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Chapter 11 Services and Nonprofit Organization Marketing

Chapter 11 Services and Nonprofit Organization Marketing. ‘Product’ Essentials. TOTAL MARKETING EFFORTS. Product (tangible). Product Planning. The Offering. Idea (ambiguous). Service (intangible). The Goods/Services Continuum. Computer diskette. Computer software. Computer.

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Chapter 11 Services and Nonprofit Organization Marketing

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  1. Chapter 11 Services andNonprofit Organization Marketing

  2. ‘Product’ Essentials TOTAL MARKETING EFFORTS Product (tangible) Product Planning The Offering Idea (ambiguous) Service (intangible)

  3. The Goods/Services Continuum Computer diskette Computer software Computer Computer program Systems design Exercise equipment In-home rental of equipment Use of equipment in hotel Health and fitness clubs Personal trainer Off-the- rack furniture Custom- made furniture Reuphol- stering furniture Cleaning furniture Interior decorator Self-service gasoline Full-service gasoline Trans- mission overhaul Driver ed. (firm’s car) Driver ed. (consumer’s car) Pure goods Pure services Please note: The above continuum should be viewed left to right. Within each row, a consistent pattern moves from pure good to pure service. When comparing different rows, less consistency exists due to the diversity of examples shown.

  4. Performances Objects Intangible Tangible Use Ownership & Use Memory of Transaction Accumulation Storage Reuse Reminder of Transaction Character of Services Services Products

  5. Character of Services Services Products Invisible Visible Costs not Seen Costs Seen

  6. Purchase Behavior for Services Services Products Experience Attributes Search Attributes (restaurant) (color) Credence Attributes (healthcare) Difficult to Judge Quality Easier to Judge Quality Price More as a Surrogate of Quality Price Less as a Surrogate of Quality

  7. Intangibility Services that cannot be touched, seen, tasted, heard, or felt in the same manner as goods. Inseparability A characteristic of services that allows them to be produced and consumed simultaneously. Heterogeneity A characteristic of services that makes them less standardized and uniform than goods. Perishability A characteristics of services that prevents them from being stored, warehoused, or inventoried. Characteristics of Services

  8. 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. Components of Service Quality

  9. Which Components are Most Important to Customers? 1. Reliability - 32% 2. Responsiveness - 22% 3. Assurance - 19% 4. Empathy - 16% 5. Tangibles - 11%

  10. Importance of Service Quality Businesses with high Service Quality have 1. 10% higher prices 2. Grow 6% faster 3. 12% high return on sales

  11. Hard Customer-Defined Service Standards • Federal Express # missed pickups • Dun & Bradstreet 36 hour turnaround • U.S. Healthcare 20-second call answering • Lenscrafters glasses in an hour

  12. Soft Customer-Defined Service Standards • Land’s End personal attention • General Electric summarize actions • Nationwide Insurance responsiveness • American Express open and honest

  13. Bottom Line for Service Quality 1. Clear and reasonable promises 2. Build staff skills 3. Emphasize ‘Do-It-Right-First’ performance 4. Be great at problem resolution 5. Make it easy for customers to complain

  14. 79% of workers are in service sector Services account for 76% of U.S. GDP Service occupations will be responsible for all job growth through 2005 1 The Importance of Services

  15. Gap Model of Service Quality Expected Service Gap 5 Perceived Service Consumer Provider Service delivery Communication with Customers Gap 1 Gap 4 Gap 3 Service Quality Specifications Gap Legend • Knowledge gap • Standards gap • Delivery gap • Communications gap • Service gap Gap 2 Mgt. Perceptions of Con. Expectations

  16. Core and Supplementary Services Advice and information Problem solving Order taking Overnight transportation and delivery of packages Billing statements Supplies Tracing Pickup Documentation

  17. Stress tangible cues Service Promotion Strategies Use personal information sources Create a strongorganizational image Engage in postpurchase communication Promotion Strategy Issues

  18. Price Strategy Define unit of service consumption Pricing Challenges Determine if multiple elements are “bundled” Trends have made pricing an active component

  19. Competing for Talent Offeringa Vision TrainingEmployees StressingTeamwork Empowerment KnowingEmployees’ Needs RewardingPerformance InternalMarketingActivities Internal Marketing Activities

  20. Financial Construction Engineering Insurance U.S. is world’s largest exporter of services Restaurant Chains Global Issues in Services Marketing

  21. Differences Between Nonprofit andProfit-Oriented Marketing Differences • Scope • Forms of exchange • Complexity of objectives • Distribution of benefits • Market segments served • Constituencies Nonprofit Marketing Profit-oriented Marketing

  22. Illustrations of Nonprofit Marketing Examples of Social Marketing: • Choose to Save - Am Savings Ed Campaign (see http://www.choosetosave.org Also see www.financenter.com) • Road Rage • Take folic acid • Designated driver • International Women’s Rights • 164 Fº beef

  23. For-Profit Support of Nonprofits • Social Marketing • Strategic Philanthropy • Charity • AMEX’s ‘Charge Against Hunger’ • Walker’s ‘Corporate Citizenship’ TOP: Nonprofits, Computer & Food BOTTOM: Government, Insurance, Chemicals & Tobacco

  24. Importance of Social Marketing http://www.social-marketing.org/

  25. Nonprofit Organizations Government Private Museums Theaters Schools Churches Other Non-government Nonprofit Organizations

  26. Market intangible products Shared Characteristics with Service Organizations Production requires customer’s presence Services vary greatly Services can not be stored Nonprofit Organization Marketing

  27. Identify Desired Customers Specify Objectives Develop, manage, eliminate programs/services Set prices Schedule events Communicate through advertising/PR Nonprofit Organization Marketing Activities

  28. Users Payers Donors Politicians Appointed officials Media General Public Market Objectives Provide Services to:

  29. Apathetic or strongly opposed targets Pressure to adopt undifferentiated segmentation Complementary positioning Target Markets Unique Issues of Nonprofit Organizations

  30. Benefit Complexity Weak Benefit Strength Low Involvement Product Decisions Distinctions betweenBusiness and NonprofitOrganizations

  31. ProfessionalVolunteers Sales PromotionActivities Public ServiceAdvertising Licensing Promotion Decisions Nonprofit Organization Promotion Decisions

  32. Pricing Objectives Nonfinancial Prices Characteristics Distinguishing Pricing Decisionsof Nonprofit Organizations Indirect Payment Separation BetweenPayers and Users Below-Cost Pricing Pricing Decisions

  33. Boyne USA • How do the characteristics of services apply to Boyne’s offerings? • Explain the core and supplementary services for Boyne. • What about distribution? • How does Boyne match supply and demand for their services? http://www.boyne.com/

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