chapter 11copyright ©2009 cengage learning inc. all rights reserved 1 mktg designed by amy mcguire,...

Chapter 11 Copyright ©2009 Cengage Learning Inc. All rights reserved 1

MKTG

Designed byAmy McGuire, B-books, Ltd.

Prepared byDeborah Baker, Texas Christian University

Lamb, Hair, McDaniel 2008-2009 Services

and Nonprofit Organization Marketing

11

CHAPTER


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


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


Discuss the importance of services to the

economy

The Importance of ServicesThe Importance of ServicesLO1


LO1

Service

The result of applying

human or mechanical

efforts to people or

objects.

ServiceService


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


Discuss the differences between services and goods

How Services Differ from GoodsHow Services Differ from GoodsLO2


How Services Differ from Goods

LO2

IntangibleIntangible

InseparableInseparable

HeterogeneousHeterogeneous

PerishablePerishable


How Services Differ from Goods

LO2

IntangibilityIntangibility

Search Qualities

Experience Qualities

Credence Qualities

Online

http://www.webmd.com


Describe the components

of service quality and the gap model of service quality

Service QualityService QualityLO3


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.


The Gap Model of Service Quality

LO3


Biz Flix

LO3Intolerable Cruelty



Service Quality


Develop marketing mixes for services

Marketing Mixes for ServicesMarketing Mixes for ServicesLO4


LO4

Product Strategies for Services

ServiceMix

Standardizationor

Customization

Core andSupplementary

Process


LO4

Service as a Process

Mental StimulusProcessing

Mental StimulusProcessing

People Processing

People Processing

PossessionProcessing

PossessionProcessing

InformationProcessing

InformationProcessing


LO4

The Service Factory

Possession processing

Mental-stimulus processing


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.


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


LO4

Customization/Standardization

A strategy that uses

technology to deliver

customized services

on a mass basis.

MassCustomization

MassCustomization


LO4

The Service Mix

Determine what new services to introduce

Determine target market

Decide what existing services to maintain and to eliminate


LO4

Place (Distribution) Strategy

SchedulingScheduling

LocationLocation

Direct or indirect distribution

Direct or indirect distribution

Number of outletsNumber of outlets

ConvenienceConvenience


LO4

Promotion Strategy

Stress tangible cues

Use personal information sources

Create a strong organizational image

Engage in postpurchase communication


LO4

Price Strategy

Pricing Challenges for Services

Define the unit of service consumption

Determine if multiple elements are “bundled” or priced separately


LO4

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

http://www.etrade.comhttp://www.tdameritrade.comhttp://www.schwab.com

Online



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


Discuss relationship marketing in services

Relationship MarketingRelationship MarketingLO5



Relationship Marketing in Services

2Social

Financial

1Financial

3Structural

SocialFinancial

Pricing incentives

Design services to meet customer needs

Creating value-added services not available elsewhere


Explain internal marketing in services

Internal Marketing in Internal Marketing in Service FirmsService Firms

LO6


Internal MarketingLO6

Internal Marketing

Internal Marketing

Treating employees as customers and developing systems and benefits that satisfy their needs.



Internal Marketing in Services


Discuss global issues

in services marketing

Global Issues in Global Issues in Services MarketingServices MarketingLO7



Global Issues in Services Marketing

United States is world’s largest exporter of services.

U.S.A.


Describe nonprofit organization

marketing

Nonprofit Organization Nonprofit Organization MarketingMarketingLO8


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.



LO8

Government

Museums

Theaters

Schools

Churches



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



LO8

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

LO8

Setting of marketing objectives

Selection of target markets

Development of marketing mixes


Objectives

LO8

Provide services that respond to the wants of :

Users

Payers

Donors

Politicians

Appointed officials

Media

General Public


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


Product Decisions

LO8

Distinctions between Business and Nonprofit Organizations

Benefit complexity

Weak or indirect benefit strength

Low involvement


Promotion Decisions

LO8

Sales promotion activities

Public service advertising

Professional volunteers

Online

http://www.adcouncil.com


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




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

chapter 11copyright ©2009 cengage learning inc. all rights reserved 1 mktg designed by amy mcguire,...

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