1 copyright © 2009 by nelson education, ltd. all rights reserved. chapter 10 services and 10...

1Copyright © 2009 by Nelson Education, Ltd. All rights reserved. Chapter 10

Services and Services and

10

Nonprofit Nonprofit Organization Organization Marketing Marketing

Canadian Adaptation prepared by Canadian Adaptation prepared by Don Hill, Langara CollegeDon Hill, Langara College


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 (continued)Learning Objectives (continued)

4. Develop marketing mixes for services

5. Discuss relationship marketing in services

6. Explain internal marketing in services


Learning Objectives (continued)Learning Objectives (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

Onlinewww.intrawest.com

1

11


ServiceService

1

ServiceService

The result of applying human or

mechanical efforts to people or objects.


The Importance of ServicesThe Importance of Services

1

Service sector accounts fo 70% of Canadian GDP.Service sector accounts fo 70% of Canadian GDP.

75.8% of workers are in service sector. 75.8% of workers are in service sector.

Service occupations will be responsible for nearly all net job growth through 2012.Service occupations will be responsible for nearly all net job growth through 2012.

In 2006, 53.8% of household spending on services.In 2006, 53.8% of household spending on services.


The Importance of The Importance of ServicesServices

1



Discuss the differences between services and goods

Onlinewww.westinbayshore.com

2

22


IntangibleIntangible

InseparableInseparable

HeterogeneousHeterogeneous

PerishablePerishable

How Services Differ from GoodsHow Services Differ from Goods

Onlinehttp://www.amctheatres.comhttp://www.movietickets.com

2



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

3

33


Components of Service QualityComponents of Service Quality

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.

3


The Gap Model of Service The Gap Model of Service QualityQuality

3



Develop marketing mixes for services

4

44


Product Strategies for ServicesProduct Strategies for Services

4

ServiceMix

ServiceMix

Standardizationor

Customization

Standardizationor

Customization

Core andSupplementary

Core andSupplementaryProcessProcess


Service ProcessingService Processing

ServiceServiceProcessingProcessingCategoriesCategories

ServiceServiceProcessingProcessingCategoriesCategories Mental Stimulus

ProcessingMental Stimulus

Processing

People People ProcessingProcessing

People People ProcessingProcessing

PossessionProcessing

PossessionProcessing

InformationProcessing

InformationProcessing

4


Core and Supplementary ServicesCore and Supplementary Services

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.

4


Mass CustomizationMass Customization

4

Mass CustomizationMass Customization

A strategy that uses technology

to deliver customized services

on a mass basis.


Mass CustomizationMass CustomizationC

ust

om

izat

ion

Cu

sto

miz

atio

n

Low

Lo

w

High

Hig

hCustomizedCustomized

FocusFocus

StandardizedStandardizedFocusFocus

CostCost

MassMassCustomizationCustomization

4


Service Mix StrategyService Mix Strategy

Determine what new services to introduce

Determine target market

Decide what existing services to maintain and eliminate

4


Distribution Strategy IssuesDistribution Strategy Issues

SchedulingScheduling

LocationLocation

Direct or indirect distribution

Direct or indirect distribution

Number of outletsNumber of outlets

ConvenienceConvenience

4


Promotion Strategy IssuesPromotion Strategy Issues

Stress tangible cues

Use personal information sources

Create a strongorganizational image

Engage in postpurchase communication

4


Price StrategyPrice Strategy

4

Pricing Pricing ChallengesChallenges

Pricing Pricing ChallengesChallenges

Base price on completion of service taskBase price on completion of service task

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


Pricing ObjectivesPricing Objectives

Onlinehttp://www.etrade.comhttp://www.ameritrade.comhttp://www.schwab.comwww.canadianisp.com

4

Revenue-OrientedPricingRevenue-OrientedPricing

Operations-OrientedPricingOperations-OrientedPricing

Patronage-OrientedPricingPatronage-OrientedPricing

Maximize the surplus of income over costsMaximize the surplus of income over costs

Match supply and demand by varying priceMatch supply and demand by varying price

Maximize the number of customers by varying priceMaximize the number of customers by varying price


Marketing Mixes for ServicesMarketing Mixes for Services

4

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



Discuss relationship marketing in services

5

55


Relationship Marketing in Relationship Marketing in ServicesServices

5



Explain internal marketing in services

6

66


Internal MarketingInternal Marketing

6

Internal Marketing Internal Marketing

Treating employees as

customers and developing

systems and benefits that

satisfy their needs.


Internal Marketing ConnectionsInternal Marketing Connections

6


Internal Marketing ActivitiesInternal Marketing Activities

Competing for Talent

Competing for Talent

Offeringa VisionOfferinga Vision

StressingTeamworkStressingTeamwork

TrainingEmployeesTraining

Employees EmpowermentEmpowerment

KnowingEmployees’

Needs

KnowingEmployees’

NeedsRewarding

PerformanceRewarding

Performance

6



Discuss global issues in services marketing

7

77


Global Issues in Services Global Issues in Services MarketingMarketing

7



Describe nonprofit organization marketing

8

88


Nonprofit Organization MarketingNonprofit Organization Marketing

8

Nonprofit Organization Marketing Nonprofit Organization Marketing

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 Nonprofit OrganizationsOrganizations

Nonprofit Nonprofit OrganizationsOrganizations

8



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


8


Nonprofit Organization Marketing Nonprofit Organization Marketing ActivitiesActivities

Identify desired customersIdentify desired customers

Specify objectivesSpecify objectives

Develop, manage, eliminate programs and servicesDevelop, manage, eliminate programs and services

Set pricesSet prices

Schedule eventsSchedule events

Communicate their availabilityCommunicate their availability

8


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

Onlinehttp://www.peta.com

8


Provide Services to:

Market ObjectivesMarket Objectives

Users

Payers

Donors

Politicians

Appointed officials

Media

General Public

8


Target MarketsTarget 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 Unique Issues of Nonprofitof Nonprofit


8


Distinctions between Business and Nonprofit Organizations

Product DecisionsProduct Decisions

Benefit complexity

Weak benefit strength

Low involvement

8


Onlinehttp://www.adcouncil.org

Promotion DecisionsPromotion Decisions

Sales promotion activities

Public service advertising

Professional volunteers

8


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


Characteristics Characteristics DistinguishingDistinguishing

Pricing DecisionsPricing Decisionsof Nonprofit of Nonprofit


8



8

TARGET• Apathetic or

strongly opposed

• Undifferentiated segmentation

• Complementary positioning

PRODUCT

PROMOTION

PLACE

PRICE

Professional volunteers

Sales

Public ServiceAdvertising

Involvement

Benefitstrength

Benefitcomplexity

Specialfacilities

Nonfinancial

Indirect payment

Separation

Below costpricing

1 copyright © 2009 by nelson education, ltd. all rights reserved. chapter 10 services and 10...

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