Lamb, Hair, McDaniel
Chapter 12
Service and Nonprofit
Organization Marketing
2013-2014
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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 Develop marketing mixes for services
1
4
2
3
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Discuss relationship marketing in services Explain internal marketing in services Discuss global issues in services marketing Describe nonprofit organization marketing
1
4
2
3
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Discuss the importance of services to the
economy
The Importance of Services
1
The Importance of Services
During recession, ten of eleven service sectors had increased
revenues.
Services involve:
• Deed
• Performance
• Effort
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1
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Discuss the differences between services and
goods
How Services Differ from Goods
2
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How Services Differ from Goods
Intangible
Inseparable
Heterogeneous
Perishable
No physical object makes it hard to
communicate benefits.
Production and consumption are
simultaneous, meaning the
consumer takes part in production.
Services depend on their
employees for quality, which makes
consistency difficult to achieve.
Services cannot be saved, and it is
challenging to synchronize supply
and demand.
2
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When Services are Assessed
• Search Quality—more often applied to goods, assessed before purchase
• Experience quality—assessed after purchase
• Credence quality—assessed only with appropriate knowledge.
2
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Describe the components
of service quality and the gap model of service quality
Service Quality
3
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Components of Service Quality
Tangibles The physical evidence
of the service.
Empathy Caring, individualized attention to customers.
Assurance The knowledge and courtesy
of employees.
Responsiveness The ability to provide
prompt service.
Reliability The ability to perform the service right the first time.
3
11
Exhibit 12.1 Gap Model of Service Quality
3
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Develop marketing mixes for services
Marketing Mixes for Services
4
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Product Strategies for Services
Service
Mix
Customization
or
Standardization
Core and
Supplementary Process
4
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Service as a Process
Mental Stimulus Processing
People Processing
Possession Processing
Information Processing
4
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The Service Offering
Core Service
Supplementary Service
The most basic benefit the consumer is buying.
A group of services that support or enhance the
core service.
4
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Customization/Standardization
A strategy that uses
technology to deliver
customized services
on a mass basis.
Mass
Customization
4
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The Service Mix
Determine what new services to introduce
Determine target market
Decide what existing services to maintain and to eliminate
4
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Place (Distribution) Strategy
Scheduling
Location
Direct or indirect distribution
Number of outlets
Convenience
4
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Promotion Strategy
Stress tangible cues
Use personal information sources
Create a strong organizational image
Engage in postpurchase communication
4
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Price Strategy
Define the unit of service consumption
Determine if multiple elements are “bundled” or priced separately
Pricing Challenges for Services
4
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Pricing Objectives
Revenue-Oriented Pricing
Operations-Oriented Pricing
Patronage-Oriented Pricing
Maximize the surplus of income over costs
Match supply and demand by varying price
Maximize the number of customers by varying price
4
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Discuss relationship marketing in services
Relationship Marketing in Services
5
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Relationship Marketing in Services
2 Social
Financial
1 Financial
3 Structural
Social Financial
Pricing
incentives
Design services
to meet
customer needs
Creating value-
added services
not available
elsewhere
5
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Explain internal marketing in services
Internal Marketing in Service Firms
6
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Internal Marketing
Treating employees as
customers and
developing systems and
benefits that satisfy their
needs.
6
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Discuss global issues in services marketing
Global Issues in Services Marketing
7
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Global Issues in Services Marketing
• The U.S. is the world’s largest
exporter of services
• The marketing mix must
reflect each country’s cultural,
technological, and political
environment
7
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Describe nonprofit organization marketing
Nonprofit Organization Marketing
8
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Nonprofit Organization
An organization that exists to achieve
some goal other than the usual business
goals of profit, market share, or return on
investment.
• Government
• Museums
• Theaters
• Schools
• Churches
8
Nonprofit Organization Marketing
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Market intangible products
Production requires customer’s presence
Services vary greatly
Services cannot be stored
Shared Characteristics
with Service
Organizations
8
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Nonprofit Organization
Marketing Activities
Identify desired customers
Specify objectives
Develop, manage, eliminate programs
and services
Decide on prices
Schedule events or programs
Communicate their availability
8
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• Setting of marketing objectives
• Selection of target markets
• Development of marketing mixes
Unique Aspects of Nonprofit Organization Marketing Strategies
8
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Objectives
Provide services that respond to the wants of :
Users
Payers
Donors
Politicians
Appointed
officials
Media
General Public
8
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Target Markets
Apathetic or strongly opposed
targets
Pressure to adopt undifferentiated segmentation
Complementary positioning
Unique Issues of Nonprofit
Organizations
8
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Benefit complexity
Weak or indirect benefit strength
Low involvement
Product Decisions
Distinctions between Business and Nonprofit Organizations
8
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Promotion Decisions
Sales promotion activities
Public service advertising
Professional volunteers
8
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Pricing Decisions
Below-cost pricing
Separation between payers and users
Indirect payment
Nonfinancial prices
Pricing objectives
Characteristics Distinguishing
Pricing Decisions of Nonprofit
Organizations
8
© Cengage Learning Inc. 2013. All Rights Reserved. 38
Chapter 12 Video Pepe’s Pizzeria
Pepe’s is a family owned and operated pizzeria in
Connecticut. The original Pepe earned the
nickname “Old Reliable” for his customer service,
and his grandchildren carry out that value today.
This video discusses the various ways that Pepe’s
Pizzeria works to provide great, consistent service
and why it is important.
CLICK TO PLAY VIDEO
© Cengage Learning Inc. 2013. All Rights Reserved. 39
Part 3 Video Scripps Networks Interactive
Product Decisions
Scripps Networks Interactive is a media
company that operates popular channels such
as Food Network, DIY, and other lifestyle
channels. In this video, employees discuss
how Scripps manages and develop their new
cross-platform products, such as social media
and apps for mobile devices.
CLICK TO PLAY VIDEO
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