©2002 south-western chapter 11 version 6e1 chapter services and nonprofit organization marketing 11...
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Chapter 11 Version 6e 1©2002 South-Western
chapter
Services andServices andNonprofit Organization MarketingNonprofit Organization Marketing
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Prepared byPrepared byDeborah BakerDeborah Baker
Texas Christian UniversityTexas Christian University
Chapter 11 Version 6e 2©2002 South-Western
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Learning ObjectivesLearning Objectives
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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.
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Learning Objectives (continued)Learning Objectives (continued)
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4. Explain why services marketing is important to manufacturers.
5. Develop marketing mixes for services.
6. Discuss relationship marketing in services.
7. Explain internal marketing in services.
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Learning Objectives (continued)Learning Objectives (continued)
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8. Discuss global issues in services marketing.
9. Describe nonprofit organization marketing.
10.Explain the unique aspects of nonprofit organization marketing.
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Learning Objective Learning Objective 11
Discuss the importance of services to the economy.
Chapter 11 Version 6e 6©2002 South-Western
ServiceService
The result of applying
human or mechanical
efforts to people or objects.
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The Importance of ServicesThe Importance of Services
79% of workers are inservice sector
79% of workers are inservice sector
Services account for 76% of U.S. GDP
Services account for 76% of U.S. GDP
Service occupations will be responsible for all job growth
through 2005
Service occupations will be responsible for all job growth
through 2005
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Learning Objective Learning Objective 22
Discuss the differences between services and goods.
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How Services Differ from GoodsHow Services Differ from Goods22
IntangibilityIntangibility
InseparabilityInseparability
HeterogeneityHeterogeneity
PerishabilityPerishability
CharacteristicsThat
DistinguishServices
CharacteristicsThat
DistinguishServices
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Characteristics of ServicesCharacteristics of Services22
IntangibilityIntangibilityIntangibilityIntangibility
InseparabilityInseparabilityInseparabilityInseparability
HeterogeneityHeterogeneityHeterogeneityHeterogeneity
PerishabilityPerishabilityPerishabilityPerishability
Services that cannot be touched, seen, tasted, heard, or felt in the
same manner as goods.
Services that cannot be touched, seen, tasted, heard, or felt in the
same manner as goods.
A characteristic of services that allows them to be produced and
consumed simultaneously.
A characteristic of services that allows them to be produced and
consumed simultaneously.
A characteristic of services that makes them less standardized
and uniform than goods.
A characteristic of services that makes them less standardized
and uniform than goods.
A characteristics of services that prevents them from being stored,
warehoused, or inventoried.
A characteristics of services that prevents them from being stored,
warehoused, or inventoried.
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Learning Objective Learning Objective
Describe the components of service quality and the gap model of service quality.
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Service QualityService Quality
TangiblesTangibles
EmpathyEmpathy
AssuranceAssurance
ResponsivenessResponsiveness
ReliabilityReliability
Components for Components for Evaluating Evaluating
Service QualityService Quality
Components for Components for Evaluating Evaluating
Service QualityService Quality
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Components of Service QualityComponents of Service Quality
TangiblesTangibles
EmpathyEmpathy
AssuranceAssurance
ResponsivenessResponsiveness
ReliabilityReliability
The physical evidence of a service.
The physical evidence of a service.
Caring, individualized attention to customers.Caring, individualized attention to customers.
The knowledge and courtesyof employees.
The knowledge and courtesyof employees.
The ability to provideprompt service
The ability to provideprompt service
The ability to perform the service right the first time.The ability to perform the service right the first time.
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The Gap Model of Service QualityThe Gap Model of Service Quality33
Expected ServiceExpected Service
Perceived ServicePerceived Service
Service DeliveryService Delivery
Quality SpecificationsQuality Specifications
Mgmt perceptionMgmt perception
Communication with Customers
Communication with Customers
CustomerCustomer
ProviderProvider
GAP 2GAP 2
GAP 3GAP 3
GAP 4GAP 4
GAP 5GAP 5
GAP 1GAP 1
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Learning Objective Learning Objective
Explain why services marketing is important to manufacturers.
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Services Marketing in Services Marketing in ManufacturingManufacturing
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Learning Objective Learning Objective
Develop marketing mixes for services.
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Marketing Mixes for ServicesMarketing Mixes for Services
Product Product (Service)(Service)StrategyStrategy
Product Product (Service)(Service)StrategyStrategy
InformationInformationProcessingProcessingInformationInformationProcessingProcessing
People People ProcessingProcessing
People People ProcessingProcessing
PossessionPossessionProcessingProcessing
PossessionPossessionProcessingProcessing
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Core and Supplementary ServicesCore and Supplementary Services55
CoreServiceCore
Service
SupplementaryService
SupplementaryService
The more basic benefit the consumer is buying.
The more 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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Core and Supplementary ServicesCore and Supplementary Services
Overnight Overnight transportation transportation and delivery and delivery of packagesof packages
Problem solving
Billing statements
TracingDocumentation
Order taking
Supplies
Pickup
Advice andinformation
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Mass CustomizationMass Customization
A strategy that uses
technology to deliver
customized services on a
mass basis.
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Mass CustomizationMass CustomizationC
ust
om
izat
ion
Cu
sto
miz
atio
n
Low
Lo
w
High
Hig
h
CustomizedCustomizedFocusFocus
StandardizedStandardizedFocusFocus
CostCost
MassMassCustomizationCustomization
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Service Mix StrategyService Mix Strategy55
Determine what new services to introduce
Determine target market
Decide what existing services to maintain and/or eliminate
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Distribution Strategy IssuesDistribution Strategy Issues55
SchedulingScheduling
LocationLocation
Direct vs. Indirect Distribution
Direct vs. Indirect Distribution
Number of OutletsNumber of Outlets
ConvenienceConvenience
Focus forFocus forDistribution Distribution StrategiesStrategies
Focus forFocus forDistribution Distribution StrategiesStrategies
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Promotion Strategy IssuesPromotion Strategy Issues55
Stress tangible cues
Use personal information sources
Create a strongorganizational image
Engage in postpurchase communication
ServiceServicePromotion Promotion StrategiesStrategies
ServiceServicePromotion Promotion StrategiesStrategies
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Price StrategyPrice Strategy
Pricing Pricing ChallengesChallenges
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
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”
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Pricing ObjectivesPricing Objectives
Revenue-OrientedPricing
Revenue-OrientedPricing
Operations-OrientedPricing
Operations-OrientedPricing
Patronage-OrientedPricing
Patronage-OrientedPricing
Categories ofCategories ofPricingPricing
ObjectivesObjectives
Categories ofCategories ofPricingPricing
ObjectivesObjectives
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Learning Objective Learning Objective 66
Discuss relationship marketing in services.
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Relationship Marketing Relationship Marketing in Servicesin Services
Level 1Level 1FinancialFinancial
Level 2Level 2Financial, SocialFinancial, Social
Level 3Level 3Financial, Social, StructuralFinancial, Social, StructuralThree LevelsThree Levels
of of Relationship Relationship
MarketingMarketing
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One
Two
Three
Financial
Level Type ofbond
Potential forlong-termadvantage
over competitors
Degree ofservice
customization
Main elementof marketing
mix
Financialand social
Financial,social, andstructural
Low
Medium
Medium tohigh
Price
Personalcommunication
Servicedelivery
Low
Medium
High
Relationship Marketing Relationship Marketing in Servicesin Services
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Learning Objective Learning Objective
Explain internal marketing in services.
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Internal MarketingInternal Marketing
Treating employees as
customers and developing
systems and benefits that
satisfy their needs.
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Internal Marketing ActivitiesInternal Marketing Activities77
StressingTeamworkStressingTeamwork
Competing for Talent
Competing for Talent
Offeringa VisionOfferinga Vision
TrainingEmployeesTraining
Employees
EmpowermentEmpowermentKnowing
Employees’ Needs
KnowingEmployees’
NeedsRewarding
PerformanceRewarding
Performance
InternalInternalMarketingMarketingActivitiesActivities
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Learning Objective Learning Objective
Discuss global issues in services marketing.
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Global Issues in Global Issues in Services MarketingServices Marketing
FinancialFinancial
ConstructionConstruction
EngineeringEngineering
InsuranceInsurance
Restaurant ChainsRestaurant Chains
U.S. is world’s U.S. is world’s largest largest
exporter of servicesexporter of services
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Learning Objective Learning Objective
Describe nonprofit organization marketing.
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Nonprofit Organization MarketingNonprofit Organization Marketing99
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 OrganizationsNonprofit Organizations
GovernmentGovernment
Private MuseumsPrivate Museums
TheatersTheaters
SchoolsSchools
ChurchesChurches
Other Non-governmentOther Non-government
Nonprofit Organizations
Nonprofit Organizations
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Nonprofit Organization MarketingNonprofit Organization Marketing
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
OrganizationsOrganizations
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Nonprofit Organization Nonprofit Organization Marketing ActivitiesMarketing Activities
Identify Desired CustomersIdentify Desired Customers
Specify ObjectivesSpecify Objectives
Develop, manage, eliminate programs/services
Develop, manage, eliminate programs/services
Set pricesSet prices
Schedule eventsSchedule events
Communicate through advertising/PRCommunicate through advertising/PR
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Learning Objective Learning Objective
Explain the unique aspects of nonprofit organization marketing.
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Unique Aspects of Nonprofit Unique Aspects of Nonprofit Organization Marketing StrategiesOrganization Marketing Strategies
Market Objectives
Market Objectives
Target MarketsTarget Markets
MarketingMixes
MarketingMixes
Unique Aspects of Unique Aspects of Marketing of NonprofitMarketing of Nonprofit
OrganizationsOrganizations
Unique Aspects of Unique Aspects of Marketing of NonprofitMarketing of Nonprofit
OrganizationsOrganizations
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Market ObjectivesMarket Objectives
Users
Payers
Donors
Politicians
Appointed officials
Media
General Public
Provide Services to:
Provide Services to:
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Target MarketsTarget MarketsApathetic or
strongly opposedtargets
Apathetic or strongly opposed
targets
Pressure to adopt undifferentiated segmentation
Pressure to adopt undifferentiated segmentation
Complementary positioning
Complementary positioning
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Unique Issues Unique Issues of Nonprofitof Nonprofit
OrganizationsOrganizations
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Product DecisionsProduct Decisions
BenefitComplexity
BenefitComplexity
WeakBenefit Strength
WeakBenefit Strength
Low Involvement
Low Involvement
Distinctions betweenDistinctions betweenBusiness and NonprofitBusiness and Nonprofit
OrganizationsOrganizations
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Promotion DecisionsPromotion Decisions1010
Sales PromotionActivities
Public ServiceAdvertising
Licensing
ProfessionalVolunteers
NonprofitNonprofitOrganizationOrganizationPromotion Promotion DecisionsDecisions
NonprofitNonprofitOrganizationOrganizationPromotion Promotion DecisionsDecisions
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Pricing DecisionsPricing Decisions
Below-Cost PricingBelow-Cost Pricing
Separation BetweenPayers and Users
Separation BetweenPayers and Users
Indirect PaymentIndirect Payment
Nonfinancial PricesNonfinancial Prices
Pricing ObjectivesPricing Objectives
Characteristics Characteristics DistinguishingDistinguishing
Pricing DecisionsPricing Decisionsof Nonprofit of Nonprofit
OrganizationsOrganizations
Characteristics Characteristics DistinguishingDistinguishing
Pricing DecisionsPricing Decisionsof Nonprofit of Nonprofit
OrganizationsOrganizations
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