Is branding more important for services than for products?

Marketing writers concede that research on services brands/branding is limited. This article, therefore, looks at the concept of services-branding and will attempt to answer the question of whether or not branding is more important for services than for products.

The idea is not to juxtapose products and services-branding by listing similarities and differences, but rather to show somewhat the characteristics of products and services and draw out how they affect branding and/or the brand-building process.

Brand Promises

I tried, without success, to unearth real life examples of organisational brand building process(es) in Ghana. No dossier on branding has been sighted. What has been a permanent fixture is that banks, insurance, micro-finance, telecommunication and companies in various industries spend a fortune, it appears, on advertisements espousing the so-called ‘benefits’ of their various ‘brands’ as well as numerous sales promotions.

Without passing judgment, this is what I discovered in my research. Using the Internet in Ghana is extremely frustrating. The Internet service providers (ISPs) overpromised and continue to over-promise. I have patronised the services of all of them, thanks to my research work.

In those days, one of them promised providing ‘jet-speed’ access to the Internet but ended up delivering ‘snail-speed’ access. I would have said, thankfully, my organisation subscribes to a particular provider for broadband services – but for the fact that it is so lousy you do not know what to do with it. Surprisingly, they keep making a lot of noise by way of advertisements and promises.

Real research has provided ample evidence that customers expect performance not empty promises. Unfortunately, we are so used to mediocrity in Ghana that we hardly ever vote with our feet – or maybe our hard-earned cedis. It has always been a situation of take it or leave it in Ghana.

The Service Brand

The services industry has evolved to become the prime mover of most national economies these days. Some writers simply define services as deeds, processes and performances. They have traditionally suggested the following distinctive characteristics of products and services:

Products are tangible and homogeneous(standardised); services are intangible and heterogeneous. The production of products is clearly separate from the consumption thereof. Services are, however, simultaneously produced and consumed. Products are perishable while services are non-perishable.

It is widely agreed that the path to product branding is pretty much straight-forward. The same cannot be said of services branding. It is slightly different or more difficult on the operational level; that is, the execution techniques differ. Consumers have differing needs and changing preferences, and may also experience the service differently.

Implications for Branding

The differentiation of marketing offerings (products and services) is achieved by creating a brand and a brand identity for products and services. According to experts, a good brand is distinctive and memorable – without which a company cannot offer choice to consumers. One of the nuances of branding is that it is relational. What one is against, what the other is not; what one product is as opposed to what the other is not – what is termed “perspective of the other”. For example, we have Boeing vs Airbus; Apple vs Samsung; Hilton vs Marriot; Qatar Airways vs Emirates and many more.

What it means is that without distinctive branding, many service products would struggle to differentiate themselves in the face of stiff competition from rivals. Experts claim the intangibility of services makes it hard to get the “sharpness of differentiation”.

Brands help buyers identify specific products they do or do not desire, facilitating the purchase of preferred items and cutting out unnecessary time-wasting in shopping. The brand identity should make the offering more tangible and capable of simplifying consumers’ choice. This most service brands, especially financial services, fail to do.

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Brands aid buyers in evaluating product quality and give consumers a kind of psychological lift. There could also be a possible backlash in the event of product failure. It has been revealed that the brand creates the identity, which has values and salient characteristics – and this is what creates loyalty and repeat purchases. However, such values and personal characteristics are prevalent in product brands but rare in services brands.

Brand Loyalty

Brand loyalty is a valued component of a company’s brand equity, because it reduces a brand’s vulnerability to competitors’ actions. Brand loyalty helps a company to maintain its existing satisfied clientele, which saves it the cost of courting new customers. A study revealed that it costs six times as much to win new customers as to retain current ones. Loyal clientele ensures brand visibility for the organisation.

Brand Management

Careful thought must be given to the processes of choosing a brand name (nometrics), the protection of a brand, branding policies, brand licencing and the management of brands. A brand name ought to be easy to say, spell and recall. The name should give hints of the products’ major characteristics, uses and benefits.

There is a caveat, though, which is a good name, no matter what, cannot fix product deficiencies, poor distribution, ineffectual promotion, incorrect pricing and customer service that is not up to scratch. Neither can it withstand a competitor’s superior market offering. By the same token, a poor, inappropriate, confusing, unmemorable or misleading name can do much harm to an otherwise good product offering.

Invariably the brand of the service is the same as the company name (cf. the Coca Cola product which is also the name of the company). In view of this, a service marketer must use a symbol in addition to its brand name to distinguish the brand and create a certain image.

Brand Counterfeiting

One thorny issue has been brand-counterfeiting. There is almost fake everything in town. Undoubtedly, counterfeit products undermine consumer confidence and loyalty. This calls for branding policies and management as intimated earlier. Brands depreciate without further investment or due to lack of management. Without organiastional support to improve quality, service and image, a brand will decline or disappear.

The service brand starts with the core values of the organization, and then all the processes that result in customer preference and ultimately loyalty. One feature of a product brand is the idea of repeat purchases. In this, the service brand falls short in that there may not be alternatives and it would be too expensive – even deadly – to gamble with a lousy service. Fancy a repeat botched medical procedure.

Services should be such that they are not easy to copy. Unlike services (specialist services) products are easily duplicated by competitors. Services are influenced by the culture of the organisation, training and employee attitude. Service brands should be built on superior service. In looking to build a brand, the principle is to invest in highly differentiated markets where you can easily cut a niche for yourself. Differentiated market means that different segments are searching for different bundles of attributes and values. Products and services deliver bundles of benefits, but are received differently for services – which benefits are created through experience.

The Services Brand-Building Process

Some writers believe there are few valuable services brands available. And that while the differences between products and services have been widely played up, it is of little value in relation to the successful development of services brands. The path to building a service brand should incorporate concepts such as centrality of the service encounter; delivery of the service vision to consumers by service employees; responsiveness of front-line staff; empowerment of front-line staff, and reverse hierarchy.

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Experts regard the service brand as a ‘promise’. A promise of a particular experience, and hence the strategy for delivering this “promise” must be carefully thought through. Unlike product-based branding, the marketing department with its communication outfit is not the prime determinant of the services brand’s personality and positioning. Instead, the ‘customer-facing’ staff greatly influence brand perceptions. In this regard, service brand-building should be based on a bottom-up approach.

Information about the brand promise, service vision and customer expectations is communicated both internally and externally to ensure a consistent brand narrative. In addition, there must be in place a highly-coordinated service delivery system and organisational processes and procedures that encourage shared values, leading to a consistent services brand encounter. This is very important, because the brand is perceived by consumers as encompassing both the service’s quality and efficiency with which it is delivered.

The Service Environment (Servicescape)

Packaging and labelling are said to create differentiation by impacting on the image of products, functionality and customers’ perception of satisfaction. Services, unlike product packaging, are mostly fully integrated with the environment (the servicescape) in which the service is delivered. The servicescape sends signals about the nature and quality of the service brand. The development of a learning-enabled culture would make for continual improvement – leading to what is termed a ‘customer-delighting’ culture and experience.

 

Conclusion

To conclude, I want to ask whether the Graphic Communications Group Ltd. sells a product, products, or sells services? Well, all in all, I like the journalese of the Daily Graphic.

Marketing writers conclude that whatever distinguishing characteristics there are between products and services, they are but mere myths. At best, they are seen as hurdles or negative qualities of services to be overcome. In other words, services and products should not be kept apart because there are no pure services or products.

Practically all products have a service component and all services involve some form of tangible features, like health care. Surgery and diagnosis are services which cannot be seen or touched, although it is possible for the patient to see and touch certain tangible components of the service – like the equipment.

So, as to whether branding is more important for services than it is for products, it is a matter of standpoint. If products and services converge, as a product is anything that satisfies consumers’ needs, then the answer is no. If they are regarded as discrete, then branding for services needs to be taken a notch higher – as admitted by experts.

At the inception of the branding process there is a distinction between services and products, but at the end brands are defined by perceptual associations – in the minds of consumers. Branding is meant to fix the brand, brand identity and attributes in the minds of consumers. The concern, rather, is that service companies are failing to adopt appropriate branding principles – thereby continually providing inconsistent services.

I am very sure it would not be difficult for readers to find examples in Ghana. Service brands ought to be careful, because branding is all about relationships and a single very negative experience can drive away valuable customers. Termed the ‘moment of truth’, it will determine the continuation or discontinuation of service patronage.

 

The writer is an FCCA and has specialised in the Marketing of Services and Branding.

Email: georgeamankwaboateng@yahoo.com

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