Dimensions of Company Services

The Services 
The offer of services can take two routes. One is founded on a good knowledge of customer characteristics stemming from various surveys. The company is thus able to master and control the development of a service policy. To define possible services, the risk approach applied to a customer segment can be used. Customer activity can thus be broken down. Technical risks, linked to the availability of products and services, can be identified. This can be linked to customer know-how and use of the products and services, and also to the financial risks that should be listed in order of importance for the customer (veto, important, secondary). A range of services can be presented for each risk thus identified. As this work is conducted on a group of customers (a market segment), risks are defined by the fact that they are common to all concerned customers. We may then speak of 'generic risks', which more or less corresponds to the concept of incurred risk. The concept of perceived risk is not used here, as it refers to the situation of an individual customer only.
The second approach to define the service offer involves leaving as much room as possible for the development of interaction with the customer. The choice of developing a particular service happens case by case. A structuring and reinforce­ment of the developed skills follows in order to build a capacity to offer the new service to other customers. The aim is to create a service offer through a pilot operation, which the company will then rationalise. In this instance, the company chooses adaptation as a development strategy.

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Posted in: Business,Business to Business

What does Customer Profitability Mean?

Customer Profitability 
This debate is beginning to seriously concern supporters of modern management techniques. The principles of the profitability of the offer, meaning the product or prcduct line, are widely known. By taking into considera­tion several elements that afe relevant to the customers themselves (the importance of the price, problems in dealing with certain customers, the services expected by others, etc.), it is legitimate to wonder whether establishing customer profitability is not the required complement to, or the intelligent substitute for, product profitability. Research has shown that there are large differences in profitability from one customer to another (Turnbull and Zolkiewski, 1997). In particular, we have already shown that investments for a given customer are important and they must be offset over time. Keeping customer loyalty is less costly than gaining new customers. Different customers do not generate the same amount of cost from their supplier, and therefore the selection of customers is important to the overall prof­itability. The principle of establishing customer profitability.
The comparison of the different levels of 'marketing contribution' from several customers enables us to have an additional view to that of the profitability per family of offers or products, and consequently to orientate the company's commercial strategy.

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Information That Interests Consumers

Information That Interests 
People tend to notice information that is interesting to them. In turn, they are in­terested in subjects with which they are involved. They are essentially interested in themselves and in various extensions of themselves. Elihu Katz summarizes and interprets some relevant empirical findings:
Apart from the quest for support and for utility, mere interest would seem to be an important factor in selectivity. The desire to see one's self-reflection is part of this. So is the desire to keep watch over things in which one has in­vested one:S ego. Thus moviegoers identify with screen stars of similar age and sex: one reads in the newspaper about an event in which one personally participated; one reads advertisements for the product one purchased; politi­cal partisans immerse themselves in political communications regardless of its source; smokers choose to read material supporting the smoking-lung can­cer relationship no less than material disclaiming the relationship, and much more avidly than nonsmokers; after one has been introduced to a celebrity, one notices (or "follows") his name in print even more frequently.
The relationship of interest to attention can be seen by noting the difference in advertisement readership across product classes. A study in the early 1950s of nearly 8,000 one-page advertisements in Post and Life was conducted by Starch, a service that regularly reports advertising readership. It revealed that automobile advertisement'readership by men, according to one of their measures, was five times as high as that for women's clothes and about twice as high as for toilet goods, insurance, and building materials, For women, the highest categories were motion pictures and women's clothing, which had twice the readership of adver­tisements for travel and men's clothing and four times that for liquor and machin­ery.
Russell Haley offers several case studies to support his opinion that people are more apt to look at and remember things in which they are interested than things in which they are not.55 He further hypothesized that people are interested in information concerning benefits that they feel are important in a product. He thus applies benefit segmentation to the task of penetrating the attention barrier. In one on-air television test, the interest in the benefit offered in the commercial was measured for each of five segments, as was the attention level achieved 'by the commercial.

In another study reported by Haley, the target segment was preoccupied with their children's welfare. A child-oriented test advertisement received an attention level over five times that of each of the five other advertisements.
A most effective approach for gaining attention would be to run an advertise­ment about the person or persons to whom it is directed, mentioning him by name and discussing his activities. Max Hart (of Hart, Schaffner & Marx) reportedly scoffed at his advertising manager, George L. Dyer, when the latter offered to bet him $10 that he could compose a newspaper page of solid type that Hart would read word for word. Dyer said, "I don't have to write a line of it to prove my point. I'll only tell you the headline: THIS PAGE IS ALL ABOUT MAX HART. "
Such an approach is usually impossible (except in direct marketing mail pieces, where the letter and envelope can often be "personalized" by laser printing the recipient's name), but advertisements can be developed with which people can readily identify. For instance, an insurance company ran a series of advertise­ments in which agents were presented in a most personal way. Their hobbies and lifestyles were discussed in a manner that made it easy for readers to identify with them. Such advertisements, of course, were sure to have an enormous impact on the company's agents, who could easily pfcture themselves in them. A firm's own employees or its retailers are often an important audience, even if not the primary one.
Another approach is to present a communication involving topical issues­those in which the audience is likely to be heavily involved. Thus, in the late 1980s and early 1990s, many companies began tying their advertising appeals to various aspects of the highly topical issues of ecology and recycling. As long as the copy is handled properly, the resulting association will very likely be positive. "News value" can also be created by the advertiser, as was done by Taster's Choice In­stant Coffee, which ran an ad campaign'much like a soap opera miniserial, with TV viewers following each episode of the amorous goings-on between two apartment neighbors who met when she ran out of Taster's Choice for a dinner party and wanted to borrow some from him. Yet another approach is to address the lack of interest head-on and challenge it. When CIGNA insurance ran ads announcing its change in logo in 1993, the ad said "Was, (showed oldlogo), Is, (new logo), Who Cares? (copy giving reason for the change)." Obviously, a creative agency could come up with hundreds of other ways to create interest.

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Setting Business at Home

For many of us, being able to work from home would seem like an ideal solution for our hectic lives. Whether we are telecommuting to our workplace, starting our own business or freelancing, working from home could be an ideal thing. But there can be work at home pitfalls. Prepare yourself for the work at home transition with our handy guide.

Organization Methods 

It may seem like a great thing to be able to work from home, but if you're not careful you can fall into work at home pitfalls. Some of these pitfalls are cunningly disguised as work at home benefits. For example, there is the freedom. It may seem like one of the benefits, but when you have a job out in the real world you have a structured schedule. When you are working from home, a structured schedule can sometimes go out the door if you're not careful. We can allow ourselves to think we don't have a certain time that we need to start work, that we don't have to get dressed to go to work, that we can allow ourselves to get distracted by different things, all because we are at home. But nothing could be further from the truth. Working from home has to be treated as work, otherwise you can face work at home pitfalls.

The first thing to do is take the time for scheduling work from home. Have a schedule that you follow each day unless there is an important reason why you can't keep the schedule. For example, a doctor's appointment or a family emergency. These types of reasons can also disrupt your work in the actual work environment, so working from home should be no different. Second always dress for work. Some of us might think that getting dressed in a nice outfit is pointless when working from home, but getting dressed will help you to feel like you're heading into the workday, not just lounging around the house.

Next, create an office space for you to work in each day, maybe a spare room in your home, or just a corner of the house where you know you can have some peace and quiet. Another suggestion is to have a separate phone number from your home phone. The reason for this is so that you won't be distracted by personal calls. If it makes you feel better, you can give this number to your kid's school so they can contact you if they need to. For the most part, this number should be used for business purposes only. Have a laptop or desktop computer set up that is for business use only. Don't be tempted to surf the net during what should be work time. Also, if there is anyone at home with you, tell them that you're not to be interrupted unless it's important. The next tip is to always keep your work a priority. Don't let being at home distract you from the things you need to do. It takes a lot of discipline, but you've got to stay on task. Remember that you won't have a boss observing your work, so it's up to you to figure out what needs to be done first, and so on.

Another word of advice: know when to stop working. This can be another of the work at home pitfalls. Because you're at home, you may get carried away and keep working well into the late hours. This isn't a good idea. Your work shouldn't be the only thing in your life, especially if you have a family. Once again, keep a set schedule. Even if you feel something needs to get done for your job, there will always be tomorrow to take care of it.

One last piece of advice--remember to get out of the house from time to time. One good thing about working outside the house is that you actually get outside the house. If you need to take a short walk around the neighborhood to sort through your thoughts, go for it without feeling guilty. Remember that in a structured office environment you will always get breaks and a lunch hour. Working from home should be no different, so have a break time and lunchtime and take this time to unwind and maybe even get some air. There can be work at home pitfalls, but there are also benefits to working from home if you just learn the proper balance between your work and your personal life.

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Posted in: Business

9 Ways to Aalyze Customers in Positioning Strategy

Aalyzing the Customers 
The ultimate positioning decision specifies where in the perceptual map the brand should be positioned. Making that decision obviously requires knowing which ar­eas in the map will be attractive to the customers. In most cases, customers will differ markedly as to the area in the perceptual map they prefer even if their perceptions of brands are similar. Thus, the task is usually to identify segments or clusters of customers based on their preferred locations in the perceptual maps. The decision will then involve selecting the segment or segments as well as the tar­gd position.
One approach to segmentation involves identifying which attributes or cus­tOlmer benefits are most important and then identifying groups of customers who val'ue similar attributes or benefits. Another approach uses the concept of an "ideal object." An ideal object is an object the cus­tomer would prefer over all others, including objects that can be conceptualized but do not actually exist. It is a combination of all the customer's preferred at­tribute levels. Customers who have similar ideal objects will form relevant seg­ment!,.
Preferences may be very sensitive to use context. In one s,tudy, focus groups (structured discussions involving eight to ten people) and judgment were used to identify nine relevant use contexts for coffee:34

• To start the day
• Between meals
• Between meals with others
• With lunch
• With supper
• Dinner with guests 
• In the evening
• To keep awake in the evening
• On weekends

In this study, there were differences across use occasion (Hill's Brothers had a 7 percent share of breakfast use but only a 1.5 percent share of the remainder of the day). The major differences were found between A.M. coffee drinkers and P.M. cof­fee drinkers.

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Ways to Reach Market Targets

Reaching Target Segments 
There are two ways by which markets can be reached: controlled coverage and customer self-selection.2o
In the controlled-coverage approach, the objective is to reach desired-target segments and to avoid reaching those who are not in the target segments. Suppose that a segment is defined as "better golfers," and it is determined that they usually read Golf Digest. Suppose, further, that there are few readers of Golf Digest who are not in the target segment. Then an advertising campaign in Golf Digest would be an efficient way to communicate with the target segment. Another way might be to use direct marketing techniques to mail a message to people who are subscribers of Golf Digest, renting their names from the magazine or a list broker. Many companies are now creating immense computerized databases on their actual and potential customers, enabling them to execute extremely targeted direct marketing programs. This technique is often called database marketing.
Customer self-selection is an alternative approach. Here the advertising pro­gram is directed to a mass audience of which the target segment may be only a small part. Those in the target segment are attracted to the marketing effort since it is tailored to them. Those not in the target group will probably avoid exposure, not because the program is unavailable to them, but because they either con­sciously or unconsciously choose to avoid it. For example, although ski equipment has a rather narrow appeal, afirm may run an advertisement about it in a mass cir­culation magazine. The target segment, all skiers, will be attracted to the adver­tisement if it is well done, but nonskiers will probably not be tempted to read it.

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Ad Characteristics That Attract Attention

Ad Characteristics 
Many characteristics contribute to the ability of an advertisement to attract atten­tion.
The size and intensity of an ad will often influence attention. Advertisement readership will increase with advertisement size, although not linearly. Research using Starch measures of advertising readership has found that readership scores of full-page ads using four colors are about 85 per­cent higher than are scores of half-page ads using four colors.
A "loud" ad stimulus will be more likely to be perceived than one of less in­tensity. Color presentations will usually attract more attention than will those in black and white: Starch concludes that the use of four colors generates about 50 percent more readership than black and white for one-page and two-page ads. Po­sition can also influence attention. The left side of the page and the upper half get slightly more readership because of people's reading habits. Starch has concluded that ads on the back of a magazine will attract about 65 percent more readers than those toward the middle. Ads on the inside front and back covers will attract about 30 percent more readers.
Research has also highlighted the attention-getting properties of "vivid" in­formation-information that is concrete rather than abstract, imagery provoking, emotionally interesting, containing a great deal of detail and specificity about objects, actions, outcomes, and situational context. It has been suggested that ad­vertising phrased in concrete, detailed, and specific terms will attract more atten­tion (and be more influential in shaping product quality judgments) than will copy phrased in abstract and general terms: It is important, however, for the message itself to be vivid, not simply the presentation of it, and for the consumer to process the information in terms of its imagery: vivid but irrelevant information may get initial attention but may not get processed and have no impact on subsequent attitudes.
Several studies have also investigated the impact of an ad's collative prop­erties on the amount of attention given to them. Morris Holbrook and Donald Lehmann found that ads rated as surprising, incongruous, or funny were more likely to have been read, and Bruce Morrison and Marvin Dainoff found that the visual complexity of magazine ads was' positively related to the time that readers spent looking at these ads.

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Active Search Methods for Consumer Attention

Active Search 
There are situations in which buyers will not obtain adequate information for de­cision making from sources to which they are normally exposed. In such cases, they may actively seek out information from advertising in special interest magazines, by soliciting opinions from others, or by reading technical reports.
Active search generates exposures that are extremely important because of the salience of the information to the receiver. Such exposures will be more likely to affect product knowledge and attitude structure than those not associated with effort. Furthermore, the receiver is apt to be close to a purchase and the chances of forgetting the message are therefore lower. Active search is more likely to occur when risk and uncertainty are high-with major purchases, products involving rel­atively high involvement, and products that are new. The need for information will be highest for new products and lowest for brands with which a buyer is very fa­miliar. As buyers develop brand loyalty, for example, their need for product infor­mation will be reduced. Evans found that automobile buyers who repurchased the same make are less likely to shop than are those who switched from one make to another. The active search for information is likely to be highest among those consumers who already have some knowledge and expertise about the product category-prior knowledge facilitates comprehension of additional information.
Those with lesser knowledge may seek less "hard" information, process it less an­alytically, and rely more on friends and salespeople for advice.29

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Advertisements and Ad Attentions

Researchers have attempted to measure the number of advertisements that each consumer is potentially exposed to every day, and these esti­mates range from at least several hundred to a couple of thousands.l Between 1967 and 1981, the average number of network TV commercials per day rose from 1,856 to 4,079, and by 1989 this number had risen further to 6,180. The rates of increase in non-network TV commercials was even greater. These in­creases occurred bo(h because more TV minutes per hour were devoted to commercials, and because more-and shorter-TV commercials ran in each commercial minute. While sixty-second TV commercials constituted 77 per­cent of all network commercials in 1965, they made up only 2 percent of the total in 1989, by which time thirty-second ads formed 57 percent of the total and fifteen-second spots formed 38 percent of the total.
With this increasing amount of clutter, and with more households zapping ads through their TV remote controls, it is becoming increasingly difficult for ads to gain the attention of consumers. And, because channel-switching and ad­avoidance means consumers are viewing fewer seconds of ever-smaller commer­cials with ever-reducing attention, even ads that do get watched communicate less of the intended information. Studies have found that ads are fully or partly mis­comprehended between 20 to 30 percent of the time.
Clearly, regardless of whether an ad is aiming at boosting recall, changing brand attitudes, or inducing purchase action, there are two important prerequi­sites for any effect t6 occur. First, an individual must be exposed to.it and pay some attention to it. As the hierarchies of effect pointed out, gaining a consumer's attention is usually the first step in creating effective ad­vertising. Getting such attention is rarely enough by itself, but an ad that fails to get attention is unlikely to achieve anything else. One might say that getting (and holding) a consumer's attention is a necessary but not sufficient condition in cre­ating effective advertising. In the second step, a consumer who does pay attention to an ad must interpret and comprehend it in the way the advertiser intended it to be interpreted. The communication must not be misinterpreted or miscompre­hended; if this does happen, the ad is unlikely to lead to the kind of attitude change that the advertiser seeks.
Each of these steps of attention and comprehension represents, in some sense, a perceptual barrier through which many advertisements fail to pass. Some advertisements are not successful at stimulating sense organs in the recipient to a minimal threshold level of interest or awareness. Other advertisements have their meaning distorted by the recipient in such a way that the effect of the advertise­ment is quite different from what the advertiser intended.
Perception has been defined as "the process by which an individual maintains contact with his environment,,4 and elsewhere as "the process whereby an individ­ual receives stimuli through the various senses and interprets them."SStimuli here can refer to sets of advertisements (such as a campaign), to a single advertise­ment, or to a portion of an advertisement. The process includes two stages-attention and interpretation (or comprehension). Both playa role in helping an individual cope with the infinite quantity of accessible stimuli, a quantity that would otherwise be impossible to process. The first stage is the attention filter. The second stage in perception is the interpretation process. An individual organizes the stimulus content into his or her own models of reality, models that may be very different from those of other individuals or of the sender. In doing so, the person often simplifies, distorts, organizes, and even "creates" stimuli.
Given this background on the perceptual process, it is clearly helpful to de­velop some understanding of these psychological processes, so that ads can be de­signed to maximize their attention-getting ability and their ability to correctly communicate the targeted copy-points. In the balance of the chapter we will con­sider, in turn, attention and comprehension.

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Reconcile Consistency Theories of Advertising

Reconciliation 
How does one reconcile consistency and complexity theories, two intuitively plau­sible but conflicting positions? One approach is to assume that tendencies toward consistency and variety both exist. The one that will dominate will depend on the personality and the situation involved. Assume that there is a level of activation at which an individual is comfortable and effective. When the activation level is lower than desired, the individual will pursue variety to increase it. When it is high, she or he will be motivated to reduce stimulation and seek harmony such as is pre­dicted by consistency theories. Obviously, there will be differences across people in terms of the optimal activation level. The situation will also determine behavior. If a high level of activation is required for optimal task performance, variety seek­ing will emerge. Thus, if a person is embarking on a major purchase, he or she may require a variety of information; if it is a routine purchase, such a drive will not tend to emerge.

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