Chapter 11 Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 1

MKTG

Designed byAmy McGuire, B-books, Ltd.

Prepared byDeborah Baker, Texas Christian University

Lamb, Hair, McDaniel 2007-2008 Services

and Nonprofit Organization Marketing

11

CHAPTER

Chapter 11 Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 2

Learning Outcomes

Discuss the importance of services to the economy

Discuss the differences between services and goods

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

LO1

LO2

LO3

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Learning Outcomes

Develop marketing mixes for services

Discuss relationship marketing in services

Explain internal marketing in services

Discuss global issues in services marketing

Describe nonprofit organization marketing

LO6

LO5

LO7

LO8

LO4

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Discuss the importance of services to the

economy

The Importance of ServicesThe Importance of ServicesLO1

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LO1

Service

The result of applying

human or mechanical

efforts to people or

objects.

ServiceService

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REVIEW LEARNING OUTCOMELO1

The Importance of Services

10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

81%

Services as a percentage of GDP

10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

81%

Services as a percentage of employment

ServicesDeedPerformanceEffort

DeedPerformanceEffort

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Discuss the differences between services and goods

How Services Differ from GoodsHow Services Differ from GoodsLO2

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How Services Differ from Goods

LO2

IntangibleIntangible

InseparableInseparable

HeterogeneousHeterogeneous

PerishablePerishable

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How Services Differ from Goods

LO2

IntangibilityIntangibility

Search Qualities

Experience Qualities

Credence Qualities

Online

http://www.webmd.com

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Describe the components

of service quality and the gap model of service quality

Service QualityService QualityLO3

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Components of Service QualityLO3

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.

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LO4

The Service Offering

CoreServiceCore

Service

SupplementaryService

SupplementaryService

The most basic benefit the consumer is buying.

The most basic benefit the consumer is buying.

A group of services that supportor enhance the core service.

A group of services that supportor enhance the core service.

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LO4

Core and Supplementary Services for FedEx

Overnight Overnight transportation transportation and delivery of and delivery of

packagespackages

Problem solving

Billing statements

TracingDocumentation

Order taking

Supplies

Pickup

Advice andinformation

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Describe nonprofit organization

marketing

Nonprofit Organization Nonprofit Organization MarketingMarketing

LO8

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Nonprofit Organization Marketing

LO8

NonprofitOrganization

Marketing

NonprofitOrganization

Marketing

An organization that exists to achieve some goal other than the usual business goals of profit, market share, or return on investment.

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Nonprofit Organization Marketing

LO8

Government

Museums

Theaters

Schools

Churches

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Nonprofit Organization Marketing

LO8

Market intangible productsMarket intangible products

Production requires customer’s presenceProduction requires customer’s presence

Services vary greatlyServices vary greatly

Services cannot be storedServices cannot be stored

Shared Characteristics

with Service

Organizations

Shared Characteristics

with Service

Organizations

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Unique Aspects of Nonprofit Organization Marketing Strategies

LO8

Setting of marketing objectives

Selection of target markets

Development of marketing mixes

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Objectives

LO8

Provide services that respond to the wants of :

Users

Payers

Donors

Politicians

Appointed officials

Media

General Public

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Target Markets

LO8

Apathetic or strongly opposed

targets

Apathetic or strongly opposed

targets

Pressure to adopt undifferentiated segmentation

Pressure to adopt undifferentiated segmentation

Complementary positioning

Complementary positioning

Unique Issues of Nonprofit

Organizations

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Product Decisions

LO8

Distinctions between Business and Nonprofit Organizations

Benefit complexity

Weak or indirect benefit strength

Low involvement

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Promotion Decisions

LO8

Sales promotion activities

Public service advertising

Professional volunteers

Online

http://www.adcouncil.com

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Pricing Decisions

LO8 Below-cost pricingBelow-cost pricing

Separation betweenpayers and users

Separation betweenpayers and users

Indirect paymentIndirect payment

Nonfinancial pricesNonfinancial prices

Pricing objectivesPricing objectives

Characteristics Distinguishing

Pricing Decisionsof Nonprofit

Organizations

Characteristics Distinguishing

Pricing Decisionsof Nonprofit

Organizations

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REVIEW LEARNING OUTCOMELO8

Nonprofit Organization Marketing

TARGET• Apathetic or

strongly opposed• Undifferentiated

segmentation• Complementary

positioning

PRODUCT

PROMOTION

PLACE

PRICE

Professional

volunteersSales

Public ServiceAdvertising

Involvement

Benefitstrength

Benefitcomplexity

Specialfacilities

Nonfinancial

Indirect payment

Separation

Below costpricing