1. Chapter 11 Services and Nonprofit Organization Marketing

2. ‘Product’ Essentials TOTAL MARKETING EFFORTS (tangible) Planning The
Offering
Idea
(ambiguous)
Service
(intangible)

3. The Goods/Services Continuum
Computer
diskette
Computer
software
Computer
Computer
program
Systems
design
Exercise
equipment
In-home
rental of
equipment
Use of
equipment
in hotel
Health and
fitness
clubs
Personal
trainer
Off-the-
rack
furniture
Custom-
made
furniture
Reuphol-
stering
furniture
Cleaning
furniture
Interior
decorator
Self-service
gasoline
Full-service
gasoline
Trans-
mission
overhaul
Driver ed.
(firm’s car)
Driver ed.
(consumer’s
car)
Pure goods
Pure services
Please note: The above continuum should be viewed left to right. Within each row,
a consistent pattern moves from pure good to pure service. When comparing different
rows, less consistency exists due to the diversity of examples shown.

4. Character of Services Services Products Performances Objects
Intangible
Tangible
Use
Ownership & Use
Memory of
Transaction
Accumulation
Storage
Reuse
Reminder of
Transaction

5. Character of Services Services Products Invisible Visible
Costs not Seen
Costs Seen

6. Purchase Behavior for Services
Products
Experience
Attributes
Search
Attributes
(restaurant)
(color)
Credence
Attributes
(healthcare)
Difficult to
Judge Quality
Easier to
Judge Quality
Price More as a
Surrogate of Quality
Price Less as a
Surrogate of Quality

7. Characteristics of Services
Intangibility
Inseparability
Heterogeneity
Perishability
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 makes them less standardized and uniform than goods.
A characteristics of services that prevents them from being stored, warehoused, or inventoried.

8. Components of Service Quality
Tangibles
Empathy
Assurance
Responsiveness
Reliability
The physical evidence
of a service.
Caring, individualized attention to customers.
The knowledge and courtesy
of employees.
The ability to provide
prompt service
The ability to perform the service right the first time.

9. Which Components are Most Important to Customers?
1. Reliability - 32%
2. Responsiveness - 22%
3. Assurance - 19%
4. Empathy - 16%
5. Tangibles - 11%

10. Importance of Service Quality
Businesses with high Service Quality have
1. 10% higher prices
2. Grow 6% faster
3. 12% high return on sales

11. Hard Customer-Defined Service Standards
Federal Express # missed pickups
Dun & Bradstreet 36 hour turnaround
U.S. Healthcare 20-second call answering
Lenscrafters glasses in an hour

12. Soft Customer-Defined Service Standards
Land’s End personal attention
General Electric summarize actions
Nationwide Insurance responsiveness
American Express open and honest

13. Bottom Line for Service Quality
1. Clear and reasonable promises
2. Build staff skills
3. Emphasize ‘Do-It-Right-First’ performance
4. Be great at problem resolution
5. Make it easy for customers to complain

14. The Importance of Services1
The Importance of Services
79% of workers are in
service sector
Services account for 76% of U.S. GDP
Service occupations will be responsible for all job growth through 2005

15. Gap Model of Service Quality
Expected
Service
Gap 5
Perceived
Service
Consumer
Provider
Service
delivery
Communication
with Customers
Gap 1
Gap 4
Gap 3
Service Quality
Specifications
Gap Legend
Knowledge gap
Standards gap
Delivery gap
Communications gap
Service gap
Gap 2
Mgt. Perceptions of
Con. Expectations 9

16. Core and Supplementary Services
Advice and
information
Problem solving
Order taking
Overnight transportation and delivery of packages
Billing
statements
Supplies
Tracing
Pickup
Documentation

17. Promotion Strategy Issues
Stress tangible cues
Use personal information sources
Create a strong organizational image
Engage in postpurchase communication
Service
Promotion
Strategies

18. Price Strategy Pricing Challenges Define unit of service consumption
Determine if multiple elements are “bundled”
Trends have made pricing an
active component

19. Internal Marketing Activities
Stressing Teamwork
Competing
for Talent
Offering a Vision
Training Employees
Empowerment
Knowing Employees’ Needs
Rewarding Performance
Internal Marketing Activities

20. Global Issues in Services Marketing
Financial
Construction
Engineering
Insurance
Restaurant Chains
U.S. is world’s largest exporter of services

21. Differences Between Nonprofit and Profit-Oriented Marketing
Scope
Forms of exchange
Complexity of objectives
Distribution of benefits
Market segments served
Constituencies
Nonprofit Marketing
Profit-oriented Marketing

22. Illustrations of Nonprofit Marketing
Examples of Social Marketing:
Choose to Save - Am Savings Ed Campaign
(see
Also see
Road Rage
Take folic acid
Designated driver
International Women’s Rights
164 Fº beef

23. For-Profit Support of Nonprofits
Social Marketing
Strategic Philanthropy
Charity
AMEX’s ‘Charge Against Hunger’
Walker’s ‘Corporate Citizenship’
TOP: Nonprofits, Computer & Food
BOTTOM: Government, Insurance,
Chemicals & Tobacco

24. Importance of Social Marketing

25. Nonprofit Organizations
Government
Private Museums
Theaters
Schools
Churches
Other Non-government
Nonprofit Organizations

26. Nonprofit Organization Marketing
Market intangible products
Production requires
customer’s presence
Services vary greatly
Services can not be stored
Shared Characteristics
with
Service Organizations

27. Nonprofit Organization Marketing Activities
Identify Desired Customers
Specify Objectives
Develop, manage, eliminate programs/services
Set prices
Schedule events
Communicate through advertising/PR

28. Market Objectives Provide Services to: Users Payers Donors Politicians
Appointed officials
Media
General Public

29. Target Markets Unique Issues of Nonprofit Organizations
Apathetic or strongly opposed
targets
Pressure to adopt undifferentiated segmentation
Complementary positioning
Unique Issues of Nonprofit
Organizations

30. Distinctions between Business and Nonprofit Organizations
Product Decisions
Benefit
Complexity
Weak
Benefit Strength
Low Involvement
Distinctions between Business and Nonprofit Organizations

31. Promotion Decisions Nonprofit Organization Promotion Decisions
Sales Promotion Activities
Public Service Advertising
Licensing
Professional Volunteers
Nonprofit
Organization
Promotion
Decisions

32. Pricing Decisions Pricing Objectives Nonfinancial Prices
Below-Cost Pricing
Separation Between Payers and Users
Indirect Payment
Nonfinancial Prices
Pricing Objectives
Characteristics
Distinguishing
Pricing Decisions of Nonprofit Organizations

33. Boyne USA
How do the characteristics of services apply to Boyne’s offerings?
Explain the core and supplementary services for Boyne.
What about distribution?
How does Boyne match supply and demand for their services?