Chapter 11: Services and Nonprofit Organization Marketing: Objectives

Chapter 11: Services and Nonprofit
Organization Marketing
Objectives:
• 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.
• 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. 1
Chap. 11 Marketing 7e Lamb Hair McDaniel
©2004 South-Western/Thomson Learning
1 Service
The result of applying human

or mechanical efforts to
people or objects.
2
1 The Importance of Services
79%
79% of
of workers
workers are
are in
in
service
service sector
sector
Services
Services account
account for
for
76%
76% of
of U.S.
U.S. GDP
GDP
Service
Service occupations
occupations willwill be
be
responsible
responsible for
for all
all net
net job
job
growth
growth through
through 2005
2005
3
1 Service-Producing Industries
and Job Growth
4
How Services Differ from
2
On
OnLine
Line
Goods
http://www.nationalamusements.com
http://www.nationalamusements.com
http://www.amctheatres.com
http://www.amctheatres.com
http://www.movietickets.com
http://www.movietickets.com
Services
Services
Are
AreIntangible
Intangible Performances
Performances
Services
ServicesAre
AreProduced
Producedand
and Consumed
Consumed
Simultaneously
Simultaneously
Services
ServicesHave
HaveGreater
Greater Variability
Variability
Services
Services Are
Are Perishable
Perishable
5
3 Components of Service
Quality
The
The ability
ability to
to perform
perform the the
Reliability
Reliability service
service right
right the
the first
first time.
time.
The
The ability
ability to
to provide
provide
Responsiveness
Responsiveness prompt
prompt service.
service.
The
The knowledge
knowledge and
and courtesy
courtesy
Assurance
Assurance of
of employees.
employees.
Caring,
Caring, individualized
individualized
Empathy
Empathy attention
attention to
to customers.
customers.
The
The physical
physical evidence
evidence
Tangibles
Tangibles of
of aa service.
service.
6
The Gap Model of Service
3
Quality
7
4 Marketing Mixes for Services
People
People
Processing
Processing
Possession
Possession
Product
Product Processing
Processing
(Service)
(Service)
Strategy
Strategy Mental
Mental Stimulus
Stimulus
Processing
Processing
Information
Information
Processing
Processing
8
Core and Supplementary
4
Services
Core
Core The
The most
most basic
basic benefit
benefit the
the
Service
Service consumer
consumer is
is buying.
buying.
Supplementary
Supplementary AA group
group of
of services
services that
that support
support
Service
Service or
or enhance
enhance the
the core
core service.
service.
9
Core and Supplementary
4
Services
for FedEx FedE
x
Problem Advice and
solving information Order taking
Overnight
Billing transportation
and delivery Supplies
statements
of packages
Tracing Pickup
Documentation
10
4 Mass Customization
A strategy that uses

technology to deliver
customized services on a
mass basis.
11
4 Mass Customization
Customization
Mass Customized
High
Customization Focus
Low
Standardized
Focus
Low High
Cost
12
4 Service Mix Strategy
● Determine what new services to

introduce
● Determine target market
● Decide what existing services to
maintain and/or eliminate
13
4 Distribution Strategy Issues
Convenience
Convenience
Number
Number of
of Outlets
Outlets
Focus
Focus for
for Direct
Direct vs.
vs. Indirect
Indirect
Distribution
Distribution Distribution
Distribution
Strategies
Strategies
Location
Location
Scheduling
Scheduling
14
VISA
4 Promotion Strategy Issues
Stress tangible cues
Use personal
Service
Service information sources
Promotion
Promotion
Strategies
Strategies Create a strong
organizational image
Engage in postpurchase
communication
15
4 Price Strategy
Define
Define unit
unit of
of
service
service consumption
consumption
Pricing
Pricing Determine
Determine ifif multiple
multiple
Challenges
Challenges elements
elements are
are “bundled”
“bundled”
Trends
Trends have
have
made
made pricing
pricing an
an
active
active component
component
16
4 Pricing Objectives
Revenue-Oriented
Revenue-Oriented
Pricing
Pricing
Categories
Categories of
of Operations-
Operations-
Pricing
Pricing Oriented
Oriented
Objectives
Objectives Pricing
Pricing
Patronage-
Patronage-
Oriented
Oriented
On
Pricing
Pricing
OnLine
Line
http://www.etrade.com
http://www.etrade.com
http://www.ameritrade.com
http://www.ameritrade.com
http://www.schwab.com
http://www.schwab.com
17
Relationship Marketing in
5
Services
Level 3
Financial, Social, Structural
Three Levels
of Level 2
Relationship Financial, Social
Marketing
Level 1
Financial
18
6 Internal Marketing
Treating employees as
customers and developing
systems and benefits that
satisfy their needs.
19
6 Internal Marketing Activities
Competing
Competing Offering
Offering Training
Training Stressing
Stressing
for
for Talent
Talent aa Vision
Vision Employees
Employees Teamwork
Teamwork
Knowing
Knowing
Empowerment Rewarding
Rewarding
Empowerment Employees’
Employees’
Performance
Performance Needs
Needs
Internal
Marketing
Activities
20
Global Issues in Services
7
Marketing
Financial
Financial
Construction
Construction
Engineering
Engineering
Insurance
Insurance
U.S. is world’s
largest Hotel
Hotel Chains
Chains
exporter of services
21
Nonprofit Organization
8
Marketing
An organization that exists to

achieve some goal other than
the usual business goals of
profit, market share, or return
on investment.
22
8 Nonprofit Organizations
Government
Government
Private
PrivateMuseums
Museums
Theaters
Theaters
Schools
Schools
Nonprofit
Nonprofit
Organizations
Organizations Churches
Churches
Other
Other Non-Government
Non-Government
23
Nonprofit Organization
8
Marketing
Market
Market intangible
intangible products
products
Shared Production
Production requires
requires
Shared
Characteristics customer’s
customer’s presence
presence
Characteristics
with
with
Service
Service
Organizations Services
Services vary
vary greatly
greatly
Organizations
Services
Services can
can not
not be
be stored
stored
24
Nonprofit Organization Antidru
8 g
Marketing Activities
Identify
Identify Desired
Desired Customers
Customers
Specify
Specify Objectives
Objectives
Develop,
Develop, manage,
manage, eliminate
eliminate
programs/services
programs/services
Set
Set prices
prices
Schedule
Schedule events
events
Communicate
Communicate through
through advertising/PR
advertising/PR
25
Unique Aspects of Nonprofit
8 Organization Marketing
Strategies
Setting
Setting of
of Marketing
Marketing Objectives
Objectives
Selection
Selection of
of Target
Target Markets
Markets
Development
Development of
of Marketing
Marketing Mixes
Mixes
On
OnLine
Line
http://www.peta.com
http://www.peta.com 26
8 Market Objectives
Provide
Provide Services
Services
to:
to:
● Users ● Appointed officials

● Payers ● Media
● Donors ● General Public
● Politicians
27
8 Target Markets
Apathetic
Apathetic or
or Unique Issues
strongly
strongly opposed
opposed of Nonprofit
targets
targets Organizations
Pressure
Pressure to
to adopt
adopt
undifferentiated
undifferentiated
segmentation
segmentation
Complementary
Complementary
positioning
positioning
28
8 Product Decisions
Distinctions between
Benefit
Benefit Business and Nonprofit
Complexity
Complexity Organizations
Weak
Weak
Benefit
Benefit Strength
Strength
Low
Low
Involvement
Involvement
29
8 Promotion Decisions United
Way
Professional
Volunteers
Sales Promotion
Activities
Public Service
Advertising
On
OnLine
Line
http://www.adcouncil.org
http://www.adcouncil.org
30
8 Pricing Decisions
Pricing
Pricing Objectives
Objectives
Nonfinancial
Nonfinancial Prices
Prices
Characteristics
Characteristics
Distinguishing
Distinguishing
Pricing
Pricing Decisions
Decisions Indirect
Indirect Payment
Payment
of
of Nonprofit
Nonprofit
Organizations
Organizations Separation
Separation Between
Between
Payers
Payers and
and Users
Users
Below-Cost
Below-Cost Pricing
Pricing
31

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Chapter 11: Services and Nonprofit

The result of applying human

A strategy that uses

● Determine what new services to

Stress tangible cues

An organization that exists to

● Users ● Appointed officials

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