Tuesday, April 28, 2009

Service Marketing Mix/Extended Marketing Mix

The service marketing mix comprises off the 7’p’s. These include:

  • Product

  • Price

  • Place

  • Promotion

  • People

  • Process

  • Physical evidence.

Lets now look at the remaining 3 p’s:


An essential ingredient to any service provision is the use of appropriate staff and people. Recruiting the right staff and training them appropriately in the delivery of their service is essential if the organisation wants to obtain a form of competitive advantage. Consumers make judgments and deliver perceptions of the service based on the employees they interact with. Staff should have the appropriate interpersonal skills, aptititude, and service knowledge to provide the service that consumers are paying for. Many British organisations aim to apply for the Investors In People accreditation, which tells consumers that staff are taken care off by the company and they are trained to certain standards.


Refers to the systems used to assist the organisation in delivering the service. Imagine you walk into Burger King and you order a Whopper Meal and you get it delivered within 2 minutes. What was the process that allowed you to obtain an efficient service delivery? Banks that send out Credit Cards automatically when their customers old one has expired again require an efficient process to identify expiry dates and renewal. An efficient service that replaces old credit cards will foster consumer loyalty and confidence in the company.

Physical Evidence

Where is the service being delivered? Physical Evidence is the element of the service mix which allows the consumer again to make judgments on the organisation. If you walk into a restaurant your expectations are of a clean, friendly environment. On an aircraft if you travel first class you expect enough room to be able to lay down! Physical evidence is an essential ingredient of the service mix, consumers will make perceptions based on their sight of the service provision which will have an impact on the organisations perceptual plan of the service.

To summarise service marketing looks at:

The Characteristics of a service that are:

(1) Lack of ownership

(2) Intangibility

(3) Inseparability

(4) Perishability

(5) Heterogeneity.

The Service marketing mix involves analysing the 7’p of marketing involving, Product, Price, Place, Promotion, Physical Evidence, Process and People. To certain extent managing services are more complicated then managing products, products can be standardised, to standardise a service is far more difficult as there are more input factors i.e. people, physical evidence, process to manage then with a product

Thursday, April 16, 2009

The Hierarchy Model of Advertising Effects

AbstractThe most often cited hierarchy model was developed by Lavidge and Steiner (1961), and this has been regarded as the process by which advertising works for more a century. But some recent reviews of the empirical literature found little evidence to support the existence of an advertising hierarchy, and this continues to be the subject of debate. Most recently, Weilbacher (2001) and Barry (2002) have debated the hierarchy model of advertising effects in their articles published in “Journal of Advertising Research”. In this paper, the contribution of these articles to marketing theory, as well as practice are compared and assessed. The paper then concludes with implications for integrated marketing communications.
IntroductionAdvertising has existed for many decades but the intellectual theory of advertising such as how it works and why it works are still debatable issues in academia and industry (Barry & Howard 1990). One suggested explanation is the hierarchy of effects, a body of literature that posits that audiences go through a variety of stages (cognitive, affective, and conative) in responding to advertising and other persuasive marketing messages (Gallup 1974; Lavidge & Steiner 1961; Vakratsas & Ambler 1999). The most often cited hierarchy model was posited by Lavidge & Steiner (1961), who believed that advertising was an investment in a long term process that moved consumers over time through a series of stages beginning with product unawareness and ending with an actual purchase.
However, Vakratsas and Ambler (1999) have recently reviewed more than 250 journal articles and books in an effort to better understand how advertising works and affects the consumer. They state that ‘a review of the empirical literature found little evidence to support the existence of an advertising hierarchy’ (p. 26). Their evidence initiated much debate most recently by Weilbacher (2001) and Barry (2002) in their articles published in Journal of Advertising Research, where they discuss the hierarchy model of advertising effects.
In this paper, a comparison and assessment is made of the contribution of articles to marketing theory and practice, based on reviewing the published literature. The paper also examines the implications of this for integrated marketing communications.
The Hierarchy of Effects ModelsThe conceptual model they implicitly apply to advertising is a simple causal hierarchy of effects (Vakratsas & Ambler 1999), little changed in its essentials from the AIDA model, which has been around since 1898 (Strong, cited in Hall 2002).
Hierarchy of advertising effects models have been around in the literature of marketing for more than a century (Yoo, Kim & Stout 2004). The traditional hierarchy framework asserts that consumers respond to advertising messages in a very ordered way. According to Belch & Belch (2004), ‘a number of the hierarchy of effects models have been developed to depict the stages a consumer may pass through in moving from a stage of not being aware of a company, product, or brand to actual purchase behavior’ (p. 147). In two of the best-known response hierarchy models (see appendix, figure 2), while these response models may appear similar, they were developed for different reasons.
The AIDA model was developed to represent the stages a salesperson must take a customer through in the personal selling process (Strong, cited in Belch & Belch 2004). This model depicts the buyer as passing successively through attention, interest, desire, and action. The hierarchy of effects model was developed by Lavidge and Steiner (1961) showing the process by which advertising works. It assumes that ‘a consumer passes through a series of steps in sequential order from initial awareness of a product or service to actual purchase’ (cited in Belch & Belch 2004, p. 148). Consumers change their minds about a product, then they change their attitude, and then they act. In other words, the process begins with cognition, which translates to affect, which then translates to behaviour.
Arguments about the Hierarchy Model of Advertising EffectsIn Weilbacher’s article ‘Point of View: Does Advertising Cause a Hierarchy of Effect’ (2001), the author argues that ‘hierarchy of advertising effects models do not provide an accurate description of how advertising works and the effects of advertising’ (p. 19), and therefore it is unlikely to be used as a framework for measuring the true effects of advertising. In contrast, Barry (2002) in the article titled ‘In Defense of the Hierarchy of Effects: A Rejoinder to Weilbacher’ supports the concept of a hierarchy as a major guideline for advertising practice and research. The author adds that the marketing literature continues to embrace the hierarchy of advertising effects formulation as a basis for measuring the effects of advertising.
To begin with, there has been significant discrepancy regarding the explanation of advertising’s role among advertising researchers. According to Weilbacher, success or failure of advertising has always depended primarily on the ultimate sales when citing that ‘advertising– if it is successful– ultimately results in the sale of the product or service advertised to at least some of the consumers that have been exposed to the advertising. If such sales do not happen, the advertising is judged not to have been effective’ (p. 19). Meanwhile, others have regarded advertising as the communication process that attracts customer’s attention or features the product that will satisfy their needs. For example, it is proposed by Gallup (1974) that ‘advertising performs a vital communications function. It brings to buyer’s attention a product or service that will meet their needs. It tells buyers about the particular features of the product as opposed to other products’ (p. 7). Therefore, these dissimilar goals of advertising have reflected differences in approaching the way in which the effectiveness of advertising measured.
In terms of the hierarchy of advertising effects model, its basic premise is that advertising effects occur over a period of time (Lavidge & Steiner 1961) and ‘advertising communication may not lead to immediate behavioral response or purchase; rather, a series of effects must occur, with each step fulfilled before the consumer can move to the next stage in the hierarchy’ (Belch & Belch 2004, p. 148). Despite the fact that the hierarchy of advertising effects model of how advertising works has been around in the literature of marketing for a long time, Weilbacher (2001) claims it as an intuitive, non-validated explanation of how advertising works.
Weilbacher (2001) argues that there is an inconsistency in the hierarchy models of advertising effects in terms of multiple advertisements’ effects and competitive hierarchical interactions. Primarily, the hierarchy of effects is fragile, rewarding the relation of any consumer to any particular brand:
The model implies an immutable connection between a brand’s advertising and the prospective customer. But consumers, after all, live in a world of multiple brands within particular product/service categories and multiple advertisements for each of the individual brands within the category (Weilbacher 2001, p. 21).
In addition to competitive hierarchical interactions, the hierarchy of advertising effects for any one brand must be in constant competition with all the other brands’ in the category since each brand attempts to move the individual consumer along the brand’s own hierarchy.
As mentioned by Weilbacher (2001) in his article, the crucial conceptual weaknesses of the hierarchy model of advertising effects result in its intuition and non-validation. First, the hierarchy is relevant only to advertising. In some marketing situations, advertising alone may occasionally cause sales for some brands, but in the majority of marketing situations, sales are caused by a combination of marketing factors such as superior product, availability of distribution and competitive price, as well as an effective total program of marketing communications including, but not limited to, advertising. Second, the hierarchy models of advertising effects are based on a suspected model of human thought processes. Advertising is regarded as a distinct stimulus that ultimately leads through a rigid series of stages or steps to the eventual response of a consumer brand selection or purchase. However, ‘it completely ignores the broad store of information and experience that is always available to a consumer prior to and after advertising exposure as he/she thinks about or actively makes brand purchases’ (Weilbacher 2001, p. 22). Finally, the hierarchy models suggest that all advertisements affect consumers in the same ways, since the nature of hierarchy models of advertising effects is that every advertisement works in exactly the same way as every other advertisement.
Weilbacher (2001) concludes that crucial understanding of the effects of marketing communications, including advertising, may be illusive, because the understanding of the brain and how, exactly, it interacts with its environment based on the cognitive science is now not clear. He also suggests a new thinking toward an extension of the hierarchy of effects model to all the communications activities called “integrated marketing communications” should be approached.
At the same time, in his article, Barry (2002) believes that the hierarchy model remains important and valuable, although some of Weilbacher’s concerns are valid and should continue to be debated.
In terms of a single hierarchy model with one chronological sequence, Barry (2002) points out that ‘Weilbacher is right to challenge this sequencing’ (p. 44) but until now there have not been any alternative hierarchies. According to Barry (2002), this model has been rational and regarded as a guideline. Because the lack of explicit validation of the model is not a major problem, the key point ‘lies in the complexities of the measurement process to understand how people process information, form attitudes, and behave as a direct result of that information processed and those attitudes formed’ (p. 45). Thus, the model is still perceptive and rational as a result of its logic.
Unlike Weilbacher’s argument that the hierarchy model is relevant only for advertising and not for other marketing communications components, Barry (2002) argues that one can apply the concept of cognition, affect, and conation to many marketing communication. ‘The goal of all marketing communications is persuasion,… [so] all marketers send information to customers and prospects in the hopes of persuading them to do something’ (p. 44). In most cases, people have to process, value that information in positively or negatively manner, and then behave or not behave in some way. Hence, the hierarchy model is an appropriate framework for any of these forms of marketing communication.
And finally, Barry (2002) observes that there is no evidence that all advertisements have the same effect on all consumers reached, which differs from Weilbacher’s argument. Actually, ‘the concept of segmentation tells [marketers] that audiences are indeed different, even within relatively homogeneous segments’ (p. 45). Every advertising message that reaches an individual consumer affects that consumer differently, based in part on that consumer’s tendencies toward the product category and/or brand. All of these individuals reached have different preferences to process information, ‘form or change attitudes, and behave or not behave as a result’ (p. 45).
In all, points of view of the two authors suggest that there are many implications, as well as calls for action on further research to examine the hierarchy model and develop different hierarchical models for various consumer decision making situations.
Implications for Integrated Marketing CommunicationsEven though there are still arguments among advertising academics and practitioners about the theory of how advertising works, the hierarchy of effects models are clearly practical. There is no doubt that they bring some implications for marketers such as helping to predict behaviour regardless of how imperfect those predictions are, providing ‘practitioners information on where advertising strategies should focus (cognition, affect, or conation) based on audience or segment experiences’, and eventually providing ‘planners with a good planning, training, and conceptual tool’ (Barry & Howard, cited in Barry 2002, p. 46).
In fact, the hierarchy models are an appropriate framework for any of these forms of communication (Barry 2002; Belch & Belch 2004). They are useful to promotional planners from several perspectives. They describe ‘the series of steps potential purchasers must be taken through to move them from unawareness of a product or service to readiness to purchase it’ (Belch & Belch 2004, p. 149). Then, ‘potential buyers may be at different stages in the hierarchy, so the advertisers will face different sets of communication problems’ (p. 150).
Furthermore, the hierarchy models can also be useful as intermediate measures of communication effectiveness (Belch & Belch 2004). The marketer needs to know where audience members are on the response hierarchy. For example, it may suppose that:
… one target segment has low awareness of the advertiser’s brand, whereas another is aware of the brand and its various attributes but has a low level of liking or brand preference. For the first segment of the market, the communication task involves increasing the awareness level for the brand. The number of advertisements may be increased, or a product sampling program may be used. For the second segment, where awareness is already high but liking and preference are low, the advertiser must determine the reason for the negative feelings and then attempt to address this problem in future advertising (Belch & Belch 2004, pp. 149-150).
Nevertheless, some recent reviews of the empirical literature indicate the fragile existence of the hierarchy model and suggest that alternatives should be approached. For example, in their comprehensive review of relevant articles, Vakratsas & Ambler (1999) find little evidence to support the existence of an advertising hierarchy and they note that in trying to understand the response process and the manner in which advertising works, there are three critical intermediate effects between advertising and purchase (see appendix, figure 1). These include cognition- the “thinking” dimension of a person’s response, affect- the “feeling” dimension, and experience- which is a feedback dimension based on the outcomes of product purchasing and usage. Individual responses to advertising ‘are mediated or filtered by factors such as motivation and ability to process information, which can radically alter or change the individual’s response to advertising’ (p. 43). They suggest that the effects of advertising should be evaluated using three dimensions, with some intermediate variables being more important than others, depending on factors such as the product category, stage of the product life-cycle, target audience, competition, and impact of other marketing mix components (Vakratsas & Ambler, cited in Belch & Belch 2004).
Similarly, Hall (2002) argues that ‘advertisers need to move away from explicit and implicit reliance on hierarchical models of advertising effects and develop models that place affect and experience at the center of the advertising process’ (p. 23). The implication of these criticisms is that marketers should focus on cognition, affect, and experience as critical variables that advertising may affect. However, they should not assume a particular sequence of responses; but rather engage in research and analysis to better understand how advertising and other forms of promotion may affect these intermediate variables in various product/market situations.
In terms of the integrated marketing communication program, it is the responsibility of planners to learn as much as possible about their target audience and how it may respond to advertising, along with other forms of marketing communication. As Weilbacher (2001) noted, marketing communications programs include more than just advertising. Consumers are continually immersed in brand-sponsored communications that include public relations, a broad range of sales promotion activities, websites, direct marketing, event sponsorships, movie and television show product placements, and other forms of marketing communication. Hierarchy models must move beyond just explaining the effects of advertising and consider how, and with what effects, consumers synthesize information from all the various integrated marketing communications activities for a brand.
ConclusionFrom the well-known AIDA model to the recent alternative models, the hierarchy models of effects have been conceived as a managerial framework in advertising literature. They have a similar ordering of three stages: cognitive development precedes affective reactions, which precede behavior (Yoo, Kim & Stout 2004). It might be assumed that consumers become aware of and knowledgeable about a brand, develop feelings toward it, form a desire or preference, and then make a purchase. This logical progression is often accurate, the response sequence (cognitive, affective, behavioral), however, does not always operate this way (Belch & Belch 2004). The several alternatives to the original Lavidge and Steiner’s model suggest that advertising researchers have developed different hierarchical models for various consumer decision making situations. Moreover, to better understand the power of advertising, how it works alone, and how it complements other marketing communications tactics are challenges for further research.