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Strategic
Marketing Forum
___________________________________________
SERVICES
BRANDING DELIVERING A VALUE
PROPOSITION
Prithwiraj
Nath
Assistant
Professor, Marketing Area, Xavier Labour
Relations Institute, Jamshedpur
Dharmendra
Sanwal
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Service
Offerings versus Products
Most physical goods tend to be relatively high in search
qualities; these are attributes that a customer can
determine prior to purchasing a product, such as colour,
style, shape, price, fit, feel, hardness and smell.
Services, by contrast, may emphasise experience qualities,
which can only be discerned after purchase or during
consumption; as with taste, wearability, ease of handling,
quietness and personal treatment. Finally, there are
credence qualities-characteristics that customers find
hard to evaluate even after consumption like surgery,
legal services, etc.
Since services are very competitive and there is a very
high level of replication of products, consumers do
not perceive a drastic fall in quality with falling
price. For highly intangible service offerings in particular,
organisation-wide factors, such as the level of functional
service quality, may be emphasised when adding value
(Gronroos, 1984; Parasuraman et al, 1991). Zeithaml,
Parasuraman and Berry (1985) also highlighted the uniqueness
of service offerings in terms of their intangibility,
non-standardisation, perishability and inseparability
of production and consumption. In addition, contributions
from Bharadwaj et al (1993), and Zeithaml (1988) suggest
that extrinsic cues such as image and reputation may
be particularly important in adding value in cases where
consumer understanding of service offerings is limited.
This is likely to be the case, in particular, where
service offerings are complex and, as a result, highly
‘mentally intangible’ to the average consumer. Leonard
L Berry, in his model shown above, highlights the importance
of the customer’s experience, which in turn is based
on the service performance.
The presented brand is the company’s controlled communication
of its identity through advertisement while the external
brand communication refers to the information customers
absorb about the company that essentially is uncontrolled
by the company. These factors, combined with the customer’s
experience, lead to increased brand awareness and brand
meaning. Brand meaning refers to the customer’s dominant
perceptions of the brand and hence differs from awareness.
Both these factors put together lead to development
of brand equity. In services marketing, unlike in product
marketing, it is the customer’s experience that plays
a very important role and even if his services experience
differs from the advertising message, he will go more
by his experience. Thus, the main differentiating role
is played by the service performance.
Service branding—the emerging paradigm
Services’ marketing has a very sensitive aspect where
the strategy revolves around the customer. Building
a strategic relationship with the customer is very essential.
By identifying the drivers of consumer choice, a service
marketer can identify the factors that can be leveraged
in different service conditions to add value to the
consumer and thus differentiate the offering. The process
of adding value is in essence differentiating one’s
offerings effectively in the eyes of the consumer, and
this is where branding services becomes important.
Some of the reasons that make branding a valuable proposition
for services are:
Strong brands increase customers’ trust of the invisible
purchase.
Strong-brand companies have high ‘mind share’ with targeted
customers, which contributes to market share.
They enable customers to better visualise and understand
intangible products.
They reduce customers’ perceived monetary, social and
safety risks in buying services.
Steps for building a service brand
With appropriate senior management commitment, building
a relevant and powerful brand for any consumer-focused
company, including a bank, is a reasonable goal. There
are six components that go into successfully branding
a service sector firm. These steps blueprint the process
of developing a concise message or promise that an institution
wants to communicate to its customers, and for executing
a strategy that delivers on that promise. The above
figure illustrates the process of building brands.
1) The first step in building a branded business is
to understand the role of the brand in that particular
business, including the leverage it can provide across
markets and product categories. A brand can provide
information and communicate efficiently, qualify a product
or service, or establish differentiation. A truly powerful
brand can do all three if necessary. To decide what
role brands should play, it is important to take a dispassionate
look at the current status of the organisation and product/service
offering-how they are perceived by customers, competitors
and employees. In addition, the institution has to understand
what these distinct constituencies need to know and
believe about the brand. For instance, in General Electric’s
(GE) appliance business, the retail trade is most interested
in product quality, marketing support and access to
credit. Consumers are interested in product quality,
but in addition seek a set of design attributes. GE’s
brands thus play two roles.
2) Secondly, brand builders must choose a brand architecture
consistent with the chosen role and the institution’s
products, services and market landscape. There are three
types of brand architectures: the first is a single
brand—one brand that covers the entire product range,
for example, Sony, Home Depot and Visa. Then come tiered
brands—with a parent brand supported by sub-brands for
each product line. Companies such as Sears and Nabisco
use a tiered brand architecture, where individual brands
benefit from the corporate brand umbrella. The third
architecture is multiple brands—with each product carrying
its own brand distinct from the parent. Procter & Gamble
is a company that uses multiple brand architecture,
with each of its products—Tide, Pampers, Ivory Soap—building
and supporting its own brand identity. Which brand architecture
you choose depends on business objectives and market
conditions. The single brand architecture best applies
when customers seek the same attributes across market
segments and product lines. The tiered brand architecture
allows the institution to build on critical foundation
attributes while still tailoring the marketing message
to specific segments. Multiple brands are needed when
each market segment has distinct needs.
3) The third step in branding a business and developing
a brand strategy is to position the brand to effectively
communicate the value proposition. Critical here are
clarity, consistency and relevance. Volvo (safety),
Nike (limitless performance) and Wal-Mart (good deals)
are examples of companies that have clear brand positions.
The clarity is achieved through the consistent use of
all marketing levers (price, product design, image and
channel selection) to drive home a single message.
4) In the fourth step, a company must develop the programmes
needed to deliver the brand and the brand promise. This
happens through programmes or services that convey the
brand message to the target audience. Nike’s support
of grassroots athletic events and Visa’s Olympic sponsorship
illustrate the type of programmes needed to creatively
deploy brands. Nike helps amateur athletes perform,
while Visa demonstrates its global reach.
5) Essential for generating brand performance is the
fifth step in effective branding: creating or designing
an organisation to lead and manage a branded business,
one that includes the right skills and structure to
execute the brand strategy. Citibank, for example, has
recently recruited a number of people with brand-building
skills, including William Campbell, formerly the marketer
behind many of Philip Morris’ successes.
6) Finally, for a brand to be effective in the marketplace,
the business system must be aligned with the brand promise.
It must start at the very top with a vision and strategy
that is embraced and articulated by senior management.
Imagine Virgin Air without Richard Branson or Nike without
Phil Knight and the importance of leadership in establishing
and driving a brand becomes obvious.
Case Study:
How ICICI bank is branding its services
Philosophy:
‘Trademark customer experience differentiates a bank
from competitors offering the same products and services’.
Service levels must be better than the expectations
that are built through marketing and advertising, and
then people will talk about your service.
Touch customers in many ways (insurance, banking, mortgage
financing, retirement planning), and through various
channels (branch, online, direct mail, telephone etc).
Catch customers young. Target audience must be youngsters
in their twenties with whom it can establish a lifelong
relationship.
Tap into its vast quantities of information about customers’
habits.
Brand-building exercise:
Ran a campaign in the print media for educating the
ordinary investor; weekly investment articles were published
in all major dailies.
‘Umbrella’ campaign: Conveyed values of safety, security,
and shield against calamities for investors (positioning
the brand so as to communicate the value proposition).
Used Amitabh Bachchan as their brand ambassador.
Unified and new group identity for ICICI has been the
focus of their branding strategy (a single brand architecture).
First financial services company to brand its bonds
offerings: ICICI Safety Bonds.
For promoting ICICI Prudential Life Insurance Company
Ltd, the theme was ‘cover every Indian with joy, hope,
freedom, life’. Further, they chose children from municipal
schools who received endowment policies worth Rs. 20,000
each from the MD. Both, the Safety Bond and the ICICI
Prudential Life Insurance were programmes to deliver
the brand promise.
Future Strategy:
Cross-selling: The idea here is to sell all kinds of
financial services through one common channel-selling
a Demat account to a savings account customer or selling
a credit card or debit card to an existing customer.
Bundling of services with non-finance companies.
Summary
Services differ from physcial goods as they emphasise
experience qualities, which can only be discerned after
purchase or during consumption.
Service offering are becoming an integral part of today’s
business and in the process of differentiating one’s
offerings effectively in the eyes of the consumer, branding
services have started playing an important role.
Building a strategic relationship with the customer
is very essential.
To develop service brands, choose appropriate brand
architecture, position the brand, develop the programmes
needed to deliver the brand and align the business system
to the brand promise.
References:
1. Bharadwaj, S.G., Varadarajan, P.R., and Fahy, J.;
‘Sustainable Competitive Advantage In service Industries:
A Conceptual Model and Research Propositions’, Journal
Of Marketing, Vol. 57, October, 1993
2. Berry, Leonard L.; ‘Cultivating Service Brand Equity’,
Journal of the Academy of Marketing Science, Volume
28, No. 1, 2000
3. Grönroos, C.; ‘A Service Quality Model and its Marketing
Implications’, European Journal of Marketing, Vol. 18,
No. 4, 1984
4. Parasuraman, A; ‘Understanding Customer Expectations
of Service’, Sloan Management Review, Cambridge; Vol.
32, No. 3, Spring, 1991
5. Zeithaml, Valarie; ‘A Consumer’s Perceptions of Price,
Quality, and Value: A Means’, Journal Of Marketing,
New York, Vol. 52, No. 3; July, 1988
6. Zeithaml, V.A., Parasuraman, A. and Berry, L.L.;
‘Problems and Strategies in Services Marketing’, Journal
of Marketing, Spring, 1985
7. www.bah.com .
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