Transcript Chapter 1
Lamb, Hair, McDaniel 2010-2011 CHAPTER 12 Services and Nonprofit Organization Marketing 1 Learning Outcomes 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 2 Learning Outcomes 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 3 The Importance of Services Discuss the importance of services to the economy LO1 4 The Importance of Services Deed Performance Effort Services Services as a percentage of GDP 10 20 30 40 50 60 70 80 90 100 81% Services as a percentage of employment 10 20 30 40 50 60 70 80 90 100 ~50% LO1 5 How Services Differ from Goods Discuss the differences between services and goods LO2 6 How Services Differ from Goods Intangible Inseparable Heterogeneous Perishable LO2 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. 7 When Services are Assessed • Search Quality—applied to goods more often, assessed before purchase • Experience quality—assessed after purchase • Credence quality—assessed only with appropriate knowledge. http://www.webmd.com LO2 Online 8 Service Quality Describe the components of service quality and the gap model of service quality LO3 9 Components of Service Quality Reliability The ability to perform the service right the first time. Responsiveness The ability to provide prompt service. Assurance The knowledge and courtesy of employees. Empathy Caring, individualized attention to customers. Tangibles The physical evidence of a service. LO3 10 The Gap Model of Service Quality LO3 11 Marketing Mixes for Services Develop marketing mixes for services LO4 12 Product Strategies for Services LO4 Process Core and Supplementary Customization or Standardization Service Mix 13 Service as a Process People Processing Possession Processing Mental Stimulus Processing Information Processing LO4 14 The Service Offering Core Service The most basic benefit the consumer is buying. Supplementary Service A group of services that support or enhance the core service. LO4 15 Core and Supplementary Services for FedEx Problem solving Billing statements Tracing LO4 Advice and information Overnight transportation and delivery of packages Documentation Order taking Supplies Pickup 16 Customization/Standardization Mass Customization A strategy that uses technology to deliver customized services on a mass basis. LO4 17 The Service Mix Determine what new services to introduce Determine target market Decide what existing services to maintain and to eliminate LO4 18 Place (Distribution) Strategy Convenience Number of outlets Direct or indirect distribution Location LO4 Scheduling 19 Promotion Strategy Stress tangible cues Use personal information sources Create a strong organizational image Engage in postpurchase communication LO4 20 Price Strategy Pricing Challenges for Services Define the unit of service consumption Determine if multiple elements are “bundled” or priced separately LO4 21 Pricing Objectives Revenue-Oriented Pricing Maximize the surplus of income over costs Operations-Oriented Pricing Match supply and demand by varying price Patronage-Oriented Pricing Maximize the number of customers by varying price http://www.etrade.com http://www.tdameritrade.com http://www.schwab.com Online LO4 22 LO4 Marketing Mixes for Services PRODUCT = SERVICE PLACE PROMOTION PRICE Process Number of outlets Tangible cues Revenue oriented Core and Supplementary Direct Personal information Operations oriented Mass Customization Indirect Strong image Patronage oriented Standardization Location Post-purchase communication 23 Relationship Marketing in Services Discuss relationship marketing in services LO5 24 Relationship Marketing in Services LO5 3 Structural Social Financial Creating value-added services not available elsewhere 2 Social Financial Design services to meet customer needs 1 Financial Pricing incentives 25 Internal Marketing in Service Firms Explain internal marketing in services LO6 26 Internal Marketing Internal Marketing LO6 Treating employees as customers and developing systems and benefits that satisfy their needs. 27 Internal Marketing in Services LO6 28 Global Issues in Services Marketing Discuss global issues in services marketing LO7 29 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 LO7 30 Nonprofit Organization Marketing Describe nonprofit organization marketing LO8 31 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 32 Nonprofit Organization Marketing Market intangible products Shared Characteristics with Service Organizations Production requires customer’s presence Services vary greatly Services cannot be stored LO8 33 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 34 Unique Aspects of Nonprofit Organization Marketing Strategies • Setting of marketing objectives • Selection of target markets • Development of marketing mixes LO8 35 Objectives Provide services that respond to the wants of : Users LO8 Payers Appointed officials Donors Media Politicians General Public 36 Target Markets Apathetic or strongly opposed targets Pressure to adopt undifferentiated segmentation Unique Issues of Nonprofit Organizations Complementary positioning LO8 37 Product Decisions Distinctions between Business and Nonprofit Organizations Benefit complexity Weak or indirect benefit strength Low involvement LO8 38 Promotion Decisions Professional volunteers Sales promotion activities Public service advertising http://www.adcouncil.com LO8 Online 39 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 PSA • Senior Citizens League PSA • NCAA PSA – What messages are these PSAs sending? Are they effective? LO8 40 Pricing Decisions Pricing objectives Characteristics Distinguishing Pricing Decisions of Nonprofit Organizations LO8 Nonfinancial prices Indirect payment Separation between payers and users Below-cost pricing 41 Nonprofit Organization Marketing Benefit complexity PRODUCT Benefit strength Involvement Professional volunteers PROMOTION Special facilities TARGET • Apathetic or strongly opposed • Undifferentiated segmentation • Complementary positioning Sales Public Service Advertising LO8 PLACE Nonfinancial Indirect payment Separation PRICE Below cost pricing 42