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Services and Non-profit Marketing

Services and Non-profit Marketing. Chapter 11. Services contribute to our economy- GREATLY. Percent of U.S. Labor Force by Industry. 80. 70. 60. 50. Percent of U.S. Labor Force. 40. 30. 20. 10. 0. Services Manufacturing Mining & Agriculture. 1929. 1948. 1969. 1977. 1984.

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Services and Non-profit Marketing

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  1. Services and Non-profit Marketing Chapter 11

  2. Services contribute to our economy- GREATLY

  3. Percent of U.S. Labor Force by Industry 80 70 60 50 Percent of U.S. Labor Force 40 30 20 10 0 • Services • Manufacturing • Mining & Agriculture 1929 1948 1969 1977 1984 1999 Year Source: Survey of Current Business, April 1998, Table B.8, July 1988, Table 6.6B, and July 1992, Table 6.4C; Eli Ginzberg and George J. Vojta, “The Service Sector of the U.S. Economy,” Scientific American, 244,3 (1981): 31-39.

  4. Examples of Service Industries • Health Care • hospital, medical practice, dentistry, eye care • Professional Services • accounting, legal, architectural • Financial Services • banking, investment advising, insurance • Hospitality • restaurant, hotel/motel, bed & breakfast • ski resort, rafting • Travel • airline, travel agency, theme park • Others • hair styling, pest control, plumbing, lawn maintenance, counseling services, health club, interior design

  5. Tangibility Spectrum Salt  Soft Drinks  Detergents  Automobiles  Cosmetics  Fast-food Outlets Intangible Dominant  Tangible Dominant   Fast-food Outlets  Advertising Agencies  Airlines  Investment Management  Consulting Teaching

  6. Characteristics of ServicesCompared to Goods Intangibility Heterogeneity Simultaneous Production and Consumption Perishability

  7. Ability to perform the promised service dependably and accurately. Knowledge and courtesy of employees and their ability to inspire trust and confidence. Physical facilities, equipment, and appearance of personnel. Caring, individualized attention the firm provides its customers. Willingness to help customers and provide prompt service. Service Quality is more difficult to determine than goods quality: we need: Reliability Assurance Tangibles Empathy Responsiveness

  8. Service Failures What are your experiences of horrible customer service?

  9. Service recovery paradox

  10. How to Give Horrible Service(Service Gaps) • Don’t listen to what your customers want (i.e., only listen to your CEO or wallet)- customer gap • Don’t act on customers’ wants • Hire people without skills or a care, and don’t train them • Tell the customer whatever they want to hear (i.e., overpromise and underdeliver) • Don’t meet (or barely meet) customers’ expectations (i.e., ignore people and insult their intelligence)=Customer Gap

  11. Gaps Model of Service Quality Expected Service CUSTOMER Customer Gap Perceived Service External Communications to Customers COMPANY Service Delivery Gap 4 Gap 3 Customer-Driven Service Designs and Standards Gap 1 Gap 2 Company Perceptions of Consumer Expectations

  12. Expanded Mix for Services --The 7 Ps • Product • Price • Place • Promotion • People • All human actors who play a part in service delivery and thus influence the buyer’s perceptions: namely, the firm’s personnel, the customer, and other customers in the service environment. • Physical Evidence • The environment in which the service is delivered and where the firm and customer interact, and any tangible components that facilitate performance or communication of the service. • Process • The actual procedures, mechanisms, and flow of activities by which the service is delivered—the service delivery and operating systems.

  13. ACSI and Annual Percentage Growthin S&P 500 Earnings

  14. Customer Satisfaction and Customer Loyalty Source: James L. Heskett, W. Earl Sasser, Jr., and Leonard A. Schlesinger, The Service Profit Chain, (New York, NY: The Free Press, 1997), p. 83.

  15. How to create relationships (loyalty) in Services Stable pricing Bundling and cross selling Volume and frequency rewards 1. Financial bonds Integrated information systems Continuous relationships Excellent service and value 2. Social bonds 4. Structural bonds Personal relationships Joint investments Shared processes and equipment Social bonds among customers 3. Customization Bonds Anticipation/ innovation Customer intimacy Mass customization

  16. Services and Profit • Not all services are for profit • Non profit services and organizations are a large part of society • What nonprofits can you think of?

  17. Non-Profit Marketing

  18. Non-Profit Marketing • Non-profits are over 20% of U.S. economic activity • Government taxes> housing, healthcare, or food costs • Hard to service someone who doesn’t want it (e.g., AA, gambling help) • Must complement (vs. compete with) for profit businesses

  19. Questions?

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