.
This change involves the adoption of a collaborative logic,
in the management of a business and in managing the
relationships with other actors.
... to strategic
relationships
From
exchange…
From traditional to Relationship
Marketing
The exchange approach implies that the companies involved in
the transaction are oriented to exclusively maximize subjective
value.
operator
“A”
operator
“B”
TransactionSearch for the subjective maximization of
the value generated by the transaction.
From traditional to Relationship
Marketing
The Relational Approach implies that companies involved in
strategic relationships are oriented to create and share new
value.
operator
“A”
operator
“B”
RelationshipContribution to maximize total value of
the relationship.
From traditional to Relationship
Marketing
Relationship Marketing
3.1
The rational reasons why a new way of marketing is born
can be found in the relationship with the target audience.
Relationship marketing: origins
Relationship marketing: example of
prosumer
Relationship marketing: example of
prosumer
Customer
CUSTOMERS
ORIENTATION
After 1960...
Relational
Marketing (RM)
Customer
Relationship
Management
(CRM)
ProviderCustomer
The focus is on
the relationships
between two key
actors
After 1990...
Customers
Providers
Many-to-many
approach
After 2000...
Customers as the
pivot, the focus
of attention in
the market
Network
orientation
Focus on multilevelled
networks
of actors/
stakeholders
Relationship marketing: origins
Relationship Marketing
PASSIVE
Marketing
ACTIVE
Marketing
Marketing
=
Selling
Relationship
Marketing
Aim: to increase the value of relationships with customers
through the enhancement of users’ loyalty
Definition: Creation, development, maintenance and
optimization of relationships between customers and
organizations
Selection and analysis of specific targets (not anymore broad
segments) to reduce the asymmetry between the company and
every single user through multi-channel strategies: from classic
media (telephone/ print) to web communication
Bidirectional relationships and increased knowledge of users
Relationship Marketing
Relationship Marketing: a new mindset
Shfit to a collaborative approach to
relationships that pursues total value
maximization and subjective value
maximization to improve:
- Synergistic relationships and involvement
in the value creation;
- Long term partnerships that contribute to
system’s well-being.
A change in the managerial approach to relationships with
users and stakeholder is needed
Identification of strategies to establish durable relationships
consumers-brands
THROUGH the involvement of target users in long term
programmes that provide immediate benefits and sense of
belonging to brand
Relationship Marketing
ONE-TO-ONE: direct relations between
consumers- companies and brand-targets
ONE-TO-ONE RELATIONSHIPS
• New technologies, social networks and IT systems contribute
to engage customers in business decision- making
• Personalization of relationships with users, seen as unique
individual entities with specific needs.
• Customers become partners of organizations and contribute to
the design of value proposition for themselves, for the
organizations, for other customers
• Development and creation of relationships based on
interactivity, connection and mutual learning
Personalizing Relationships
Personalizing Relationships
• Creation of different targets with different needs for
different actions and service offering;
• Knowledge on users’ requirements, needs and tastes;
• Bidirectional communication.
To optimize relationships, personalized strategies are needed
• Marketing mix – Personalizing product
Product operational decisions concern attributes such as
packaging, brand, materials
Personalizing Relationships
"Share a Coca-Cola" vs "Nutella is you“
Divergence of intent between the two brands: while the first - starting from
the person who buys the drink - wants to involve other people, meaning the
buyer as a sort of donor, the second stops with those who buy Nutella who,
therefore, do not donate and he does not share, but keeps it for himself.
Coca-Cola's choice could be defined as “social”.
Nutella's choice as “individual”.
Both, therefore, try to release a viral-emotional contamination, taking however
- different paths at some point.
• Marketing mix – Personalizing product
Personalizing Relationships
Personalizing Relationships
• Marketing mix – Personalizing price
Customizing the price means setting different prices for each
customer, also possible thanks to Internet:
• different prices depending on the quantity (eg. Reduction
of shipping costs based on volumes of sales)
• group prices: different prices for each group of customers
with homogeneous characteristics (no shipping costs for
Amazon Prime subscribers)
Personalizing Relationships
Pizza Hut Table
https://www.youtube.com/watch?v=xvT0MCugb58
• Marketing mix – Personalizing place
Personalizing Relationships
Pizza Hut proposes this concept to indicate how ordering a pizza
could become an experience in the near future.
The concept is a restaurant table with multi-touch technology
that allows you to customize, order and pay for the pizza you
want with a few simple touches on your smartphone.
You can pay by simply placing your smartphone on the table
thanks to the next NFC technology and wait for the order,
perhaps while we are playing on the table which in the meantime
has transformed into the mega second screen of your
smartphone.
The new pizza experience is served.
Special birthday promotions
A clear communication plan
must be created, because
loyalty is a transversal process
in which it is necessary to
know and be known.
• Marketing mix – Personalizing promotion
Personalizing Relationships
Everyone is much more than a customer
Life stage defines a person’s major
concern
Customer Lifetime value
Customer Relationship Management
The sharing of a common language: that can enhance knowledge
sharing and the exchange of information that increase marketing
collaboration and the creation of a cohesive set of value
Relationship Marketing
Relationships can be developed over time through:
A coherent culture: based on common trust and shared purposes
that allow at reducing uncertainty and opportunistic behaviors of
partners
To retain customers (and obtain loyalty) is better than acquire
new ones with the reduction of service quality
The aim of relationship marketing is to establish, strengthen and
renewover time stable and durable relationships with customers
to create and regenerate constantly the production of mutual
benefits
Relationship Marketing
Total Relationship Marketing
3.3
Many-to-many Marketing
Many-to-many marketing is an expression that describes and
analyses the network aspect of marketing.
Fonte: Valdani E., Busacca B., Micro & Macro Marketing, 3/95.
one-to-one
© E. Gummesson 2003 many-to-many
Customer
Relationship
Management (CRM)
The customersupplier
relationship
in focus:
one-to-one
© E. Gummesson 2003
Marketing as
Networks All
stakeholders in focus:
many-to-many
Customer
Relationship
Management (CRM)
The customersupplier
relationship
in focus:
Marketing as
Networks All
stakeholders in focus:
Some terms have been used to describe the voluntary links
between firms and other economic entities, including network,
"heterarchy" and "polycentric structure".
However, the term "network" is now generally accepted to describe
this emerging economic entity.
The networks originate from the desire of different actors to be
involved in a common process to enhance resources, skills and
synergistic activities.
Relationships exist if there is a network (in theory even composed
only of the elementary link between two nodes), which in turn
takes shape through the organization of the relationships between
the nodes.
Network
These networks embed suppliers, partners, practitioners, individuals,
banks, government agencies, operators and all those subjects who
cannot be considered separately in their operational context, but
must be involved in systems from which to benefit from
collaboration, roles, rules and strategies.
Network theory attempts to analyze the phenomena of sharing
resources and objectives, in terms of organizational constructs including
“nodes”, “links”, “aggregation forces”, “central control”,
“dynamic equilibrium” and “structural variability”, used to explain
the multiple contributions to value creation within the observed
systems.
Network
RESOURCES - WHY?
• Recurrent in our literature
• Useful in practice (limited)
Resource integration in S-D Logic
Resources are not inherently “ valuable, ” but become more or less
valuable depending on the context of their integration
(Chandler and Vargo, 2011).
Resources are not, they become
(Zimmerman, 1951; Vargo & Lusch, 2014 )
RelationshipTime CapabilitiesInformation
What is a Network?
Endless definitions!
Between these:
"a specific set of links between a specific set of
actors with the additional property that the
characteristics of these links as a whole can be
used to interpret the social behavior of the
observed actor"
Network Analysis principles
• Actors (and their actions) are seen as interdependent,
rather than autonomous and independent units;
• the relational links between actors are channels for the
transfer and/or flow of resources (tangible or intangible);
• network-based models see the environment surrounding
the network structure as a source of opportunities and
constraints on the action of the actors (nodes) taken
individually;
• such models conceptualize a structure (social, economic,
political, etc.) as a stable network of links between
actors.
Network Analysis principles
• Actors linked with others through social ties
• A bond establishes a correlation between at least one
pair of actors
• There is a transfer of resources (tangible / intangible:
information, transactions, skills, services, etc.)
• Behavioral interaction: an interaction emerges from the
relationship!
• Sometimes they are formal bonds (authority)
• Sometimes they are informal, but based on strong
attractiveness (weak ties such as: esteem, generosity,
power, interest, friendship, etc.)
Each Network is characterized by:
1. Presence of heterogeneous actors (nodes);
2. Relations (connections) between various elements (static
condition, concerning the structure);
3. Common goal (equality);
4. Sharing of resources;
5. Existence of a government (be it centralized or
widespread);
6. Willingness to define rules, principles, limits and
boundaries;
7. Interactions between subjects inside and outside the
Network (dynamic condition, concerning the system);
8. Sustainability orientation (long-term survival).
These networks involve supplier and customer networks with
dense and intricate connections, and are win-win based.
The network view of decision making imply that many
contributing actors more or less consciously support value
creation processes, thus also supporting business
competitiveness.
System relationships lead business actors to a necessary
mutual satisfaction for diffuse value creation and
competitiveness.
Network theories
Istitutions
(LocalGovernment)
Detailers
(Theme Parks, Cultural Heritage Business,
Public dealers)
Partners
(consortia, trade associations)
Customers
(Turists)
Destination
Governance
Destination Service Eco-System
More win-win
interactions, more
value
Network
Value generation and Networks
Fonte: Valdani E., Busacca B., Micro & Macro Marketing, 3/95.
From relational and systemic point of view,
competitive behaviour today seems to be based no
longer upon dyadic relationships between actors,
but rather upon a many-to-many relational and
system pattern daily involving supplier and customer
networks with dense and intricate connections, winwin
based.
Many-to-many Marketing
A hospital is represented by its own interface (the
administrative counter or the laboratory technician, or
the specialist doctor), but all of these actors are part of
a much wider relational network in which there are:
doctors, nurses/health workers, auxiliary staff,
administrative staff, electromedical equipment
suppliers, diagnostic equipment suppliers, other
generic suppliers of the Diagnostic Center, etc.
The Patient, on the other hand, is embedded in a
relational network composed by himself and his
family, the general practitioner, the specialist doctor,
the pharmacy, etc.
Relationship
between an
hospital and
the patients.
Many-to-many Marketing
Example: Healthcare
The health system is composed by a complex network of actors who,
in various ways, are configured as useful resources for the system
itself.
Institutional actors (ASL, hospitals, etc.), national and territorial
entities (Regions, Municipalities, etc.), organizations (scientific
societies, trade unions) and, last but not least, people (citizens,
patients..) are all subjects which must necessarily participate in the
efficiency and effectiveness of the service and therefore in the overall
performance of the system.
Many-to-many Marketing
Example: Healthcare
Many-to-many Marketing
Example: Healthcare
Many-to-many Marketing
Example: Healthcare
Actors 'Information' interests and resource integration potentialities
Patients inform promptly and in detail about their needs and conditions
Doctor acquire in time the latest updates on care, administrative procedures,
diagnostic and prevention processes
Pharmaceutical company understand what the real needs of the market are and / or propose
reliable and quality solutions to customers
Hospitals offer the right spaces and adequate professionalism to guarantee a high
standard of quality to its users
Universities acquire the evolution of needs from the healthcare context and
consequently plan the various training courses
Ministry of health define and sponsor practicable, accessible and strategic operational
lines
Government encourage the integration of the communication system, through the
unification of databases, the simplification of application and payment
procedures, the wide dissemination of information on loans, etc.
Pharmacies, clinics,
laboratories, diagnostic
centers and general
practitioners
Promptly communicate with both territorial and national
pharmaceutical distributors and warehouses; try to network (especially
locally)
Gummesson: has proposed a marketing based on interactions between
related actors in networks focusing:
• On relations – the existance of a relation is perceivable in case two
or more parts are in contact; usually B2C relations represent the
classic relation betweeen business and customer;
• On interactions - interactions correspond to activated relations
capable of representing a contact;
• And on networks – a set of relations can identify a network,
sometime this network can be very complex.
Relations can be identified as lens capable of supporting the decision
maker in understanding what is going on, supporting wise decisions.
Total Relationship Marketing
The introduction of this new philosophy facilitates
the synergic development of the value generation
and the definition of long-term relationships useful
to the growth of the system (producer-customerretailer-[..])
intended as a whole.
Classic market relationships:
R. 1. Supplier and customer
R. 2. The customer - supplier - competitor
R. 3. Network - distribution channels
Total Relationship Marketing
Gummesson’s 30 Relationships
Special market relationships
R. 4. Full-time marketers and part-time marketers
R. 5. Customer and service provider
R. 6. Many-headed customer and many-headed supplier
R. 7. Relationship to the customer's customer
R. 8. Close and distant relationship
R. 9. Not satisfied customer
R. 10. Monopoly relationship: customer or supplier as prisoner
Total Relationship Marketing
Gummesson’s 30 Relationships
Special market relationships
R. 11. Customer as "member"
R. 12. E-relationship
R. 13. Parasocial relationships, with symbols and objects (as the
brand)
R. 14. Noncommercial relationship
R. 15. The green relationship
R. 16. The law-based relationship
R. 17. The criminal network
Total Relationship Marketing
Gummesson’s 30 Relationships
Mega relationships
R. 18. Personal and social networks
R. 19. Mega marketing - the real "customer" is not always
found in the marketplace
R. 20. Alliances change the market mechanism
R. 21. The knowledge relationship
R. 22. Mega alliances change the basic conditions for
marketing
R. 23. Mass media relationship
Total Relationship Marketing
Gummesson’s 30 Relationships
Nano relationships
R. 24. Market mechanisms are brought inside the company
R. 25. Internal customer relationships
R. 26. Quality providing a relationship between operations
management and marketing
R. 27. Internal marketing - relationships with the employee
market
R. 28. Two-dimensional matrix relationship
R. 29. Relationship to external providers of marketing services
R. 30. Owner and financier relationship
Total Relationship Marketing
Gummesson’s 30 Relationships
in sum…
(if you look for wise decisions
to plan a marketing strategy)
put on your nose
the network eyeglasses!
Total Relationship Marketing
Experience Marketing
3.4
• Experiences can turn the moment of consumption into a
memorable event
• Experiential reframing of the processes of delivery and brand
management
Marketing as experience
The «traditional» marketing strategies (STP- segmentation,
positioning and targeting) and tactics (the 4 Ps) are reread
the lens of experience which permeates service with a
totalizing experience
Mehrabian and Russell, 1974; Pine and Gilmore, 1998;
Schmitt, 1999; Addis, 2007
THROUGH
Marketing as experience
Experiential or sensory marketing starts from an assumption that each of us is driven to
purchase by a mix of conscious and unconscious components. While the former are more
easily analyzed because they are linked to the rational sphere, the latter are more hidden but
exert a strong influence on many of our habitual behaviors.
Consider that the word "know", synonym of knowing (and knowledge is often the basis of
every decision, therefore also of a purchase), has its roots in the physical experience of tasting.
Marketing as experience
“Today, customers take functional features and
benefits, product quality and a positive brand image
as a given. Products, communications and marketing
campaigns should “dazzle” their senses, touch their
hearts, and stimulate their minds.
They want products, communications, and campaigns
that they can relate to and that they can incorporate
into their lifestyles” (p. 57)
“ To provide customers with engaging and
attractive experiences can allow companies at
gaining the edge over competitors, in a way that
the “simple“ satisfaction cannot guarantee»
Schmitt (1999), Experience Marketing
Schmitt’s Model (1999)
Creation of experiences for the mind that stimulate
intellectual, creative and problem- solving capabilities
The first «level» that builds the sensorial experiences by
using the 5 senses (taste, smell, touch, hearing and sight)
Emotional experiences related to the brand that evoke and
recall emotions and customers’ internal feelings
Impact on corporeal experiences, lifestyles, interactions
Connection of individuals with themselves, other
individuals and culture. This level all-encompasses the
features of the other levels.
Sense
Think
Feel
Relate
Act
Evergreen brand which symbolizes the american way of
life
The company turned a drink into a state of mind, a status
symbol, a cult product for youngsters worldwide
The brand embodies the value of friendship, fun,
happiness
Coca Cola
Marketing as experience
https://www.youtube.com/watch?v=BbgrHnbgoDU
Marketing as experience
https://www.youtube.com/results?search_query=SPRITE+SHOWER
Non-conventional Marketing
3.5
Set of marketing strategies and tactics aimed at:
• Generating emotions
• Memorability (awareness)
• Uniqueness
• Create surprise
• Involve recipients (engagement)
Non-conventional marketing
Guerriglia marketing (from spanish) is the definition coined by the
American advertising Jay Conrad Levinson in 1984 in his book of the
same name, to indicate a form of non-conventional and low-cost
advertising promotion obtained through the creative use of aggressive
means and tools that leverage the imaginary and feelings in end users.
• Unpredictability
• Originality
• Strong psychological approach
• Subversion of the pre-established order
• Be everywhere and anyway
Guerrilla Marketing principles
Antonietta Megaro
amegaro@unisa.it
THANK YOU.
Questions? Comments?