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Services and Nonprofit Organization Marketing
Lamb, Hair, McDaniel Chapter 12 Services and Nonprofit Organization Marketing CHAPTER 12 Services and Nonprofit Organization Marketing © iStockphoto.com/Rafael Ramirez Lee
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The Importance of Services LO1 Services
Chapter 12 Services and Nonprofit Organization Marketing The Importance of Services Services Deed Performance Effort Services as a percentage of employment (Projected by 2018) 80% LO1
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How Services Differ from Goods
LO2 Chapter 12 Services and Nonprofit Organization Marketing How Services Differ from Goods Intangible Inseparable Heterogeneous Perishable No physical object makes it hard to communicate benefits. Production and consumption are simultaneous, meaning the consumer takes part in production. Services depend on their employees for quality, which makes consistency difficult to achieve. Services cannot be saved, and it is challenging to synchronize supply and demand.
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When Services are Assessed
Chapter 12 Services and Nonprofit Organization Marketing When Services are Assessed Search Quality—more often applied to goods, assessed before purchase Experience quality—assessed after purchase Credence quality—assessed only with appropriate knowledge. LO2
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Components of Service Quality
LO3 Chapter 12 Services and Nonprofit Organization Marketing Components of Service Quality Tangibles The physical evidence of the service. Empathy Caring, individualized attention to customers. Assurance The knowledge and courtesy of employees. Responsiveness The ability to provide prompt service. Reliability The ability to perform the service right the first time.
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Service Quality Written Assignment
Chapter 12 Services and Nonprofit Organization Marketing Service Quality Written Assignment Research has shown that customers evaluate service quality based on five components: Reliability, Assurance, Tangibility, Empathy, and Responsiveness. The goal of this assignment is for you to rate the quality of a service experience you have recently encountered. In this WRITTEN and TYPED assignment, you must do the following: Describe the service experience (include location, time, date, and basic description) Describe the service encounter based on the RATER method. Make sure you define each component. Explain how you evaluate the service experience based on that component. Use examples from your service experience as proof. Be prepared to discuss your findings with the class.
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Exhibit 12.1 Gap Model of Service Quality
Chapter 12 Services and Nonprofit Organization Marketing LO3
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Product Strategies for Services
Chapter 12 Services and Nonprofit Organization Marketing Product Strategies for Services Service Mix Customization or Standardization Core and Supplementary Process LO4
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Service as a Process LO4 People Processing Possession Processing
Chapter 12 Services and Nonprofit Organization Marketing Service as a Process Mental Stimulus Processing People Processing Possession Processing Information Processing LO4
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The Service Offering LO4 Core Service Supplementary Service
Chapter 12 Services and Nonprofit Organization Marketing The Service Offering Core Service Supplementary Service The most basic benefit the consumer is buying. A group of services that support or enhance the core service. LO4
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Exhibit 12.2 Core and Supplementary Services for a Luxury Hotel
Chapter 12 Services and Nonprofit Organization Marketing Exhibit 12.2 Core and Supplementary Services for a Luxury Hotel SOURCE: Lovelock, Christopher H.; Wirtz, Jochen, Services Marketing, 6th, ©2007. Electronically reproduced by permission of Pearson Education, Inc., Upper Saddle River, New Jersey LO4
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Customization/Standardization
Chapter 12 Services and Nonprofit Organization Marketing Customization/Standardization Mass Customization A strategy that uses technology to deliver customized services on a mass basis. LO4
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The Service Mix LO4 Determine what new services to introduce
Chapter 12 Services and Nonprofit Organization Marketing The Service Mix Determine what new services to introduce Determine target market Decide what existing services to maintain and to eliminate LO4
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Place (Distribution) Strategy
LO4 Chapter 12 Services and Nonprofit Organization Marketing Place (Distribution) Strategy Scheduling Location Direct or indirect distribution Number of outlets Convenience
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Promotion Strategy LO4 Stress tangible cues Use personal information
Chapter 12 Services and Nonprofit Organization Marketing Promotion Strategy Stress tangible cues Use personal information sources Create a strong organizational image Engage in postpurchase communication LO4
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Pricing Challenges for Services
Chapter 12 Services and Nonprofit Organization Marketing Price Strategy Pricing Challenges for Services Define the unit of service consumption Determine if multiple elements are “bundled” or priced separately LO4
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Pricing Objectives LO4 Revenue-Oriented Pricing
Chapter 12 Services and Nonprofit Organization Marketing Pricing Objectives Revenue-Oriented Pricing Operations-Oriented Pricing Patronage-Oriented Pricing Maximize the surplus of income over costs Match supply and demand by varying price Maximize the number of customers by varying price LO4
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Relationship Marketing in Services
LO5 Chapter 12 Services and Nonprofit Organization Marketing Relationship Marketing in Services 2 Social Financial 1 3 Structural Pricing incentives Design services to meet customer needs Creating value-added services not available elsewhere
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Nonprofit Organization
Chapter 12 Services and Nonprofit Organization Marketing Nonprofit Organization An organization that exists to achieve some goal other than the usual business goals of profit, market share, or return on investment. Government Museums Theaters Schools Churches LO8
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Nonprofit Organization Marketing
Chapter 12 Services and Nonprofit Organization Marketing Nonprofit Organization Marketing Market intangible products Production requires customer’s presence Services vary greatly Services cannot be stored Shared Characteristics with Service Organizations LO8
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Nonprofit Organization
Chapter 12 Services and Nonprofit Organization Marketing Nonprofit Organization Marketing Activities Identify desired customers Specify objectives Develop, manage, eliminate programs and services Decide on prices Schedule events or programs Communicate their availability LO8
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Unique Aspects of Nonprofit Organization Marketing Strategies
Chapter 12 Services and Nonprofit Organization Marketing Unique Aspects of Nonprofit Organization Marketing Strategies Setting of marketing objectives Selection of target markets Development of marketing mixes LO8
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Provide services that respond to the wants of :
Chapter 12 Services and Nonprofit Organization Marketing Objectives Provide services that respond to the wants of : Users Payers Donors Politicians Appointed officials Media General Public LO8
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Target Markets LO8 Unique Issues of Nonprofit Organizations
Chapter 12 Services and Nonprofit Organization Marketing Target Markets Apathetic or strongly opposed targets Pressure to adopt undifferentiated segmentation Complementary positioning Unique Issues of Nonprofit Organizations LO8
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Distinctions between Business and Nonprofit Organizations
Chapter 12 Services and Nonprofit Organization Marketing Product Decisions Distinctions between Business and Nonprofit Organizations Benefit complexity Weak or indirect benefit strength Low involvement LO8
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Promotion Decisions LO8 Professional volunteers
Chapter 12 Services and Nonprofit Organization Marketing Promotion Decisions Sales promotion activities Public service advertising Professional volunteers LO8
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Pricing Decisions LO8 Pricing objectives Nonfinancial prices
Chapter 12 Services and Nonprofit Organization Marketing Pricing Decisions Below-cost pricing Separation between payers and users Indirect payment Nonfinancial prices Pricing objectives Characteristics Distinguishing Pricing Decisions of Nonprofit Organizations LO8
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Chapter 12 Services and Nonprofit Organization Marketing
Assignment All people know quality when they see it – or do they? Let’s take a look at some goods and services and then think about assessing their quality. Using the abbreviations in parentheses, place each of the following products and services along the continuum below: a new car (C), designer jeans (J), car oil change (O), dress dry cleaning (D), haircut (H), tax preparation software (T), college education (E). 100% Physical Good % Service Once you have placed the items along the continuum, consider how easy it is to assess the quality of each item. Easy to Assess Quality Difficult to Assess Quality What assumptions can you make about the ability to assess the quality of goods compared to services? Is it easier to assess the quality of some goods than others? What about for services?
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