SUPPLEMENTAL “SERVICES” PRODUCT ELEMENT FRAMEWORKS FOR MKTG 490

1. SUPPLEMENTAL “SERVICES”PRODUCT ELEMENT FRAMEWORKSFORMKTG 490

2. MKTG Lamb, Hair, McDaniel 2007-2008 11 Services and Nonprofit Organization Marketing CHAPTER Designed by Amy McGuire, B-books, Ltd. Prepared by Deborah Baker, Texas Christian University

3. Learning Outcomes Discuss the importance of services to the economy Discuss the differences between services and goods Describe the components of service quality and the gap model of service quality LO1 LO2 LO3

4. Learning Outcomes Develop marketing mixes for services Discuss relationship marketing in services Explain internal marketing in services Discuss global issues in services marketing Describe nonprofit organization marketing LO4 LO5 LO6 LO7 LO8

5. The Importance of Services LO1 Discuss the importance of services to the economy

6. The result of applying human or mechanical efforts to people or objects. Service Service LO1

7. 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% 81% REVIEW LEARNING OUTCOME LO1 The Importance of Services

8. How Services Differ from Goods LO2 Discuss the differences between services and goods

9. Intangible Inseparable Heterogeneous Perishable How Services Differ from Goods LO2

10. http://www.webmd.com Online How Services Differ from Goods Intangibility • Search Qualities • Experience Qualities • Credence Qualities LO2

11. Service Quality LO3 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. LO3 Components of Service Quality

13. LO3 The Gap Model of Service Quality

14. Biz Flix Intolerable Cruelty LO3

15. REVIEW LEARNING OUTCOME LO3 Service Quality

16. Marketing Mixes for Services LO4 Develop marketing mixes for services

17. Process Core andSupplementary StandardizationorCustomization Service Mix Product Strategies for Services LO4

18. People Processing PossessionProcessing Mental StimulusProcessing InformationProcessing Service as a Process LO4

19. The Service Factory Possession processing Mental-stimulus processing LO4

20. CoreService The most basic benefit the consumer is buying. Supplementary Service A group of services that support or enhance the core service. The Service Offering LO4

21. Problem solving Advice and information Order taking Overnight transportation and delivery of packages Billing statements Supplies Tracing Pickup Documentation Core and Supplementary Services for FedEx LO4

22. A strategy that uses technology to deliver customized services on a mass basis. Customization/Standardization MassCustomization LO4

23. The Service Mix • Determine what new services to introduce • Determine target market • Decide what existing services to maintain and to eliminate LO4

24. Convenience Number of outlets Direct or indirect distribution Location Scheduling Place (Distribution) Strategy LO4

25. Stress tangible cues Use personal information sources Create a strong organizational image Engage in postpurchase communication Promotion Strategy LO4

26. Price Strategy • Define the unit of service consumption • Determine if multiple elements are “bundled” or priced separately Pricing Challenges for Services LO4

27. Revenue-OrientedPricing Maximize the surplus of income over costs Operations-OrientedPricing Match supply and demand by varying price Patronage-OrientedPricing Maximize the number of customers by varying price http://www.etrade.com http://www.tdameritrade.com http://www.schwab.com Online Pricing Objectives LO4

28. PRODUCT = SERVICE PLACE PROMOTION PRICE Process Number ofoutlets Tangiblecues Revenueoriented Core and Supplementary Direct Personalinformation Operations oriented Mass Customization Indirect Strong image Patronageoriented Standardization Location Post-purchasecommunication REVIEW LEARNING OUTCOME LO4 Marketing Mixes for Services

29. Relationship Marketing LO5 Discuss relationship marketing in services

30. Creating value-added services not available elsewhere 3 Structural Social Financial 2 Social Financial Design services to meet customer needs 1 Financial Pricing incentives REVIEW LEARNING OUTCOME LO5 Relationship Marketing in Services

31. Internal Marketing in Service Firms LO6 Explain internal marketing in services

32. Internal Marketing Treating employees as customers and developing systems and benefits that satisfy their needs. LO6 Internal Marketing

33. REVIEW LEARNING OUTCOME LO6 Internal Marketing in Services

34. Global Issues in Services Marketing LO7 Discuss global issues in services marketing

35. U.S.A. United States is world’s largest exporter of services. REVIEW LEARNING OUTCOME LO7 Global Issues in Services Marketing

36. Nonprofit Organization Marketing LO8 Describe nonprofit organization marketing

37. NonprofitOrganization Marketing An organization that exists to achieve some goal other than the usual business goals of profit, market share, or return on investment. Nonprofit Organization Marketing LO8

38. Nonprofit Organization Marketing • Government • Museums • Theaters • Schools • Churches LO8

39. Market intangible products Shared Characteristics with Service Organizations Production requires customer’s presence Services vary greatly Services cannot be stored Nonprofit Organization Marketing LO8

40. Identify desired customers Specify objectives Develop, manage, eliminate programs and services Decide on prices Schedule events or programs Communicate their availability Nonprofit Organization Marketing LO8

41. Unique Aspects of Nonprofit Organization Marketing Strategies • Setting of marketing objectives • Selection of target markets • Development of marketing mixes LO8

42. Provide services that respond to the wants of : • Users • Payers • Donors • Politicians • Appointed officials • Media • General Public Objectives LO8

43. Apathetic or strongly opposed targets Pressure to adopt undifferentiated segmentation Complementary positioning Target Markets Unique Issues of Nonprofit Organizations LO8

44. Product Decisions • Benefit complexity • Weak or indirect benefit strength • Low involvement Distinctions between Business and Nonprofit Organizations LO8

45. Professional volunteers Sales promotion activities Public service advertising http://www.adcouncil.com Online Promotion Decisions LO8

46. Pricing objectives Nonfinancial prices Characteristics Distinguishing Pricing Decisionsof Nonprofit Organizations Indirect payment Separation betweenpayers and users Below-cost pricing Pricing Decisions LO8

47. Benefitcomplexity PRODUCT PLACE Special facilities Benefitstrength • TARGET • Apathetic or strongly opposed • Undifferentiated segmentation • Complementary positioning Involvement Nonfinancial Professional volunteers Indirect payment Sales Separation PROMOTION PRICE Below costpricing Public Service Advertising REVIEW LEARNING OUTCOME LO8 Nonprofit Organization Marketing