Marketing Strategy in Service Business - amegaro@unisa.it - Programme • Marketing and Service Marketing: an overview • Marketing plan • Complexity management • New marketing strategies approaches: Relationship Marketing and Many-to-Many network; Experiential marketing; Unconventional marketing • New marketing vision: Service Research - from S-D logic & Service Science to service ecosystems & service systems • Technologies as Decision Support Systems for marketing strategies Case studies Examples Project work Agenda: Lesson 3 • Complexity management • New approaches: Relationship Marketing and Many-toMany network; Experiential marketing; Unconventional marketing Examples 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 It assumes the importance of relationships and interactions between actors and includes theories, models and applications expressed in terms of relational concepts and processes. In network theories, the unit of investigation is never isolated, but it results as a set of actors, interrelated. Network studies focus on: • Dyads (2 actors and the links between them) • Triads (3 actors and the links between them) • Network aggregates with a greater number of actors (network) 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.) Network Analysis principles Relationships - interactions • A relationship structurally describes the possible link between 2 actors (connects 2 nodes). • Between actors various types of links can be detected and evaluated (between 2 same nodes there can be different links depending on the perspective). • The relationship refers to the static / structural moment, therefore it does not require an actual exchange. • When the relationship is activated, there is interaction, exchange. 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 An 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 that may be useful to overcome complex situations…) put on your nose the network eyeglasses! Total Relationship Marketing Experiential 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), Experiential Marketing Planning of Brand Experience Customer Experience Management Study of the experiences that customers lived and can live through consumption Building of experiential positioning Activation of relationships with customers that enter the experience ANALYSIS STRATEGY DESIGN IMPLEMENTATION 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 Unconventional Marketing 3.5 Set of marketing strategies and tactics aimed at: • Generating emotions • Memorability (awareness) • Uniqueness • Create surprise • Involve recipients (engagement) Unconventional 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 Neuromarketing is a recent branch aimed at identifying communication channels more direct to purchasing decision-making processes, through the use of methodologies linked to neuroscience discoveries. It fuses traditional marketing (economics) with neurology (medicine) and psychology (behavioral sciences) and aims to illustrate what happens in people's brains in response to some stimuli related to products, brands or advertising with the aim of determining strategies that push to buy. Neuromarketing Application of neuroscience and psychological studies to analyze processes and factors that may affect the consumer choice and behavior in order to detect any changes in attitude as the context and value proposition change. The aim is «to get inside the customer’s head» (Lee et al., 2007) Interdisciplinarity : medicine/behavioral economy Neuromarketing Purposes: • Intercepting and anticipating consumer behavior (and changes in attitudes and preferences); • Compare consumers' brain reactions to certain stimuli, solicitations and emotions; • Investigate the brain mechanism that leads consumers to decide and choose the value proposition. Neuromarketing: an example Pepsi Challenge (1975), they offered hundreds of people two anonymous glasses. One glass contained Pepsi, the other Coca Cola: • in terms of taste, 75% said they preferred the glass containing Pepsi but they kept buying Coca Cola anyway. • It shows that the consumer behavior depends on different factors: in this case on the brand image. Neuromarketing: an example Antonietta Megaro amegaro@unisa.it THANK YOU. Questions? Comments?