Services and Nonprofit Organization Marketing

1. Services andNonprofit Organization Marketing Chapter 11 Prepared by Deborah Baker Texas Christian University

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

3. Learning Objectives (continued) 4. Develop marketing mixes for services. 5. Discuss relationship marketing in services. 6. Explain internal marketing in services.

4. Learning Objectives (continued) 7. Discuss global issues in services marketing. 8. Describe nonprofit organization marketing.

5. Learning Objective 1 On Line http://www.yellowfreight.com Discuss the importance of services to the economy.

6. Service 1 The result of applying human or mechanical efforts to people or objects.

7. 79% of workers are in service sector Services account for 76% of U.S. GDP Service occupations will be responsible for all net job growth through 2005 The Importance of Services 1

8. Service-Producing Industriesand Job Growth 1

9. Learning Objective 2 On Line http://www.sheraton.com Discuss the differences between services and goods.

10. Services Are Intangible Performances Services Are Produced and Consumed Simultaneously Services Have Greater Variability Services Are Perishable How Services Differ from Goods 2 On Line http://www.nationalamusements.com http://www.amctheatres.com http://www.movietickets.com

11. Learning Objective 3 Describe the components of service quality and the gap model of service quality.

12. 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 3

13. The Gap Model of Service Quality 3

14. Learning Objective 4 Develop marketing mixes for services.

15. People Processing Product (Service) Strategy PossessionProcessing Mental StimulusProcessing InformationProcessing Marketing Mixes for Services 4

16. CoreService The most basic benefit the consumer is buying. Supplementary Service A group of services that support or enhance the core service. Core and Supplementary Services 4

17. Problem solving Advice and information Order taking Overnight transportation and delivery of packages Billing statements Supplies Tracing Pickup Documentation Core and Supplementary Servicesfor FedEx 4

18. Mass Customization 4 A strategy that uses technology to deliver customized services on a mass basis.

19. MassCustomization CustomizedFocus Mass Customization 4 Technology is the Key High Customization StandardizedFocus Low High Low Cost

20. Service Mix Strategy 4 • Determine what new services to introduce • Determine target market • Decide what existing services to maintain and/or eliminate

21. Convenience Number of Outlets Focus forDistribution Strategies Direct vs. Indirect Distribution Location Scheduling Distribution Strategy Issues 4

22. Stress tangible cues Service Promotion Strategies Use personal information sources Create a strongorganizational image Engage in postpurchase communication Promotion Strategy Issues 4

23. Define unit of service consumption Pricing Challenges Determine if multiple elements are “bundled” Trends have made pricing an active component Price Strategy 4

24. Revenue-OrientedPricing Categories ofPricingObjectives Operations-OrientedPricing Patronage-OrientedPricing Pricing Objectives 4 On Line http://www.etrade.com http://www.ameritrade.com http://www.schwab.com

25. Learning Objective 5 Discuss relationship marketing in services.

26. Level 3 Financial, Social, Structural Level 2 Financial, Social Level 1 Financial Relationship Marketing in Services 5 Three Levelsof Relationship Marketing

27. Learning Objective 6 Explain internal marketing in services.

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

29. Competing for Talent Offeringa Vision TrainingEmployees StressingTeamwork Empowerment KnowingEmployees’ Needs RewardingPerformance InternalMarketingActivities Internal Marketing Activities 6

30. Learning Objective 7 Discuss global issues in services marketing.

31. Financial Construction Engineering Insurance U.S. is world’s largest exporter of services Hotel Chains Global Issues in Services Marketing 7

32. Learning Objective 8 Describe nonprofit organization marketing.

33. Nonprofit Organization Marketing 8 An organization that exists to achieve some goal other than the usual business goals of profit, market share, or return on investment.

34. Nonprofit Organizations Government Private Museums Theaters Schools Churches Other Non-Government Nonprofit Organizations 8

35. Market intangible products Shared Characteristics with Service Organizations Production requires customer’s presence Services vary greatly Services can not be stored Nonprofit Organization Marketing 8

36. Identify Desired Customers Specify Objectives Develop, manage, eliminate programs/services Set prices Schedule events Communicate through advertising/PR Nonprofit Organization Marketing Activities 8

37. Setting of Marketing Objectives Selection of Target Markets Development of Marketing Mixes Unique Aspects of Nonprofit Organization Marketing Strategies 8 On Line http://www.peta.com

38. Users Payers Donors Politicians Appointed officials Media General Public Market Objectives 8 Provide Services to:

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

40. Benefit Complexity Weak Benefit Strength Low Involvement Product Decisions 8 Distinctions betweenBusiness and NonprofitOrganizations

41. ProfessionalVolunteers Sales PromotionActivities Public ServiceAdvertising Promotion Decisions 8 On Line http://www.adcouncil.org

42. Pricing Objectives Nonfinancial Prices Characteristics Distinguishing Pricing Decisionsof Nonprofit Organizations Indirect Payment Separation BetweenPayers and Users Below-Cost Pricing Pricing Decisions 8