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MKT301_N2_Chapter12_PPTSlides.pdf

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Services and

Nonprofit

Organization

Marketing

s c anned, c opied or duplicated, or pos ted to a publicly ac c es sible

website, in whole or in part.

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Services LO 1

• Involve a deed, a performance, or an effort that cannot be physically possessed

• Service-oriented industries that contribute to U.S. economy • Technology, financial services, health care, and retail

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Characteristics of Services LO 2

• Services cannot be touched, seen, tasted, heard, or felt in the same manner that goods can be sensed

Intangibility

• Production and consumption are simultaneous, meaning the consumer takes part in production

Inseparability

• Because of the variability of the inputs and outputs of services, they tend to be less standardized and uniform than goods

Heterogeneity

• Inability of services to be stored, warehoused, or inventoriedPerishability

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Intangible

• Requires using cues to aid customers

• Atmosphere and imagery are often used to convey value

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Inseparable

• Product and consumption are simultaneous

• Little or no opportunity to test a service before use

• Marketers often try to lower risk by offering guarantees or warranties.

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Heterogeneous Products

Services have many different attributes

Factors that can reduce heterogeneous nature of services

Courtesy Geek Housecalls, Inc.

• Technology

• Training

• Automation

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Perishable

• How are each of these perishable services?

John Foxx/Getty Images Courtesy Geek Housecalls, Inc.

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Components of Service Quality LO 3

• Ability to perform a service dependably, accurately, and consistentlyReliability

• Ability to provide prompt serviceResponsiveness

• Knowledge and courtesy of employees and their ability to convey trustAssurance

• Caring, individualized attention to customersEmpathy

• Physical evidence of a serviceTangibles

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Evaluating the Quality of Services LO 2

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12.1 Gap Model of Service Quality LO 3

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Summary of the 5 Gaps

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Strategies for Service Offerings:

Things to Consider…

LO 4

Decisions on the type of process

involved

Core and supplementary

services

Customization or standardization

Service mix

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• People processing takes place when the service is directed at a customer. Examples are transportation services and health care.

• Possession processing occurs when the service is directed at customers’ physical possessions. Examples include lawn care, dry cleaning, and veterinary services.

1. Categories of Service Processes: What gets processed in service organizations?

people and objects

• Mental stimulus

processing refers to

services directed at

people’s minds. Ex.:

theater performances

and education.

• Information processing

describes services that

use technology or

brainpower directed at a

customer’s assets. Ex.:

insurance and

consulting.

LO 4

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2. Elements in Service Offering LO 4

• Most basic benefit the consumer is buying

Core service

• Group of services that support or enhance the core service

Supplementary service

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3. Customization or Standardization LO 4

• Customized services - More flexible, respond to individual customers’ needs and command a higher price

• Standardized services - More efficient and cost less

• Emerging strategy • Mass customization:

• Strategy that uses technology

to deliver customized services on a mass basis – One Call Now

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4. What services to offer? The Service Mix LO 4

• Each organization’s service mix represents a set of opportunities, risks, and challenges

• Service strategy decisions - Introduction of which new services to which

target market

- Maintenance of which existing services

- Elimination of which services

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The Four P’s of Services Marketing:

Product (Service), Price, Place, Promotion

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Issues with Place (Distribution) Strategy LO 4

Convenience Number of

outlets Direct or indirect

distribution

Location Scheduling

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Promotion Strategies LO 4

Stressing tangible cues

Using personal information sources

Creating a strong organizational image

Engaging in postpurchase communication

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Pricing Challenges for Services LO 4

• Defining the unit of service consumption • Hour?

• Complete tax return?

• Annual Exam?

• Determining if multiple elements are to be bundled or priced separately • Home and Auto insurance?

• Tax prep and financial advising?

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Categories of Pricing Objectives LO 4

• Focuses on maximizing the surplus of income over costs

Revenue-oriented pricing

• Seeks to match supply and demand by varying price – Airlines, concert tickets

Operations- oriented pricing

• Tries to maximize the number of customers by varying price – Internet, cable, phone providers – intro pricing

Patronage- oriented pricing

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Relationship Marketing in Services

LO 5

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Levels in Relationship Marketing LO 5

• Financial - Using pricing incentives • Loyalty pricing for airlines

• Social - Building social bonds • Girl’s Night Spa events

• Customization - Developing one-to-one solutions to fit customers’ needs • Personal training

• Structural - Offering value-added services • Financial advisor who does taxes at no charge

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Internal Marketing LO 6

• Treating employees as customers and developing systems and benefits that satisfy their needs

• Critical in service firms • Employees deliver the brand promise directly to

customers

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Nonprofit Organization Marketing

LO 7

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Unique Aspects of Nonprofit Organization Marketing

Strategies

LO 7

• Nonprofit organizations do not seek to make a profit for redistribution to owners or shareholders

• Objectives • To generate enough funds to cover expenses

• To provide equitable, effective, and efficient services

• Selection of target markets • Apathetic or strongly opposed targets

• Undifferentiated segmentation strategies

• Complementary positioning

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Unique Aspects of Nonprofit Organization

Marketing Strategies (continued 1)

LO 7

• Product decisions • Benefits are complex

• Benefit strength is weak or indirect

• Low or very high involvement (Prevent Forest Fires to Stop Smoking)

• Place decisions • Success is determined by a nonprofit

organization’s ability to distribute its service offerings when and where customers want them

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Unique Aspects of Nonprofit Organization

Marketing Strategies (continued 2)

LO 7

• Promotion decisions • Professional volunteers

• Sales promotion activities

• Public service advertising (PSA)

• Characteristics of pricing decisions • Pricing objective is to defray costs rather than to

achieve a profit

• Consumers must absorb nonmonetary costs such as time, embarrassment, and effort

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Unique Aspects of Nonprofit Organization

Marketing Strategies (continued 3)

LO 7

• Indirect payment through taxes is common to marketers of free services

• Services are used by those who are relatively poor and paid for by those who are better off financially

• Example of below-cost pricing - University tuition

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Global Issues in Services Marketing

LO 8

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Global Issues in Services Marketing LO 8

• Many U.S. service industries have been able to enter the global marketplace because of competitive advantages

• To be successful in the global marketplace, firms must: • Determine the nature of their core product

• Design marketing mix that reflects each country’s cultural, technological, and political environment

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LO 4

Homework: Develop an idea for a new service. Address the following regarding your service:

• Decisions on the type of process involved

• Core and supplementary services

• Customization or standardization

• The 4 P’s

No longer than one page typed