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Services and Nonprofit Organization
Marketing
Key Concepts
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
How Services Differ from GoodsHow Services Differ from Goods
What are the differences between services and goods?
How Services Differ from Goods
IntangibleIntangible
InseparableInseparable
HeterogeneousHeterogeneous
PerishablePerishable
How Services Differ from Goods
IntangibilityIntangibility
Search Qualities
Experience Qualities
Credence Qualities
Components of Service Quality
TangiblesTangibles The PHYSICAL EVIDENCEof a service.
The PHYSICAL EVIDENCEof 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.
Marketing Mixes for Marketing Mixes for ServicesServices
Develop marketing mixes for services
Product Strategies for Services
ServiceMix
Standardizationor
Customization
Core andSupplementary
Process
Service as a Process
Mental StimulusProcessing
Mental StimulusProcessing
People Processing
People Processing
PossessionProcessing
PossessionProcessing
InformationProcessing
InformationProcessing
The Service Factory
Possession processing
Mental-stimulus processing
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 SUPPORT
or ENHANCE the core service.
A group of services that SUPPORT
or ENHANCE the core service.
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
Customization/Standardization
A strategy that uses
technology to deliver
CUSSTOMIZED
SERVICES on a
MASS basis.
MassCustomization
MassCustomization
The Service Mix
Determine what new services to introduce
Determine target market
Decide what existing services to maintain and to eliminate
Place (Distribution) Strategy
SchedulingScheduling
LocationLocation
Direct or indirect distribution
Direct or indirect distribution
Number of outletsNumber of outlets
ConvenienceConvenience
Promotion Strategy
Stress tangible cues
Use personal information sources
Create a strong organizational image
Engage in postpurchase communication
Price Strategy
Pricing Challenges for Services
Define the unit of service consumption
Determine if multiple elements are “bundled” or priced separately
Pricing Objectives
Revenue-OrientedPricing
Operations-OrientedPricing
Patronage-OrientedPricing
Maximize the surplus of income over costs
Match supply and demand by varying price
Maximize the number of customers by varying price
Marketing Mixes for Services
PLACEPLACE PROMOTIONPROMOTION PRICEPRICEPRODUCT
= SERVICE
PRODUCT =
SERVICE
ProcessProcess
Core and Supplementary
Core and Supplementary
Mass Customization
Mass Customization
StandardizationStandardization
Number ofoutlets
Number ofoutlets
DirectDirect
IndirectIndirect
LocationLocation
Tangiblecues
Tangiblecues
Personalinformation
Personalinformation
Strong imageStrong image
Post-purchasecommunication
Post-purchasecommunication
Revenueoriented
Revenueoriented
Operationsoriented
Operationsoriented
Patronageoriented
Patronageoriented
Internal Marketing
Internal Marketing
Internal Marketing
Treating employees as customers and developing systems and benefits that satisfy their needs.
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.
Nonprofit Organization Marketing
Government
Museums
Theaters
Schools
Churches
Nonprofit Organization Marketing
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
Nonprofit Organization Marketing
Identify desired customersIdentify desired customers
Specify objectivesSpecify objectives
Develop, manage, eliminate programs and servicesDevelop, manage, eliminate programs and services
Decide on pricesDecide on prices
Schedule events or programsSchedule events or programs
Communicate their availabilityCommunicate their availability
Unique Aspects of Nonprofit Organization Marketing Strategies
Setting of marketing objectives
Selection of target markets
Development of marketing mixes
Objectives
Provide services that respond to the wants of :
Users
Payers
Donors
Politicians
Appointed officials
Media
General Public
Target Markets
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
Product Decisions
Distinctions between Business and Nonprofit Organizations
Benefit complexity
Weak or indirect benefit strength
Low involvement
Promotion Decisions
Sales promotion activities
Public service advertising
Professional volunteers
Pricing Decisions
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
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
MARKETING OF FAMILY PLANNING SERVICES & AIDS PREVENTION
The special case of
CABBAGES AND CONDOMS
program in Thailand