Marketing colleges and universities in a service economy

Presenter: Tom Hayes, www.simpsonscarborough.com

From CASE: “Focus on the difference between marketing a service (think your school) and marketing a product (which are what most marketing courses apply themselves to). We are in a service economy. This seminar is about competing successfully in it. Learn how and why the expectations of our university’s audiences are changing and what the implications are for your institution. We will expand the traditional 4 Ps of marketing to the 7 Ps of service and focus on why the resulting integrated marketing activities are essential when competing for students, reputation, and revenue sources. Learn what quality service is, how it applies to a university, and where it breaks down resulting in, at best, a confused customer, and at worst, a broken brand promise.”

Key point: Marketing is applied psychology.

Changes in world economies

• From agricultural economies to industrialized economies to service economies.
• Your customer’s expectations are shifting.
• They expect services to be immediate, perfect, free!

Seven P’s of service

We can control these four:

• Product
• Price
• Place
• Promotion

We must, however, use three more:

Physical evidence

• Arrangement of objects
• Materials used
• Shapes/lines
• Lighting/shadows
• Color
• Temperature
• Noise

Process design

• Policies and procedures
• Factory/delivery cycle time
• Training and rewarding systems

Participant

• Service provider
• Customer being serviced
• Other employees and customers

Quote: “If you are not serving the customer, you had better be serving someone who is” (Albrecht and Zemke)

Differences between services and packaged goods

• Intangibility — the deposit is in the mail before the first class begins … reputation and physical evidence is is critical.
• Inseparable — services are inseparable from those who deliver the services.
• Variability — worst thing you can be … decreases trust. Standardize processes.
• Perishable — experiences are here, then they’re gone.
• Trust is a key component.
• The customer particiates in the process.

Every contact is an assessment of your reputation. Expectations are getting higher.

Criterion for satisfaction is different for services

• Consumers are using personal sources more frequently.
• They rely on perceptions of quality.
• Evoked set is smaller for services — people can only compare intangible services to each other, so they chose from from.
• Emphasis on reduction of perceived risk — reinforce decision after it’s made

It’s all about expectations

• What people are willing to put up with is based on their expectations.

Ways service marketers can influence factors

Explicit service promises

• Make realistic promises.
• Ask for feedback for promises made in public communications.
• Avoid price or advertising wars.
• Formalize service promises.

Implicit service promises

• Make sure service tangibles — a beautiful campus — accurately reflect the service provided.
• Ensure that a premium price are justified by a higher level of performance.

Definitions of service success

Quality factors in a service world

From a customer’s perspective (Berry et. al.)

• Reliability — consistency, dependability, honor your promises. Leads to trust.
• Responsiveness — willingness/readiness of employees to provide service.
• Competence — skills and knowledge of contact and operational personnel.
• Access — apprachable and ease of contact.
• Courtesy — politeness, respect, consideration, friendliness.
• Communication — speak in a language customers can understand and listen!
• Credibility — trustworthiness, believability, honesty.
• Security — freedom from danger, risk, doubt; physical safety, confidentiality.
• Undertanding the customer — individualized attention, customer requirements.
• Tangibles — physical evidence of service.

Where does quality fall apart?

• Gaps between what the customer wants and what we think they want.

• Solutions: use market research and other methods for customer understanding.