Branding Technical Services - a case study on SWECO’s brand

Undergraduate

 

Abstract

The economical structure has faced a great change during the last decades; the service industry has grown into a dominant force in the developed countries. Therefore, the concept of services marketing is relatively new. Although more and more service companies are realizing the importance of marketing and branding, there are still technical service companies that has not adapted the concept. The consultancy firm SWECO, which will serve as a case study, is one of them.

The purpose with this essay is to examine the importance of branding for technical service firms and how they do to improve their image and brand. The research issue has been studied with the assistance of electronic surveys. As further assistance, three theoretical models has been used as instruments for the analysis.

The study shows that SWECO is a relatively unknown company. Although the company is operating in an international arena, it has not developed a marketing strategy. The conclusions attained demonstrate the importance of creating strong brands for technical service companies since the 7 P’s of services are insufficient as marketing tools. The highly perceived quality of the company’s services and their financial strength give the company good prerequisites for marketing their brand internationally.


 BACKGROUND

Palmer & Hartley (2002) divide the structure of economy into three main sectors, the first being the primary sector which is concerned with the extraction and production of basic raw materials from agriculture and mining. This is followed by the secondary sector which transforms the outputs from the primary sector into goods and products. The third category is the service sector, which has become a dominant force in the economy of many western countries and has created a wealth of new jobs. The growth of the service sector is a trend foremost in the OECD countries, and it accounts for about three-quarters of all employment in the United States, United Kingdom, Canada and Australia. The European Union has reportedly created 1.3 million new jobs per year between 1980-1992 (Eurostat, 1995).

Not all parts of the service sector have expanded though. It is, primarily, the knowledge- and information intensive (technical) services whose importance has increased. Yet, it was not until the 80s that emphasis was put on services marketing whose primary objective is to build and develop customer relations (Arnerup-Cooper, 1998). Grönroos (1990) concludes that “marketing is the business task of establishing, maintaining, and enhancing relationships with customers and other parties defined as stakeholders at a profit so that the objectives of all parties involved are met”. Echeverri and Edvardsson (2002) establish that services marketing has become a well-known area and that the subject has matured into a central and growing part of marketing among enterprises and organizations.

A relation oriented view on marketing puts emphasize on a long-term time perspective. The importance of price decreases as customer loyalty is accentuated by creating an added value.

The decision-making criterion of the buyer has, first and foremost, its foundation in the longterm value of the buyer-seller relationship (Arnerup-Cooper, 1998), with other words building customer loyalty. Simões and Dibb (2001) clarify that increased loyalty to the company is a benefit appreciated due to corporate brands, among other benefits such as communicating brand values and differentiation from competitors, while Calderón, Cervera and Mollá  (1997) argue that brands are the best asset a firm can posses as added value and long-term association can be achieved by a company with its customers. Grönroos (2000) defines brand as “a name, term, sign, symbol or any other feature that identifies one seller’s product or service as distinct from those of other sellers”, and Doyle supplements the definition with “having a sustainable differential advantage”. Furthermore, “a brand is a collection of perceptions in the mind of the consumer.” Cooper (1999) explains that brands “are not just simple measurable “things”, but “balances” of complementary features which meet consumers’ rational, emotional, social and cultural needs”.

It was not until a century ago the first brands in a modern sense were developed. Branding and brands became central issues in marketing during the second half of the 20th century, and during the last ten years awareness of the importance of creating service brands has emerged. Nowadays branding is a very important issue for service companies. Establishing brand awareness and a positive brand image in consumer’s minds produces the knowledge structures that can affect consumer response and generate customer-based brand equity (Keller, 2003). Kotler (2002) acknowledges that a brand with a atrong brand equity is a valuable asset.

1.1  PROBLEM DISCUSSION

As highlighted above, the knowledge and information intensive and technical services’ sector has been through a great expansion; according to Lovelock et al. (1999) the service sector accounts for over two-thirds of developed economies’ GDP. De Chernatony and Segal-Horn (2003) explain that even though there is much published about the differences between products and services, it is not to a great value when attaining to successfully develop services brand.

The uniqueness with services are their relative intangibility – services cannot be touched, stored or acquired - which often is used to distinguish services from goods with a physical presence. Branding culture is not strongly embedded in service firms (Kapferer, 1992) and, therefore, branding is not widely used in services marketing as in the marketing for more tangible items (Dibb and Simkin, 1993). However, as Doyle (1989) stated regarding building successful brands, “service is perhaps the most sustainable differential advantage”. While products easily can be copied by competitors, services are much harder to copy since they are highly depending on the culture of the company and the training and attitudes of its employees (Doyle, 1989).

Nelson (1970) and Darby and Karni (1973) mention a three-fold classification of goods which has been accepted as a discipline of services marketing (Moorthi, 2002). Accordingly, these three classifications of goods are:

1.search goods; 2.experience goods;

        3.   credence goods.

While products have more search properties, Zeithmal and Bitner (1996) argue that services have more experience and credence properties. In the further discussions, only the differences between search goods and credence goods will be highlighted. Since this essay deals with technical and information intensive services (credence goods), experience goods (services provided by e.g. restaurants, hotels and airlines) will be mentioned briefly.

Having clarified the diversity of goods and services, the 7Ps of services marketing is to be highlighted, since the traditional four Ps of McCarthy – product, price, place, promotion – are insufficient considerations when marketing services and services business. A service’s marketing mix consists of 7Ps (product, price, place, promotion, physical evidence, process and people) (Lovelock and Wirtz, 2004).