1 Lamb, Hair, McDaniel CHAPTER 12 Services and Nonprofit Organization Marketing 2010-2011.

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Presentation on theme: "1 Lamb, Hair, McDaniel CHAPTER 12 Services and Nonprofit Organization Marketing 2010-2011."— Presentation transcript:

1 1 Lamb, Hair, McDaniel CHAPTER 12 Services and Nonprofit Organization Marketing 2010-2011

2 2 LO 1 Discuss the importance of services to the economy LO 2 Discuss the differences between services and goods LO 3 Describe the components of service quality and the gap model of service quality Learning Outcomes

3 3 LO 4 Develop marketing mixes for services LO 5 Discuss relationship marketing in services LO 6 Explain internal marketing in services LO 7 Discuss global issues in services marketing LO 8 Describe nonprofit organization marketing Learning Outcomes

4 4 Discuss the importance of services to the economy The Importance of Services LO 1

5 5 The Importance of Services 10 20 30 40 50 60 70 80 90 100 81% Services as a percentage of GDP Services as a percentage of employment Services Deed Performance Effort Deed Performance Effort ~50% 10 20 30 40 50 60 70 80 90 100 LO 1

6 6 Discuss the differences between services and goods How Services Differ from Goods LO 2

7 7 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. LO 2

8 8 When Services are Assessed Online http://www.webmd.com Search Quality—applied to goods more often, assessed before purchase Experience quality—assessed after purchase Credence quality—assessed only with appropriate knowledge. LO 2

9 9 Describe the components of service quality and the gap model of service quality Service Quality LO 3

10 10 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. LO 3

11 11 The Gap Model of Service Quality LO 3

12 12 Develop marketing mixes for services Marketing Mixes for Services LO 4

13 13 Product Strategies for Services Service Mix Customization or Standardization Core and Supplementary Process LO 4

14 14 Service as a Process Mental Stimulus Processing People Processing People Processing Possession Processing Information Processing LO 4

15 15 The Service Offering 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. LO 4

16 16 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 LO 4

17 17 Customization/Standardization A strategy that uses technology to deliver customized services on a mass basis. Mass Customization LO 4

18 18 The Service Mix  Determine what new services to introduce  Determine target market  Decide what existing services to maintain and to eliminate LO 4

19 19 Place (Distribution) Strategy Scheduling Location Direct or indirect distribution Direct or indirect distribution Number of outlets Convenience LO 4

20 20 Promotion Strategy Stress tangible cues Use personal information sources Create a strong organizational image Engage in postpurchase communication LO 4

21 21 Price Strategy Pricing Challenges for Services  Define the unit of service consumption  Determine if multiple elements are “bundled” or priced separately LO 4

22 22 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 http://www.etrade.com http://www.tdameritrade.com http://www.schwab.com Online LO 4

23 23 PLACE PRODUCT = SERVICE Core and Supplementary Direct Personal information Operations oriented Operations oriented Revenue oriented Process Number of outlets Tangible cues Mass Customization Standardization PROMOTION PRICE Indirect Location Strong image Post-purchase communication Patronage oriented Marketing Mixes for Services LO 4

24 24 Discuss relationship marketing in services Relationship Marketing in Services LO 5

25 25 2 Social Financial 1 Financial 3 Structural Social Financial Pricing incentives Design services to meet customer needs Creating value-added services not available elsewhere Relationship Marketing in Services LO 5

26 26 Explain internal marketing in services Internal Marketing in Service Firms LO 6

27 27 Internal Marketing Treating employees as customers and developing systems and benefits that satisfy their needs. LO 6

28 28 Internal Marketing in Services LO 6

29 29 Discuss global issues in services marketing Global Issues in Services Marketing LO 7

30 30 Global Issues in Services Marketing The U.S. is the world’s largest exporter of services The marketing mix must reflect each country’s cultural, technological, and political environment LO 7

31 31 Describe nonprofit organization marketing Nonprofit Organization Marketing LO 8

32 32 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 LO 8

33 33 Nonprofit Organization Marketing Market intangible products Production requires customer’s presence Production requires customer’s presence Services vary greatly Services cannot be stored Shared Characteristics with Service Organizations Shared Characteristics with Service Organizations LO 8

34 34 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 LO 8

35 35 Unique Aspects of Nonprofit Organization Marketing Strategies Setting of marketing objectives Selection of target markets Development of marketing mixes LO 8

36 36 Objectives Provide services that respond to the wants of :  Users  Payers  Donors  Politicians  Appointed officials  Media  General Public LO 8

37 37 Target Markets Apathetic or strongly opposed targets Apathetic or strongly opposed targets Pressure to adopt undifferentiated segmentation Complementary positioning Unique Issues of Nonprofit Organizations LO 8

38 38 Product Decisions Distinctions between Business and Nonprofit Organizations  Benefit complexity  Weak or indirect benefit strength  Low involvement LO 8

39 39 Promotion Decisions Sales promotion activities Public service advertising Professional volunteers Online http://www.adcouncil.com LO 8

40 40 Public Service Announcements PSAs take many forms, but many organizations are using television and the internet to spread awareness. iava.org (Irag and Afghanistan Veterans of America) asks visitors to “become a fan” on Facebook to see their latest PSAiava.org Senior Citizens League PSA NCAA PSA –What messages are these PSAs sending? Are they effective? LO 8

41 41 Pricing Decisions Below-cost pricing Separation between payers and users Indirect payment Nonfinancial prices Pricing objectives Characteristics Distinguishing Pricing Decisions of Nonprofit Organizations Characteristics Distinguishing Pricing Decisions of Nonprofit Organizations LO 8

42 42 TARGET PRODUCT PROMOTION PLACE PRICE Professional volunteers Sales Public Service Advertising Involvement Benefit strength Benefit complexity Special facilities Nonfinancial Indirect payment Separation Below cost pricing Complementary positioning Apathetic or strongly opposed Undifferentiated segmentation Nonprofit Organization Marketing LO 8


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