Managing Service Brands

Some of the world's strongest brands are services—consider financial service leaders such as Citibank, American Express, J I' Morgan, I ISfiC, and Goldman Sachs, Several hospitals have attained ' megabrand- reputations for being the best in their Held, such as the Mayo Clinic,

Massachusetts Gijperal, and Sloan-Kettering- These hospitals could open clinics in other cities and attract patients on the strength of theft brand reputation. As with any brand, service brands must be skillful ai differentiating themselves and developing appropriate brand strategies.

Differentiating Services

Servicc marketers frequently complain about the difficulty of differentiating their services. The deregulation of several major servicc industries—communications, transportation, energy, banking—lifts resulted in intense price com petit ion. To the extent that customers view a service as fairly homogeneous, ihey care less about the provider than the price.

progressive corp.

Ranked ntirn ber or,e -n BusinessWeeKv Top 50 Performers for £004, Progressive shows now a service company on Stand out from the pack hy constantly asking—and answemjt—the qtiestion.' Is there an even better way?" Auto insurers have never been known as a customei-fnendry ijunch. but Progressive used this dismal history 10 its advantage. From its start in Ihe 1990s. the compiny gained notice lot ollering prospective customers price qtKJtes tram up to Ihre? rival insurers, as well as ils own. Ting move gamed it thousands ol new accounts. Then, once Prog'ess've won new customers' business. it mobilized an army of 12,000 claims adjusters who speed right to an accident scene—and often cet a check ngtil on the spot, lis latest new service is one that lets drivers involved i n a smal I acci -deni drop off their banged- up car, pick up a renlal—and then come Jjack to a fully re pai red car a couple ol days later. Ait of inese nontradilkonal moves have paid oil big time: Wn iie omers in Ihe industry are just coming out of a si ump,

■ Progressive S ptefils have soared an average annual 1B3 percent over the past If; ree years lo SI .3 billion in 200J.56

Service offerings, however, can lie differentiated in many ways. The offering can include Innovative features. What 'he customer expects is called the primary service package. Vanguard, the second-largest no-load mutual fund company; has a unique client ownership structure that lowers costs and permits better fund returns. Strongly differentiated from many competitors, the brand gre^v through word of mouth. Pit, and viral marketing,5!

The provider can add secondary service features to the package, In the airline industry, various carriers have introduced such secondary service features as movies, merchandise for sale, air-to-ground telephone scrvice, and frequent-flier award programs. Marriott is setting up hotel rooms for high-tech travelers who need accommodations that will support computers, fa* machines, and e-iuail. Many companies are using the Web to offer secondary service features that were never possible before:

kaiser permanente

Like many health maintenance organizations (HMOs), Kaiser Permanente is seeking value-added services that will not break the bank. The largest nonpmlit health plan m the united Stales, with £ million members in 11 states, Ihe Kaiser Permanent« wart-WHining Web site lets members register for office visits, e-mail questions to nurses an J pharmacists [and get responses within 24 hours), participate in discussions monitored by health tare professionals, and search tor information in drutj and hen'th encyclopedias. Soon members will be

■ able to clirectty access their own medical rccordsES

Conversely, oilier service providers are adding a human element to combat competition from online businesses. This is happening In many large drugstores. As in-store pharmacies see competition from low-cost online mail-order drugstores., they aic playing up the presence of on-site health care professionals. Tor instance. Brooks I'harmacy is establishing "RX Care Centers* in many of its remodeled stores. There are private consulting moms where pharmacists can speak at length with patients about complicated Prescription benefit plans, potentially dangerous drug interactions, and embarrassing subjects like urinary incontinence. CVS is giving its pharmacists more time to speak to customers by investing in machines that count pills and 111 pill bottles, a time-consuming and tedious task for most pharmacists,59

Some times the company achieves differentiation through the sheer range of its service offerings and th e success o fits cross-selling efforts. The major challenge is that most service offerings and innovations are easily copied. Still, the company that regularly introduces Innovations will gain a succession of temporary advantages over competitors.

schneider NATIONAL

Schne.der National is the world's largest long-haul trucfclrjad Ireight carrier, with more than 40,000 bright orange irailers on the roads. Allhough the coro benefit is to move freight itom one location to another. Don Schneider is in he customersokitknsBusiness, ihs company is expert at providing a cost-minimising irailer for each load. He ntlers service guarantees backed hy monetary incentives (oí meeting tighi schedules. He runs driver-training programs to improve driver performance. Dispatchers are assigned to large customers Schneider was the first to introduce a computerized tracking system in each truck. Even painting the traces orange was part of the ■ branding strategy. If further innovations come into his industry, liiey will probably come from Schneider.

Developing Brand Strategies for Services

Developing brand strategies for a service brand requires special ¿mention to choosing brand elements, establishing image dimension i*., ami devising (lie branding strategy.

CHOOSH 1G BRA iLEi-lENTS I'he intangibility of services has implications for (he choice of brand elements, because service decisions and arrangements are often made away from the Actual service location itself at home or at work), brand recall becomes critically important. In such cases, an easy-to-re member brand n¿Lirie is critical.

Oiber brand elements—logos, symbols, characters, and slogans—can also "pick up the slack" and complement Ihe brand name to build brand awareness and brand image. I'hese other brand elements often attempt to make the service and some of its key benefits more tangible, concrete, and real- for example, the "friendly skies" of United, the"nOud hands* of Ail State, and the "bullish" nature of Merrill Lynch.

lleca use a physical product docs not evist. the physical facilities of the service provider—its primary and secondary signage, environmental design and reception area, apparel, collateral material, and so on- -are especially important. .Ml aspects of the service delivery process can be branded, Which is why Allied Van t iues Is concerned about the appearance of its drivers and laborers; why UPS I undeveloped such strong equity with its brown trucks, and why DoubleTree hotels offers warm, fresh-baked cookies as a means of symbolizing care and friendliness.

ESTABLISHING IMAGE DIMENSIONS Organizational associations—such as perceptions about the people who make up the organization and ivho provide the service—are likely to be particularly i m port an r brand associations that may affect evaluations of service quality diiecfy or indirectly. One particularly important association is company credibility and perceived expertise, trustworthiness, and likahility.

Service firms must therefore design marketing communication and Information programs sn that consumers learn more about the brand than the in for million they gel from service encounters alone. These programs may involve mark el i tig communications which may be particularly effective at helping the firm to develop the proper hnmd personal i ty. In MOIL Stale Farm launched a major new image-building marketing campaign.

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    How to manage service brands?
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