Service Marketing: Direct Marketing as a Strategic Tool - Case Study Example

I. Read the case study A carnival of women, parties and fast cars: Indy Australian style used for Assignment 2 and then discuss on-line and direct marketing strategies suitable for increasing attendance at the Indy event in Queensland. A. Introduction This paper aims to explore various direct marketing strategies that Indy organizers can use in order to increase attendance at the Indy event in Queensland. Two potent, cost-efficient direct marketing tools are explored in this paper for organizers to use: website and e-mail. By employing direct marketing as a strategic tool, while its various tools being used to address tactical issues, the recommendations explore their viability in accomplishing the marketing objective of increasing attendance at the Indy event. B. Body Utilizing direct marketing as an integrated marketing communications tool has to be strategic—it does not stand on its own, but part of the tools that a marketer needs to use in order to accomplish a certain marketing objective. For the case of Indy Australian, a marketing campaign starts with the marketing objective of increasing attendance at the Indy event in Queensland. Over the years, the company has used public relations in the form of publicity (the event itself), while attracting the media. In order to leverage the effect of publicity, certain tactical decisions have to be assessed. One of these is logistics, or the way the tickets are distributed. As it is mentioned in the case, the place where the ticket is bought, as well as accessibility is an important factor when people decide on attending the event (Batchik 2006). Aside from distribution, keeping a dialogue with its current attendees in order to ensure repeat purchase and future attendance is part of ensuring a dynamic communication channel between the event organizers and these attendees. Given these issues, direct marketing can be used in order to leverage the cost-effectiveness and efficiency of technology. According to the case, many people who attended the event are not from the Gold Coast. Some of these people even come from overseas. In order to make the tickets more accessible to these customers, it will be more convenient to them for the event organizers to set up an e-commerce website. The website will serve as a tool for direct marketing. As a catalog that provides information about the event, customers will also be able to enjoy the interactivity that the website offers; it will be a way for customers to purchase tickets to the event (Grosso, McPherson & Shi 2006). Thus, setting up the events official website in order for consumers to read about the event, and purchase tickets in the process, the website will offer accessibility and convenience. Aside from being an e-commerce site and a solution to making the Indy tickets more accessible to consumers, website is also a PR tool, as it allows news and press releases to be published for readers to read. The website is also a tool for customer relationship management; by knowing which pages are most viewed by website visitors, as well as how many of these viewers have purchased the ticket via the website, this direct marketing tool is a very potent tool to gather data about consumers. With the interactivity of the website, the event organizers will be able to be able to create an on-line community with the attendees by creating forums within the website (Chiagouris & Long 2007); consumers can talk about the event as well as provide good ideas for the improvement of the upcoming event. Not only that, fanatics of the event can serve us ambassadors of the Indy event as well as living testimonials, according to what they say about the event in the forums. However, even when the event has a website, when its target attendees do not know about it unless they search it through a search engine, it is serving its purpose less. Another way direct marketing tool that the event organizers can use is e-mail. The e-mail can be used for various purposes as regards the event—informing the attendees about the website, thanking attendees in a customized manner that will inspire an affective commitment between them and the event organizers, or to just also serve as catalog that will tell about the event, but will redirect potential customers to the e-commerce website for ticket purchase. As a direct marketing tool, e-mail with its potential to be delivered in a customized manner with the advancement in technology, it is an important strategy for the organizers of the Indy event (Dacier 2009). Consumers can also opt to receive news as regards the updates regarding the event. This way, the event organizers will be able to maintain a constant dialogue with the potential attendees, keep its current attendee base while increasing it by attracting new attendees that have not previously been able to reach by traditional media. C. Conclusion In order to increase attendance for the Indy event, the organizers have to use direct marketing as a strategic tool. Given the profile of the target attendees, the company can utilize two direct marketing tools—website and e-mail to accomplish certain tactical considerations. A website can be a distribution tool by making it an e-commerce site where consumers can purchase the ticket. It can serve as catalog where consumers will be informed about the perks of the event. Also, a website can establish two-way communication with its consumers by establishing an on-line community or a forum of attendees, as well as a tool for Public Relations. Because of its interactivity and ability to generate information about the visitors of the website, from a customer relationship management perspective, a website is a very potent tool to learn about consumers and integrate the information about them for strategic purposes. E-mail is also a cost-efficient tool of direct marketing. Indy event organizers can use e-mail for various tactical purposes: to inform potential attendees about the website; to serve as a catalog about the event, but providing a link within the mail to the website where consumers can purchase tickets, or by informing attendees updates for the events in the form of news feed. Because of customization, e-mail is a very potent tool of direct marketers can use in order to increase attendance at the Indy event. II. From a customer relationship management perspective, discuss the view that marketing is the art of attracting and keeping profitable customers. A. Introduction Marketing is the art of attracting and keeping profitable customers, from a customer relationship management perspective. With the advancement in information technology, it has been less costly and more affordable for companies to maintain a dialogue and keep in touch with their customers by maintaining databases that contain customer information through various interactions of these companies to their consumers. By knowing their customers well, a company can better provide solutions to the needs of these select group of people (Ryals 2005). Customer relationship management embodies customer-focused marketing. The company can maintain relationship in a cost-effective manner with the use of CRM. B. Body Customer relationship management is defined as “information-enabled relationship marketing (Payne & Frow 2005, 167).” With technological solutions, companies can maintain databases that contain information about their consumers; information such as demographics, psycho-graphics, product usage and certain consumption activities, etc (Payne & Frow 2005). Armed with these kinds of information, the company learns about its consumers more—what they exactly need, their wants according to their lifestyle, etc. In pursuit of providing consumers better solutions to their needs, customer relationship management is tasked to use technology in order for companies to create a relationship with certain groups of consumers (Payne & Frow 2005). Relationship marketing has replaced transactional marketing, with the common view that winning new consumers but simultaneously losing them after they consume the product, because of doing business on a transactional basis is more costly than winning new consumers and keeping those consumers in the long run for the sake of profitability (Ryals 2005). Marketing, since the formation of this new concept has become more focused on the consumer. Customer-relationship management is a way of leveraging technology in order to keep these consumers by storing information about them that will provide the company accurate insights as to their exact needs and wants (Reinartz, Kraffts & Hoyer 2004). From the perspective of customer-relationship management, doing business requires being more consumer-focused. Therefore, after determining a set of profitable consumers, a company has to keep them satisfied. A company will know a lot about the drivers of customer satisfaction through market research, but such is very expensive and time-consuming in the process (Payne & Frow 2006). Companies then invest in information technology, or by setting up databases of customer information from their previous interaction with these consumers (Payne & Frow 2006). With the availability of the new technology, it has become easier for companies to probe into their databases and look for insights as regards the drivers of customer satisfaction (Verhoef 2003). Not only that, customer relationship management maintains a relationship through a dialogue with its consumers because of the interactivity that information technology provides (Mithas, Krishnan & Fornell 2005). Thus, after a company wins a set of profitable consumers, making them loyal by constantly delivering what they need and keeping them satisfied is a task of marketing. In line with the belief that loyal consumers have a lifetime value to the company due to the profits that they bring with their repeat consumption, relationship with them has to be managed well to ensure retention (Verhoef 2003). Customer retention is a function of three drivers: customer satisfaction, affective and calculative commitment, and situational and reactional triggers (Gustafsson, Johnson & Roos 2005). Customer satisfaction is achieved when a company surpasses the expectations of a consumers as regards the quality of its product or service offer. Affective and calculative commitments are defined as the companys willingness to maintain a relationship with its consumers, either through mutual rational dependence or on a more emotional level (Gustafsson, Johnson & Roos 2005). Triggers such as the situational and the reactional ones are “factors or events that change the basis of the relationship (Gustafsson, Johnson & Roos 2005).” With CRM, a company satisfies its customers by knowing them well and surpassing their expectations. With CRM, a company establishes commitments by keeping a dialogue with its consumers through websites, e-mail, telephone, mobile, or other media that provides interactivity. With CRM, a company can address some triggers such as decline in performance through various channels where customers can interact and communicate back to the company such as a toll-free hot-line, a website or an e-mail address to contact in cases of product or service problems. C. Conclusion From the perspective of customer relationship management, marketing is about managing profitable relationships with consumers. This includes attracting these profitable consumers as well as keeping them. As the focus shifts from the manufacturers to the consumers with the introduction of the concept of relationship marketing, companies have started to adopt the consumer-focused way of doing business. By looking at a select profitable few as segmented by certain characteristics, a company can better know this segment and trying to satisfy this segment rather than serving the whole market. In order to satisfy this segment, a company has to know its consumers well. While marketing research is usually utilized, because of the high expenditure in terms of money and time that is associated with it, a more accessible way to find out more about the insights of consumers is through customer relationship management or CRM. The advancement in information technology provides the company a way to maintain its relationship with its customers by establishing databases that comprise information about consumers through their various interactions with the company. With this information, the company can better adjust its marketing mix in order to suit the consumers needs more, thus keeping them loyal by providing them satisfaction. III. Discuss why having an understanding of closing the gap between customer expectations and perceptions (in terms of service quality) is important for managing a service organization. A. Introduction Services, like any other product needs to be differentiated enough in order for a consumer to choose a specific service provider. The consumers choice depends on many factors, one of which is her expectation of the service quality of the firm, a major attribute which is important in the delivery of the service. These expectations are usually a factor of the consumers perception about the quality of the service given by a certain service provider. Closing the gap between customers perception and expectation as regards the most differentiating attribute of service, its quality is crucial for ensuring customer satisfaction, and later on a repeat purchase. B. Body In a companys marketing communications activities, it tells a promise about something of value that it offers. For most companies in the manufacturing sector, these are usually products. However, for service organizations, the major thing that they offer is service—it is their product. Like any other product, under the marketing concept, services should be able to deliver a certain promise—a major solution to the needs of its consumers (Woodside, Frey & Dally 1989). Therefore, any marketer who believes in the concept of relationship marketing—which is to ensure profitability by repeat purchase of profitable consumers through satisfaction, is likely to design a service in such a high quality, as in a product (Woodsite, Frey & Dally 1989). Services are products, and like any products, consumers usually have a top-of-mind perception about a certain brand of service with regard to attributes that are important to them such as service quality, the responsiveness of the service provider, customer support, etc (Dresner & Kefeng 1995). A perception, for like any product has a role in the customers choice of service. Depending on the decision-making process of the customer, she will assess the service provider in her evoked set according to certain marketing activities that are related to the brand, and create a perception. This perception helps the consumer choose one service provider over the other—perhaps she heard about the quality of the service through a word of mouth, etc. Before she pays for the service, she creates some expectations as regards her perception (Spreng, Shi & Page 2005). When she purchases the service, or pay for it like in other kinds of products, she will assess her decision. With her expectations which are a product of her perception of the service, she will ask whether the service has failed to meet her expectations or not. This assessment of whether expectations have been met, therefore is the crucial point in aiming for customer satisfaction, in order to expect a repeat purchase from that customer (Johnson 1996). Therefore, it is very much important to match the customers expectations, as a product of the customers perceptions, by what a company delivers. In the first place, in order for a service to stand out and be chosen by the customer from her evoked set, it has to be well-differentiated from its competitors (Spreng, Shi & Page 2005). In different respects, service, unlike tangible products, is hard to differentiate based on its appearance, i.e. packaging or product performance for a tangible product. One sure way to differentiate service is by managing service quality. By managing service quality, the company aims to differentiate itself from its competitors on the basis of one of the most important attributes for choosing the service (Dresner & Kefeng 1995). Managing service quality is more complicated than managing product quality. With the advancement in technology and manufacturers can rely on machines which they can directly manipulate in order to achieve a desired level of product quality, services are delivered by people which makes it all the more, harder (Schneider et al. 2005). Therefore, in order to ensure that service quality is superior to the competition and surpasses the expectations of the companys consumers, it is important for service organizations to take care and invest in front-line employee training (Schneider et al. 2005). These front-line employees interact with consumers directly, deliver the service and are a component for determining the level of quality of the service. The way front-line employees interact with consumers usually help form the brand image of the company in relation to how these employees meet the expectations of the customers (Scheider et al. 2005). When expectations are surpassed, customer satisfaction follows. Customer loyalty which is an important consideration for repeat purchase is a product of customer satisfaction. C. Conclusion Services, like any other product needs to be differentiated enough in order for a consumer to choose a specific service provider. The consumers choice depends on many factors, one of which is her expectation of the service quality of the firm, a major attribute which is important in the delivery of the service. These expectations are usually a factor of the consumers perception about the quality of the service given by a certain service provider. Because perception plays a huge role in acquiring new customers and attracting them to try the service, their expectations based on these perceptions will serve as a benchmark for them to assess the quality of service according to their experience. In line with perception, consumers differentiate service providers according to a number of attributes, one of which is service quality. Whether the customer decides to go back to its service provider for a repeat purchase depends on many factors, one of the most important is customer satisfaction, which happens when the service provider surpasses the customers level of expectation regarding many attributes such as service quality. Therefore, closing the gap between customers perception and expectation as regards the most differentiating attribute of service, its quality is crucial for ensuring customer satisfaction, and later on a repeat purchase. References Batchik, Chris. 2006. "Integration: Bridging the online/offline gap." 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