1Chap. 11 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Services and...

Services andServices andNonprofit Organization MarketingNonprofit Organization Marketing

Prepared byPrepared byDeborah BakerDeborah Baker

Texas Christian UniversityTexas Christian University

Chapter 11

Learning ObjectivesLearning Objectives

1.1. Discuss the importance of services to the economy.

2. Discuss the differences between services and goods.

3. Describe the components of service quality and the gap model of service quality.

Learning Objectives Learning Objectives (continued)(continued)

4. Develop marketing mixes for services.

5. Discuss relationship marketing in services.

6. Explain internal marketing in services.

Learning Objectives Learning Objectives (continued)(continued)

7. Discuss global issues in services marketing.

8. Describe nonprofit organization marketing.

Learning Objective Learning Objective

Discuss the importance of services to the economy.

On Linehttp://www.yellowfreight.com

ServiceService

The result of applying

human or mechanical

efforts to people or objects.

The Importance of ServicesThe Importance of Services

79% of workers are inservice sector

Services account for 76% of U.S. GDP

Service occupations will be responsible for all net job

growth through 2005

Service occupations will be responsible for all net job

growth through 2005

Service-Producing IndustriesService-Producing Industriesand Job Growthand Job Growth

Discuss the differences between services and goods.

On Linehttp://www.sheraton.com

How Services Differ from How Services Differ from GoodsGoods

Services Are Intangible Performances

Services Are Produced and Consumed Simultaneously

Services Have Greater VariabilityServices Have Greater Variability

Services Are PerishableServices Are Perishable

22On Linehttp://www.nationalamusements.comhttp://www.amctheatres.comhttp://www.movietickets.com

On Linehttp://www.nationalamusements.comhttp://www.amctheatres.comhttp://www.movietickets.com

Describe the components of service quality and the gap model of service quality.

Components of Service Components of Service QualityQuality

TangiblesTangibles The physical evidence of a service.

The physical evidence of a service.

EmpathyEmpathy Caring, individualized attention to customers.Caring, individualized attention to customers.

AssuranceAssurance The knowledge and courtesyof employees.

The knowledge and courtesyof employees.

ResponsivenessResponsiveness The ability to provideprompt service.

The ability to provideprompt service.

ReliabilityReliability The ability to perform the service right the first time.The ability to perform the service right the first time.

The Gap Model of Service The Gap Model of Service QualityQuality33

Develop marketing mixes for services.

Marketing Mixes for ServicesMarketing Mixes for Services

Product Product (Service)(Service)StrategyStrategy

Product Product (Service)(Service)StrategyStrategy Mental StimulusMental Stimulus

ProcessingProcessingMental StimulusMental Stimulus

ProcessingProcessing

People People ProcessingProcessing

PossessionPossessionProcessingProcessing

InformationInformationProcessingProcessing

Core and Supplementary Core and Supplementary ServicesServices

CoreServiceCore

Service

SupplementaryService

The most basic benefit the consumer is buying.

A group of services that supportor enhance the core service.

Core and Supplementary Core and Supplementary ServicesServices

for FedExfor FedEx

Overnight Overnight transportation transportation and delivery and delivery of packagesof packages

Problem solving

Billing statements

TracingDocumentation

Order taking

Supplies

Pickup

Advice andinformation

Mass CustomizationMass Customization

A strategy that uses

technology to deliver

customized services on a

mass basis.

Mass CustomizationMass CustomizationC

CustomizedCustomizedFocusFocus

StandardizedStandardizedFocusFocus

CostCost

MassMassCustomizationCustomization

Service Mix StrategyService Mix Strategy

Determine what new services to introduce

Determine target market

Decide what existing services to maintain and/or eliminate

Distribution Strategy IssuesDistribution Strategy Issues

SchedulingScheduling

LocationLocation

Direct vs. Indirect Distribution

Number of OutletsNumber of Outlets

ConvenienceConvenience

Focus forFocus forDistribution Distribution StrategiesStrategies

Promotion Strategy IssuesPromotion Strategy Issues

Stress tangible cues

Use personal information sources

Create a strongorganizational image

Engage in postpurchase communication

ServiceServicePromotion Promotion StrategiesStrategies

Price StrategyPrice Strategy

Pricing Pricing ChallengesChallenges

Trends have Trends have made pricing an made pricing an

active component active component

Trends have Trends have made pricing an made pricing an

active component active component

Define unit of Define unit of service consumptionservice consumption

Determine if multiple Determine if multiple elements are “bundled”elements are “bundled”Determine if multiple Determine if multiple

elements are “bundled”elements are “bundled”

Pricing ObjectivesPricing Objectives

Revenue-OrientedPricing

Operations-OrientedPricing

Patronage-OrientedPricing

Categories ofCategories ofPricingPricing

ObjectivesObjectives

Categories ofCategories ofPricingPricing

ObjectivesObjectives

44On Linehttp://www.etrade.comhttp://www.ameritrade.comhttp://www.schwab.com

On Linehttp://www.etrade.comhttp://www.ameritrade.comhttp://www.schwab.com

Discuss relationship marketing in services.

Relationship Marketing Relationship Marketing in Servicesin Services

Level 1Level 1FinancialFinancial

Level 2Level 2Financial, SocialFinancial, Social

Level 3Level 3Financial, Social, StructuralFinancial, Social, Structural

Three LevelsThree Levelsof of

Relationship Relationship MarketingMarketing

Explain internal marketing in services.

Internal MarketingInternal Marketing

Treating employees as

customers and developing

systems and benefits that

satisfy their needs.

Internal Marketing ActivitiesInternal Marketing Activities

StressingTeamworkStressingTeamwork

Competing for Talent

Offeringa VisionOfferinga Vision

TrainingEmployeesTraining

Employees

EmpowermentEmpowermentKnowing

Employees’ Needs

KnowingEmployees’

NeedsRewarding

PerformanceRewarding

Performance

InternalInternalMarketingMarketingActivitiesActivities

Discuss global issues in services marketing.

Global Issues in Global Issues in Services MarketingServices Marketing

FinancialFinancial

ConstructionConstruction

EngineeringEngineering

InsuranceInsurance

Hotel ChainsHotel ChainsU.S. is world’s U.S. is world’s

largest largest exporter of servicesexporter of services

Describe nonprofit organization marketing.

Nonprofit Organization Nonprofit Organization MarketingMarketing

An organization that exists

to achieve some goal other

than the usual business

goals of profit, market

share, or return on

investment.

Nonprofit OrganizationsNonprofit Organizations

GovernmentGovernment

Private MuseumsPrivate Museums

TheatersTheaters

SchoolsSchools

ChurchesChurches

Other Non-GovernmentOther Non-Government

Nonprofit Organizations

Nonprofit Organization Nonprofit Organization MarketingMarketing

Market intangible productsMarket intangible products

Production requires customer’s presenceProduction requires customer’s presence

Services vary greatlyServices vary greatly

Services can not be storedServices can not be stored

Shared Shared Characteristics Characteristics

with with Service Service

OrganizationsOrganizations

Shared Shared Characteristics Characteristics

with with Service Service

Nonprofit Organization Nonprofit Organization Marketing ActivitiesMarketing Activities

Identify Desired CustomersIdentify Desired Customers

Specify ObjectivesSpecify Objectives

Develop, manage, eliminate programs/services

Set pricesSet prices

Schedule eventsSchedule events

Communicate through advertising/PRCommunicate through advertising/PR

Unique Aspects of Nonprofit Unique Aspects of Nonprofit Organization Marketing StrategiesOrganization Marketing Strategies

Setting of Marketing ObjectivesSetting of Marketing Objectives

Selection of Target MarketsSelection of Target Markets

Development of Marketing MixesDevelopment of Marketing Mixes

On Linehttp://www.peta.com

Market ObjectivesMarket Objectives

Payers

Donors

Politicians

Appointed officials

General Public

Provide Services to:

Target MarketsTarget Markets

Apathetic or strongly opposed

targets

Apathetic or strongly opposed

targets

Pressure to adopt undifferentiated segmentation

Complementary positioning

Unique Issues Unique Issues of Nonprofitof Nonprofit

Product DecisionsProduct Decisions

BenefitComplexity

WeakBenefit Strength

Low Involvement

Distinctions betweenDistinctions betweenBusiness and NonprofitBusiness and Nonprofit

On Linehttp://www.adcouncil.org

Promotion DecisionsPromotion Decisions

Sales PromotionActivities

Public ServiceAdvertising

ProfessionalVolunteers

Pricing DecisionsPricing Decisions

Below-Cost PricingBelow-Cost Pricing

Separation BetweenPayers and Users

Indirect PaymentIndirect Payment

Nonfinancial PricesNonfinancial Prices

Pricing ObjectivesPricing Objectives

Characteristics Characteristics DistinguishingDistinguishing

Pricing DecisionsPricing Decisionsof Nonprofit of Nonprofit

Characteristics Characteristics DistinguishingDistinguishing

Pricing DecisionsPricing Decisionsof Nonprofit of Nonprofit

1Chap. 11 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Services and...

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