12Services and Nonprofit Organization Marketing

Dr. Close

Services are HUGE!

• Service is a deed, a performance, or effort that can’t be physically possessed

• You will likely work in services

• I work in services (education and research)

• The most job growth is in services (here, education, healthcare, casinos, finance)

• Vegas thrives on services

Services are…

• Intangible

• Inseparable

• Heterogeneous

• Perishable

• Harder to search for (experience or credence goods)

Importance of Services

• Tradeoffs:– Desire: high service and low price (difficult for

companies to do)– Choosing a service level:

– Too low: consumers go elsewhere (FedEx/Kinkos: constantly searching for ways to improve service)

– Too high: customers will not pay

– What services do you just refuse to pay for?What services do you just refuse to pay for?

Service Quality (SERVQUAL)

To be a good provider, I better be…• Reliable• Responsive• Trustworthy• Knowledgeable• Empathetic• Incorporating Tangibles

(just being a few of these things won’t cut it…)

Service Quality Experiences

What are your experiences of What are your experiences of horrible customer service?horrible customer service?

How to Give Horrible Service(Service Gaps)

1. Don’t listen to what your customers want (i.e., only listen to your CEO or wallet)

2. Don’t act on customers’ wants3. Hire people without skills or a care, and

don’t train them4. Tell the customer whatever they want to

hear (i.e., overpromise and underdeliver)5. Don’t meet (or barely meet) customers’

expectations (i.e., ignore people and insult their intelligence)

Relationships in Service

• Attract, develop and retain clients

• Satisfaction is not enough; instill more loyalty (attitudinal and behavioral)

• Going to the competition = cheating on you

How to Instill Relationships in Service Industries

1. Pricing incentives for loyal customers

2. Nonpricing incentives for loyal customers (e.g., airline points)

3. Build social or emotional bonds (e.g., sponsor a UNLV game)

4. Build structural bonds (e.g., Amex or BMW concierege services)

Service Strategy

• Service as process (people, possession, mental stimulus, or information processing)

• Core versus supplementary services

• Customization versus standardization

The Service Mix

• Distribution (i.e., place)

• Price: by consumption unit (e.g., 1 haircut) or by time (e.g., long hair versus short hair)

• Promotion: stress tangible cues and create image (e.g., T-Mobil service with Catherine Zeta-Jones’ image)

Promotion for Services

Promotion for Services(attempt 2)

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?What nonprofits can you think of?

Non-Profit Marketing

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

Summary

• Importance of services• Services vs. other goods• Service quality traits• Service gaps• Service marketing mix• Relationships in service• Non-profit services• Any questions??