1. 1Chap. 11 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Services and Nonprofit Organization Marketing Prepared by Deborah Baker Texas Christian University Chapter 11

2. 2Chap. 11 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Learning 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.

3. 3Chap. 11 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Learning Objectives (continued) 4.Develop marketing mixes for services. 5.Discuss relationship marketing in services. 6.Explain internal marketing in services.

4. 4Chap. 11 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Learning Objectives (continued) 7.Discuss global issues in services marketing. 8.Describe nonprofit organization marketing.

5. 5Chap. 11 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Learning Objective Discuss the importance of services to the economy. 1 1 On Line http://www.yellowfreight.com On Line http://www.yellowfreight.com

6. 6Chap. 11 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Service The result of applying human or mechanical efforts to people or objects. 1 1

7. 7Chap. 11 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning The Importance of Services 79% of workers are in service sector 79% of workers are in service sector Services account for 76% of U.S. GDP Service occupations will be responsible for all net job growth through 2005 1 1

8. 8Chap. 11 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Service-Producing Industries and Job Growth 1 1

9. 9Chap. 11 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Learning Objective Discuss the differences between services and goods. 2 2 On Line http://www.sheraton.com On Line http://www.sheraton.com

10. 10Chap. 11 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning How Services Differ from Goods Services Are Intangible Performances Services Are Intangible Performances Services Are Produced and Consumed Simultaneously Services Have Greater Variability Services Are Perishable 2 2 On Line http://www.nationalamusements.com http://www.amctheatres.com http://www.movietickets.com On Line http://www.nationalamusements.com http://www.amctheatres.com http://www.movietickets.com

11. 11Chap. 11 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Learning Objective Describe the components of service quality and the gap model of service quality. 3 3

12. 12Chap. 11 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Components of Service Quality Tangibles The physical evidence of a service. The physical evidence of a service. Empathy Caring, individualized attention to customers. Assurance The knowledge and courtesy of employees. The knowledge and courtesy of employees. Responsiveness The ability to provide prompt service. The ability to provide prompt service. Reliability The ability to perform the service right the first time. 3 3

13. 13Chap. 11 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning The Gap Model of Service Quality 3 3

14. 14Chap. 11 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Learning Objective Develop marketing mixes for services. 4 4

15. 15Chap. 11 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Marketing Mixes for Services Product(Service)StrategyProduct(Service)Strategy Mental Stimulus Processing PeopleProcessingPeopleProcessing Possession Processing Information Processing 4 4

16. 16Chap. 11 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Core and Supplementary Services Core Service Supplementary Service Supplementary Service The most basic benefit the consumer is buying. A group of services that support or enhance the core service. A group of services that support or enhance the core service. 4 4

17. 17Chap. 11 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Core and Supplementary Services for FedEx Overnight transportation and delivery of packages Problem solving Billing statements Tracing Documentation Order taking Supplies Pickup Advice and information 4 4

18. 18Chap. 11 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Mass Customization A strategy that uses technology to deliver customized services on a mass basis. 4 4

19. 19Chap. 11 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Mass Customization Customization Low High Customized Focus Standardized Focus Cost Mass Customization 4 4

20. 20Chap. 11 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Service Mix Strategy  Determine what new services to introduce  Determine target market  Decide what existing services to maintain and/or eliminate 4 4

21. 21Chap. 11 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Distribution Strategy Issues Scheduling Location Direct vs. Indirect Distribution Direct vs. Indirect Distribution Number of Outlets Convenience Focus for Distribution Strategies 4 4

22. 22Chap. 11 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Promotion Strategy Issues Stress tangible cues Use personal information sources Create a strong organizational image Engage in postpurchase communication ServicePromotionStrategiesServicePromotionStrategies 4 4

23. 23Chap. 11 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Price Strategy Pricing Challenges Trends have made pricing an active component Trends have made pricing an active component Define unit of service consumption Define unit of service consumption Determine if multiple elements are “bundled” 4 4

24. 24Chap. 11 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Pricing Objectives Revenue-Oriented Pricing Operations- Oriented Pricing Patronage- Oriented Pricing Categories of Pricing Objectives 4 4 On Line http://www.etrade.com http://www.ameritrade.com http://www.schwab.com On Line http://www.etrade.com http://www.ameritrade.com http://www.schwab.com

25. 25Chap. 11 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Learning Objective Discuss relationship marketing in services. 5 5

26. 26Chap. 11 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Relationship Marketing in Services Level 1 Financial Level 2 Financial, Social Level 3 Financial, Social, Structural Three Levels of Relationship Marketing 5 5

27. 27Chap. 11 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Learning Objective Explain internal marketing in services. 6 6

28. 28Chap. 11 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Internal Marketing Treating employees as customers and developing systems and benefits that satisfy their needs. 6 6

29. 29Chap. 11 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Internal Marketing Activities Stressing Teamwork Competing for Talent Competing for Talent Offering a Vision Training Employees Empowerment Knowing Employees’ Needs Rewarding Performance Internal Marketing Activities 6 6

30. 30Chap. 11 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Learning Objective Discuss global issues in services marketing. 7 7

31. 31Chap. 11 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Global Issues in Services Marketing Financial Construction Engineering Insurance Hotel Chains U.S. is world’s largest exporter of services 7 7

32. 32Chap. 11 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Learning Objective Describe nonprofit organization marketing. 8 8

33. 33Chap. 11 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning 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. 8 8

34. 34Chap. 11 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Nonprofit Organizations Government Private Museums Theaters Schools Churches Other Non-Government Nonprofit Organizations 8 8

35. 35Chap. 11 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Nonprofit Organization Marketing Market intangible products Production requires customer’s presence Production requires customer’s presence Services vary greatly Services can not be stored Shared Characteristics with Service Organizations Shared Characteristics with Service Organizations 8 8

36. 36Chap. 11 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Nonprofit Organization Marketing Activities Identify Desired Customers Specify Objectives Develop, manage, eliminate programs/services Set prices Schedule events Communicate through advertising/PR 8 8

37. 37Chap. 11 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Unique Aspects of Nonprofit Organization Marketing Strategies Setting of Marketing Objectives Selection of Target Markets Development of Marketing Mixes 8 8 On Line http://www.peta.com On Line http://www.peta.com

38. 38Chap. 11 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Market Objectives  Users  Payers  Donors  Politicians  Appointed officials  Media  General Public Provide Services to: 8 8

39. 39Chap. 11 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Target Markets Apathetic or strongly opposed targets Apathetic or strongly opposed targets Pressure to adopt undifferentiated segmentation Complementary positioning Unique Issues of Nonprofit Organizations 8 8

40. 40Chap. 11 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Product Decisions Benefit Complexity Benefit Complexity Weak Benefit Strength Weak Benefit Strength Low Involvement Distinctions between Business and Nonprofit Organizations 8 8

41. 41Chap. 11 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning On Line http://www.adcouncil.org On Line http://www.adcouncil.org Promotion Decisions Sales Promotion Activities Public Service Advertising Professional Volunteers 8 8

42. 42Chap. 11 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning Pricing Decisions Below-Cost Pricing Separation Between Payers and Users Indirect Payment Nonfinancial Prices Pricing Objectives CharacteristicsDistinguishing Pricing Decisions of Nonprofit Organizations CharacteristicsDistinguishing 8 8