Introducing a new, home-based service business into a local competitive market requires a clear understanding of how the unique characteristics of a home based service business and the consumer decision making process (buyer-readiness stages) affect the initial promotion mix decision. This paper concludes with a practical discussion of appropriate promotion ideas for new, home-based service businesses.
Currently, more than 15 million work home business owners operate full-time businesses from their homes. In addition, another 13 million operate part-time home- based businesses. Not only can having a home-based business reduce operating expenses, it also offers one the opportunity to work at his or her own pace and hours.
But despite their growing popularity, home business work people are, in some instances, not taken seriously. The impression held is that a home-based business person is only playing at being in business. This can be especially true of new, home-based service businesses; their lack of a tangible product makes them vulnerable to questions concerning their quality. In fact, competitors can take advantage of this aspect by adopting a competitive strategy that portrays the home-based business as lacking in experience and stability.
The purpose of this guide is to describe the ways in which a new, home-based service business is unique and propose ways in which such a business can effectively position itself among competitors who are serving the same local market. In particular, this paper deals with home-based businesses in which there is no face-to-face customer contact within the home. And because promotional strategies emphasizing purchase are fruitless unless the consumer is cognizant of the service, this paper will further focus on the initial buyer-readiness states of awareness and knowledge.
UNDERSTANDING THE NATURE OF Work Home Businesses SERVICE BUSINESS
There are typically four characteristics associated with a work home business that provides a service: intangibility, inseparability, and variability, and perishability. Each of these characteristics are also true of a home-
based service business. But the first two traits, intangibility and inseparability, seem to create particular problems for the home-based service business.
The characteristic of intangibility implies that it is impossible for a customer to see or touch what the service business has to offer. Therefore, it is generally difficult to know prior to purchase the quality of the service. This difficulty is compounded for the home-based service business if the business does not offer a physical location in which to interact with a customer. Even those owners who want to provide space for customer interaction are often stymied by zoning laws. Yet in non-home- based businesses, aspects of a company's physical location are often used as substitutes for a tangible product: The face of the building, the signage, and the interior decor are all capable of subtly telling a customer that a business is stable, reliable, and professional. Many home-based businesses do not have this opportunity.
The second difficulty that a home-based service businesses faces is related to the trait of inseparability: It is commonly suggested that the service provided by a business cannot be separated from the person who provides it. (4) This implies that the visibility of the service provider is key to the success of the business. So without a physical location within the business community, the home-based business person even lacks the daily opportunities for personal interaction--the visibility--that simply going to and leaving from a non-home-based business would provide.
FOCUSING ON THE PROPER HOME BUSINESS WORK PROMOTION MIX
To overcome the difficulties inherent in being a home-based service business, one must carefully analyze the opportunities for counteracting these difficulties in each stage of the consumer decision making process. The Hierarchy-of-Effects Model suggests that the stages through which a consumer passes are awareness, knowledge, liking, preference, conviction, and purchase. Of particular importance to this discussion are the initial stages of the process in which the owner of a new, home-based service business must seek a cognitive response from the potential consumer. In a study by Wilson and Hainault, it was found that non-users of a service had lower perceptions of quality than did users. Therefore, image characteristics must be conveyed to the target market early in the decision process. The business must design a promotion strategy that creates visibility and communicates clearly the traits of experience, reliability, and professionalism so as to move the target audience through those initial buyer-readiness stages of awareness and knowledge.
Communicating to potential customers can be done through the use of several promotion tools: advertising, personal selling, sales promotion, and public relations. Selecting the proper promotion mix--the combination of tools to be used--requires a matching between the stage of buyer-readiness and the tool or tools most appropriate for that stage. According to Kotler in Marketing Management, advertising and public relations are the tools considered most effective in the early stages of buyer-readiness. (4)
THE INITIAL PROMOTION STRATEGY FOR THE NEW Home-Based SERVICE BUSINESS
What does this mean then for the new, home-based service business? Consider, for example, a carpet cleaning service. A strategy that begins with a sales promotion tool such as a coupon may have less than the desired results. Certainly there will be some responses from price sensitive consumers. But the target market as a whole will not react because they have no knowledge of the company; the business has no image that will portray to potential customers the company's experience at carpet cleaning, its reliability, or the quality of its work.
To demonstrate how the selection of the promotion mix should be applied to create the appropriate image for a new, home-based business, three home-based scenarios have been developed--a furniture re-upholsterer, an accountant, and a house and pet sitter. Each example will (1) focus on counteracting the difficulties that stem from the service characteristics, intangibility and inseparability, and demonstrate the use of advertising and public relations as methods for moving the target audience through the awareness and knowledge stages of buyer-readiness.
A furniture re-upholsterer has the opportunity to create a substitute for a tangible product in the vehicle he or she drives. While a new vehicle certainly seems to say "prosperous," every home-based business owner cannot afford to purchase a new vehicle. A used vehicle can be an effective tool if it is clean (inside and outside) and if it has professional signage displaying the company's logo, name, and phone number. In a sense, the vehicle takes the place of the office and furnishings of a non-home-based business.
In addition, a furniture re-upholsterer should pay attention to personal dress and grooming as the appearance of the re-upholsterer conveys a strong message to the potential buyer. In his Model of Service Perceptions, Gronroos points out that functional quality (attitudes, behaviors, appearances) has an impact on a company's image just as technical expertise or quality does. A uniform or clean work clothes, then, can speak volumes about the care a re-upholsterer will give someone's furniture. Of course we all know someone who is really good at what he or she does, but the person's grooming and dress habits don't reflect that expertise. Poor appearance can be overcome, but it takes time; it takes considerable word of mouth about one's abilities to overcome one's idiosyncrasies. Why waste that time in getting the business off the ground?
Other ways to generate awareness and knowledge include the following: One possibility is to rent space at a home and garden show. The business owner could reupholster an item throughout the duration of the show and give advice freely to questions asked. The re-upholsterer will have gained visibility, created a substitute tangible product (the item being reupholstered), and promoted his or her level of expertise.
A second possibility is to offer to teach a continuing education class in reupholstering at the local community college. In general, "teacher = expert" in the minds of consumers. Students in the class become potential customers for more difficult reupholstering jobs they might have; and word-of-mouth referrals from the students are also likely to occur.
A third idea for establishing the image of a new, home-based re-upholsterer would be to contact an established antique dealer and offer to reupholster something in return for referrals or the opportunity to display business cards at the dealer's shop. This possibility is especially important because it puts knowledge of the reupholsterer's abilities in the hands of an opinion leader, someone from whom others might seek advice.
A new, work home businesses accountant has even more difficulty demonstrating the quality of his or her work than does the re-upholsterer A finished chair can always be shown to a potential customer. But what can an accountant show? Creating an image of tangible quality is much more difficult.
So the accountant must focus on the things that represent the service provided. That means a well-designed logo that appears on quality stationery, business cards, and brochures. (These items are important to all three of the service businesses discussed herein, but are particularly important to the accountant.) The accountant must also focus on the characteristic of inseparability and recognize that his or her every move reflects upon the business.
Potential ideas for creating awareness and knowledge in the target audience are as follows: The accountant could use the repetition that advertising provides by placing a multiple-time ad in the newspaper. The ad should announce the opening of the business and stress the experience, training, and specialty of the owner. A picture of the accountant will help the target audience attach a visual image to the company name. The accountant should not expect instant phone calls as this ad is strictly for building awareness.
To emphasize the experience of the accountant, he or she could undertake a variety of activities: offer to write a column for the local Chamber of Commerce newsletter; offer to give free lectures or seminars to Chamber or other civic organization groups; and submit a news release for the newspaper's Business or Personnel Update column that indicates recent continuing education course work or seminars taken.
To initiate word-of-mouth communication about the quality of the his or her work, the accountant could donate his or her services to a highly visible nonprofit organization.
A firm foundation of trust is required to allow a stranger into one's house when no one is at home. This trust can be built from two perspectives: opportunities for personal interaction and comments spread word-of-mouth by opinion leaders. So a newly established house and pet sitter would want to look for opportunities to display his or her trustworthiness to potential customers in whatever arena possible. This might mean doing volunteer work with a nonprofit organization, working on Chamber committees, etc. Responsibility displayed in one situation leaves the impression that one will be responsible in other situations.
One way to initiate word-of-mouth communications is for the sitter to donate his or her services to a fund-raising auction such as one held for a public television station. This allows not only awareness exposure during the auction but also a chance to demonstrate the quality of the services provided.
The house and pet sitter might also use the technique Pike calls "farming." A take-off on segmenting, farming involves concentrating on a specific
neighborhood. The sitter could go door-to-door introducing himself or herself and handing out flyers. In addition, the sitter could stage a cutest and ugliest dog contest in a nearby park where his or her image as a person who likes and gets along well with animals is clearly exhibited. Both the door-to-door activity and the dog contest give the sitter opportunities for personal, trust-building interaction with the target audience.
The foregoing discussion centered upon the initial promotion strategy that is necessary for a new, home-based service business to undertake to begin building its image. Obviously, the promotion strategy cannot stop there. Additional uses of the promotional tools must be added to the promotion mix as some members of the target audience move past the awareness and knowledge stages. This means that the promotion mix will then include the use of tools that appeal to potential customers at all stages of the buyer- readiness process. The key issue, though, for a new, home based service business is recognizing the starting point. Creating a promotion mix that has appeal for consumers in all stages of the buyer-readiness means that money has been wasted on inappropriate techniques. The message is clear: The consumer goes through successive steps prior to making the decision to purchase. Focusing on the initial stages of the consumer decision making process lays the groundwork for the success of future promotional tools.
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