Cultivating Service Brand Equity

This is a snapshot of an article called ‘Cultivating Service Brand Equity’ written by Leonard Berry in which he makes a case for service branding as a 'cornerstone of services marketing' for today and tomorrow after having researched 14 mature high-performance companies.

He talks about the differences in services and goods and the importance of branding in Services Marketing. He presents a service-branding model that highlights the importance of customers’ service experiences in brand formation. He discusses four primary strategies that excellent service firms use to cultivate brand equity.

So let’s start - how are services and goods different.

• In goods, the product is the primary brand. However, with services, the company is the primary brand.
• The sources of benefit where goods are concerned is again the product whereas for services its the people, facilities, equipment.
• The quality level in goods is uniform and in services its variable.

Services are essentially intangible there is nothing to see or search. There is no packaging, no labeling no display and this makes branding all the more essential. Branding is not just for tangible goods; it is a principal success driver for service organizations as well

Branding…

• Tangibilizes the intangible - it enables customers to better visualize and understand intangible products.
• It reduces customers’ perceived monetary, social and safety risks in buying services.
• Increases Trust. Strong brands are safe places for customers
• Provides Extrinsic cues - Cues such as image and reputation go a long way in adding value
• Strong-brand companies have high -mind share with targeted customers, which contributes to market share.

Berry also presents the Service Brand Model
Because services are essentially intangible, the branding of services is important and different from the branding of products. A strong brand offers many advantages in the service industry and when evaluating the strength of the brand, the concept of brand equity is used.


The presented brand is the company’s controlled communication of its identity through advertisement while the external brand communication refers to the information customers absorb about the company that essentially is uncontrolled by the company. These factors, combined with the customer’s experience, lead to increased brand awareness and brand meaning.

Brand meaning refers to the customer’s dominant perceptions of the brand, it is the snapshot of that immediately comes into the customer’s mind when exposed to a brand. It is the customer’s perception, the impressions and associations of the brand which gives that brand a special meaning to the customer. and hence differs from awareness, which is the level of knowledge the customers have about the brand. Both these factors put together lead to development of brand equity.

In services marketing, unlike in product marketing, it is the customer’s experience that plays a very important role and even if his services experience differs from the advertising message, he will go more by his experience. Thus, the main differentiating role is played by the service performance.

Brand equity is based on the extent to which the brand has high brand loyalty, name awareness, perceived quality and strong product associations it is put simply the value of a brand

So how do you build a service brand - Berry gives 4 strategies

Dare to be Different
Service companies with the strongest brands reveal a conscious effort to be different. The carve out a different path for themselves - a distinct personality that is unmistakably theirs. They stake a claim on the minds of their customers which is unique to them.They don’t imitate they innovate. E.g. Target, Starbucks.

Determine your own fame
They clearly define their reasons for being. They know what they are about and what they stand for. They differ from their competitors in all aspects. They provide a service that is valuable to the customer and they do it much more effectively than anyone else. Dial-A-Mattress

Make an Emotional Connection
Strong brands make an emotional connections with their customers which goes above and beyond the purely rational or economic one.
Howard Schultz says that the most powerful and endearing brands are made from the heart… their foundations are built with the strength of the human spirit not an ad campaign

Internalize the Brand
Service Performers are architects of brand meaning and equity. Its their actions with the customers that transform your brand vision into a reality. They can make or break a brand so it is crucial to teach, sell, and reinforce the desired brand to employees. They have to buy into you before external customers

CONCLUSION
Services differ from physical goods as they emphasize experience and credence qualities, which can only be judged after purchase or during consumption. There is no physical tangible reality that can be searched and tested.

In today’s business, service offering are integral and in the process of differentiating one self from competition effectively, branding services plays a pivotal role. Building a strategic relationship with the customer is very essential to the success of any business. Because of the growth of the services industry and increased competition, branding as become a tool for gaining competitive advantage

The use of brands has changed over the years and has developed from only representing the product’s name to now giving the product a deeper meaning (Murphy, 1992). It is no longer enough to brand a product just using its name, it is important that all the elements of the marketing mix are used in a consistent way in the marketing of the product.

When customers purchase a product, they usually pay for a solution to a specific problem. The advantage of a branded product is that the customer is willing to pay a premium price for the added values that the brand embodies. The branded product does not only satisfy the customer’s rational need, but also provides certain benefits that will satisfy emotional needs (de Chernatony & McDonald, 1998).

To develop service brands; appropriate brand architecture, brand positioning, program development are needed to deliver the brand and align the business system to the brand promise.

Services branding requires orchestrating clues to tell the service’s story