Advertising and Communication in the Service Sector

Overview: Differences in Evaluating Service vs. Product

In class we talked about the differences in services and products, specifically that the intangibility of service products results in a different evaluation of services before they are purchased. Generally, products are much easier for consumers to evaluate before purchase than services are.

But the differences go further – it extends to communication and advertising. Sometimes companies struggle to communicate and overcome the difficulties posed by intangibility.

For many services it is difficult for companies to communicate/advertise the real benefits and with some services the difficulties are more dramatic than others e.g. – insurance, management consulting, legal services, investment services, advertising services, public relations, fitness – personal trainers…and hotels, restaurants.

As the service sector grows and competition increases many service firms are starting to advertise and promote their services more. It is not enough to simply create awareness. Many hospitality companies are advertising their services much more aggressively than ever before.

1. Select two hospitality companies (you need 2 actual companies) and search for samples of recent advertising – it could be traditional media like tv or magazines or digital media, social media. You need 3 examples for each company (for a total of 6 examples) and include the images of the ads found in your search. (5 Marks)

2. Identify and describe the strategies used in the ads to overcome the problem of intangibility. (5 Marks)

3. Which company in your view does a better job of overcoming the intangibility of its services and explain why? (5 Marks)

4. How does each company deal with the question of the service quality offered and the risk for the consumer in possibly making a wrong decision in selecting this company? (5 Marks)