Transcript Chapter 12 Managing the Organization`s Offerings

Chapter 12
Managing the Organization’s Offerings
Chapter 12 – Part II
By Justin Vollmer
Services Marketing
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A large amount of nonprofit organizations are
in the business of providing services. (p.317)
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Service defined – “A service is any activity or
benefit that one party can offer to another that is
essentially intangible and does not result in the
ownership of anything. Its production may or may
not be tied to a physical product” (p.317)
Services Marketing (Cont.)
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Services tend to have five important characteristics.
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Intangible
Inseparable from its producer
Variable in its characteristics
Perishable
Dependent on the involvement of the customer and its
production.
(p.317)
Intangible Services
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Services that cannot be seen, tasted, felt,
heard or smelled prior to being rendered or
purchased.
A consumer must make the purchase of the
service based on secondary cues and his/her
confidence in the service provider.
(p.317)
Inseparable Services
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“A service is inseparable from the source that
provides it.”
This means that the production and the
consumption of the service will usually
happen simultaneously.
(p.317)
Variable Services
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Services vary by the source and time it is
being offered.
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Consumers of these services must be aware of
this fact and engage in “risk reducing behavior,”
by doing research to learn the best provider.
(p.318)
Perishable Service and Customer
Involvement
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Services can’t be stored and revenue is lost
when there is no demand for services.
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When demand is up, “…the perishability of
services is not a problem.” (p.319)
Customer Involvement
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Customers can be partial to producers and
consumers. (p. 319)
The quality of a service is relative to the
experience of the consumer.
Five Major Challenges in the Design of
Service Offerings.
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Making the Intangible Tangible
Making a Virtue of Inseparability
Managing Variability
Managing Perishability
Helping Consumers Consume
(p. 319-323)
Making the Intangible Tangible
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Since services are difficult to evaluate
because of a lacking tangible product,
consumers must look for signs of quality.
(p.319)
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Andreasen and Kotler give examples of this on
page 319.
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Diplomas can indicate quality of an instuctor
Plaques and awards
Recognizable Brand Names (Red Cross, Salvation
Army)
Making the Intangible Tangible (cont.)
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Because evaluating services is more difficult,
service providers must concentrate on and
be aware of their appearance. (p. 319)
Service marketers may make parts of their
service tangible. (p. 319)
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T-shirts given out for a charity race
Customer service survey
Making a Virtue of Inseparability
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Since services are typically produced by people, it is important
for service marketers to properly train its personnel with
customer service. (p. 320)
Internal Marketing – an organization must realize that every
encounter with a customer is “the moment of truth” (p. 320).
User Friendliness – become increasingly important to customer
satisfaction. (p.320)
The bottom line here is how important customer service and
ultimately customer satisfaction is to an organization. Since
people generally provide services, these people should be
properly trained deal with customers.
Managing Variability
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An organization must understand how a bad
experience for a consumer can damage a
service provider’s position. (p. 322)
Controlling variability (p. 322)
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Hire and train good personnel
Routinize or automate parts of a service
Develop good customer satisfaction monitoring
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Surveys, comparison shopping etc.
Managing Perishability
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Important for service managers to bring
supply and demand into a balance. (p. 322)
Sasser has provided several ways for
managing supply and demand (p. 322)
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Demand
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Differential pricing- changing prices based on the need
for a service
Nonpeak demand- can change through marketing
campaigns by an organization
Managing Perishability (cont.)
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Demand (cont.)
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Complimentary Services – provides diversions and alternative to
waiting customers
Reservations- preselling services, prevents customer from waiting by
understanding how much service is needed ahead of time.
Supply
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Part-time employees – help with peak demand
Peak-time efficiency routines- strategies used by an organization to
deal with peak times
Customer Participation – can cut down time and resources by having
customers be responsible for some aspect.
Shared Services – create a deal with other organizations to help each
other deal with peak time.
Expandable facilities- planned strategies to expand infrastructure
during peak times
Helping Consumers Consume
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Must either change marketers or change consumers.
Service Marketing may have to, “adapt his or her
own service as much as possible to the individual
customer’s ability to consume and appreciate it.” (p.
323)
This can be done by studying the needs and wants
of the consumer or teaching the consumer to be
appreciate of a service- i.e. art appreciation classes.
(p. 323-324)